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Critical infrastructure in Latin America and the Caribbean: technologies changing the game

October 16, 2024 por José Irigoyen - Nayeli Mayorga - Maria Pfeifer Leave a Comment


Critical infrastructure plays a fundamental role in the economic and social development of Latin America and the Caribbean. For this reason, its modernization is essential to guarantee efficiency and security, as well as to boost the region’s competitiveness and resilience.

The energy and transport sectors face the challenge of adopting cutting-edge technologies and advancing digitalization. This process is essential to achieve the integration of renewable energy sources, provide high-quality and full-scope services to the population, reduce greenhouse gas emissions, ensure the resilience of infrastructure in the face of climate change and encourage the participation of the citizens.

What technologies have the greatest penetration in the energy and transportation sectors?

The most relevant and applicable technologies are related to the collection, processing and storage of data. According to interviews carried out in 2022 and 2023 with more than 275 representatives of the energy and transport sectors from both public and private spheres, cloud computing stands out as the most widely adopted technology, with approximately 71% of entities in the energy sector using it. Additionally, in both sectors, a little over half of organizations use data analysis tools and Big Data solutions to enhance their operations and decisions. In the medium term a substantial proportion of entities will continue with this trend.

It is logical that these sectors are using sensors, drones and smart grids as advanced measurement elements and sources of information. From these resources, systems are developed to interact with consumers, perform real-time monitoring, establish variable rates and manage supply and demand. Likewise, technologies associated with more advanced stages of digitalization are just beginning to generate attention in LAC: applied artificial intelligence, robotics, machine learning, and autonomous vehicles, have much room to grow. Towards 2025, there is greater interest in advancing the deployment of artificial intelligence and environmental technologies to reduce the carbon footprint.

Technology adoption also requires solid strategic planning, as well as training and cultural change. These factors become especially relevant when considering that in the energy sector one in three entities is becoming aware of the digital transformation, while in the transport, approximately half of those interviewed are in this maturity phase.

However, public entities face a significant challenge since in both sectors a little over 40% have not established a digital transformation strategy, lagging the private sector, in which 7 out of 10 entities have already outlined a solid strategy.

A relevant fact is that around a third of entities surveyed feel they are lagging compared to their counterparts in Latin America and the Caribbean. If we expand the comparison to a global level, this sentiment becomes even more pronounced, especially in the energy sector. The data highlight the urgent need to improve competitiveness and adopt more advanced practices. Countries such as Argentina, Bolivia, and Guatemala are perceived to be further behind compared to nations such as Brazil and Chile, which have advanced towards more competitive positions in this regard.

Although entities have important reasons to make investments in digital transformation such as automating processes, reducing costs, improving security, and contributing to environmental objectives; they still face various barriers such as low budgets, high implementation costs, lack of digital culture and resistance to change. For this reason, large companies are the ones that show the greatest progress, while reduced integration in value chains and the lack of capital limit the progress of SMEs.

Recommendations for the adoption of digital transformation

For critical infrastructure, it is imperative to move forward with regulatory and policy instruments that stimulate digital transformation and mitigates risks. This includes cybersecurity strategies, data protection, foresight studies, public consultations, pilot development, learning programs, and regulatory sandboxes. It is also important to generate fiscal and financial incentives to facilitate the adoption of innovative technologies, and the creation of technological centers to test technologies and develop knowledge.

At the same time, it is necessary to promote the digital transformation of the public sector, with internal and sectoral strategies. This involves advancing the reengineering and digitalization of procedures, promoting a solid digital culture, basing decisions on reliable data and carrying out effective technological management of infrastructure assets and public services. Furthermore, cybersecurity stands as a crucial pillar in this digital transformation process to guarantee the integrity, confidentiality, and availability of critical public sector data and systems.

Finally, synergies must be promoted between sectors, private and academic agents, as well as inter-institutional committees and ad-hoc technical groups. It is also important to stimulate connectivity and interoperability between agents in the value chain and give participation to consumers through new services or business models.

If you want to know more about the state of digital transformation in the infrastructure sector, download our publications on the Energy and Transport sectors.


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José Irigoyen

José Irigoyen works as a Lead Operations Specialist in the Energy Division of the Inter-American Development Bank. His focus is on the digital transformation and decarbonization and resilience of the energy sector in Latin America and the Caribbean. Previously, he was the Operational Advisor in the Infrastructure and Energy Sector. At the IDB, he also served as Country Coordinator for Haiti in the program for the reconstruction effort after the 2010 earthquake, and I as Coordinator of the Mesoamerica Regional Integration Project. Irigoyen joined the IDB in 2004 as a consultant on citizen security and sustainable tourism. An Argentine citizen, Irigoyen holds a bachelor's degree in economics from the University of San Andrés (Argentina) and a master's degree in economics and finance from the University of Navarra (Spain).

Nayeli Mayorga

Nayeli Mayorga is a technical advisor for the public sector of the UKSIP Program within the Energy Division of the IDB. Nayeli has more than 13 years of experience designing and implementing international cooperation programs in the energy and infrastructure sectors. Before joining the IDB, he collaborated for more than 10 years for the United Kingdom embassy in Mexico coordinating technical assistance funds in the Energy, Infrastructure and Critical Minerals sector. She has a degree in Political Science and International Relations from the Center for Economic Research and Teaching (CIDE) in Mexico.

Maria Pfeifer

María Angélica Pfeifer es Consultora de Transformación Digital en el Banco Interamericano de Desarrollo (BID), donde gestiona programas de innovación tecnológica para los países de América Latina y el Caribe en las áreas de Transporte, Energía, y Agua y Sanidad. Antes de unirse al BID, María Angélica trabajó como consultora de gestión de la transformación y tecnologías de información por 18 años. Fue socia en Azurian Consulting. Recibió su grado como Ingeniera Industrial de la Universidad de Los Andes y tiene un título de Alta Gerencia de la Universidad de Los Andes.

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