What Can Artificial Intelligence Do for Stagnant Productivity in Latin America and the Caribbean?

What Can Artificial Intelligence Do for Stagnant Productivity in Latin America and the Caribbean?
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Volume/Issue: Volume 2024 Issue 219
Publication date: October 2024
ISBN: 9798400290770
$20.00
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Topics covered in this book

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Productivity , Artificial intelligence , Central America , Caribbean , Artificial Intelligence (AI) , Productivity Stagnation , Technological Innovation , Latin America , Caribbean , Economic Growth , Labor Productivity , Automation , Macroeconomic Impact , Digital Transformation , Cross-Country Analysis , Regional Development , Technology Adoption , Emerging Economies , Economic Policy

Summary

Since 1980, income levels in Latin America and the Caribbean (LAC) have shown no convergence with those in the US, in stark contrast to emerging Asia and emerging Europe, which have seen rapid convergence. A key factor contributing to this divergence has been sluggish productivity growth in LAC. Low productivity growth has been broad-based across industries and firms in the formal sector, with limited diffusion of technology being an important contributing factor. Digital technologies and artificial intelligence (AI) hold significant potential to enhance productivity in the formal sector, foster its expansion, reduce informality, and facilitate LAC’s convergence with advanced economies. However, there is a risk that the region will fall behind advanced countries and frontier emerging markets in AI adoption. To capitalize on the benefits of AI, policies should aim to facilitate technological diffusion and job transition.