by Dario Salameda – Co-Founder of LA Conexion
While there has been a significant increase in investment and trade relations between Asia, especially China, and Latin America over the last two decades; this increase has been in the commodities and service industries, these very traditional industries are about to be disrupted by new and emerging trends and the growth is forecasted to slow down as countries in Latin America and Asia realize that resource and service dependent economies are not the way forward but rather a relic of the past. Global economic trends a US foreign policy of exclusionism spur a spirit of innovation and collaboration between Asia and Latin America.
The need to adapt and change is notable and well known in Asia, but Latin America too is rapidly evolving and prioritizing innovation, new technologies and education and research. Hence, more than 20% of GDP across Latin America is now being invested in innovation and research and development. In the last 2 years the number of government-funded incubators has risen exponentially, and new policies are designed to encourage innovation in the private sector. In conjunction with the regional development the bilateral development between the two regions has taken a similar trend in that action plans are now prioritizing innovation and industrial capacity (China – Brazil 2015-2022).
The 2015 “1+3+6 Cooperation Framework” is reflecting similar ambitions: one plan –the China-CELAC Cooperation Plan; three engines – trade, investment and financial cooperation; 6 sectors – information technology, energy, infrastructure, agriculture, manufacturing, S&T. With the framework expiring in 2019 we expect it to be renewed with strong focus on 4.0 Technologies such as 5G, Blockchain, IoT and AI. Especially as failed infrastructure and resource heavy investments in the past have soured the relationship in these sectors (eg. Nicaragua’s Canal), the fast-growing technology and information technology sector offers a new way of collaborating not only in regard to investment but more so in regard to partnerships and for private businesses to partake. With leaders in local and federal governments in Latin America and Asia supporting events and companies like La Conexion who are active fueling and facilitating these efforts and new growth strategies.