**2. Technological development in emerging economies**

Digital transformation has substantially changed the dynamics of modern life [1]. The impact of the arrival and expansion of technology is currently evident in all industrial sectors and, consequently, in people's lives. According to Internet World Stats (2022), the growth of the Internet between 2000 and 2023 globally has been 1392% of new users, implying that more people and organizations have used the different resources developed on various platforms to carry out a large part of their daily activities [2]. This growth is the product of the increase in Internet penetration, which currently stands at 70% of the world's population. Despite this surprising figure, this growth trend has not been symmetrical for all countries because when analyzing this information by region, there are evident inequalities between the availability and use of the service. Developed economies, such as North America and Europe, dominate penetration, while Asia and Africa have the lowest Internet service availability and use (see **Figure 1**).

In the case of emerging economies, these inequalities are also evident within each region, specifically in the Americas. America has 80.5% penetration with a share of 10% of total global users. However, this share presents apparent inequalities at the sub-regional level. North (94%), South (85%), and Central (78%) America are above-average penetration, while the Caribbean (67%) has significant differences concerning the other regions of the Americas.

The pandemic made a notable contribution to promoting the use of technology in the face of the mobility restrictions imposed by the countries. According to the available data, this digital transformation is occurring asymmetrically or unevenly in emergent economies. Adoption of advanced digital technologies, such as 5G mobile networks, the Internet of Things, artificial intelligence, and robotics, among others, is transforming consumption, business, and production models, ushering in a new era

*Technological Adoption in Emerging Economies: Insights from Latin America and the Caribbean… DOI: http://dx.doi.org/10.5772/intechopen.112004*

### **Figure 1.**

*Global Internet penetration rate based on percentage of total population 2023 [2].*

in which we are transitioning from a hyperconnected society to a digitized world on the economic and social levels. According to Report, this new paradigm implies the coexistence of the traditional economy's organizational, productive, and governance modalities with the latest models emerging from digital transformation [3].

Finally, the Economic Commission for Latin America and the Caribbean (ECLAC) [3] assures that technological transformation presents challenges. That can help industrial development, especially in small and medium-sized enterprises in emerging economies and Latin America. This impact of technology extends to all industrial sectors and affects people's daily lives. Despite this, Latin America still faces challenges in investing in digital infrastructure to ensure universal coverage and access to high-speed broadband. Digital transformation has also enabled the generation of new business models and has been fundamental in defining new growth and social and economic development paradigms. Increasing digital accessibility is due to network infrastructure deployment, the widespread use of smartphones, and access to information, social networks, and audiovisual entertainment.

### **2.1 Digital inequality in emerging economies**

Emerging economies often experience digital divides due to several factors: lack of technological infrastructure, digital skills shortages, lack of technological investment, corruption, conflicts, and poverty. These factors can negatively affect access to and adoption of digital technologies, resulting in a digital divide between developed and emerging countries. According to the World Economic Forum's 2021(FEM), [4], less developed countries face a significant digital deficit compared to more advanced countries regarding Internet access and ICT use. The report also notes that the digital divide had widened due to the COVID-19 pandemic even before the problem existed, which was helpful. However, as a result, many emerging countries have experienced disruptions in education, trade, and the economy due to a lack of access to the Internet and digital technologies. For example, a study of the digital divide in Latin America and the Caribbean conducted by the IDB in 2021 found that 32% of the population did not have access to the Internet in the region and that there was a large gap between connectivity in urban and rural areas. In addition, the study found that the need for Internet access limits opportunities for education, employment, and citizen participation in the region [5]. The availability and accessibility of the Internet are closely linked to infrastructure, which has facilitated industrial development driven by technological advancements such as big data, artificial intelligence, and the Internet, transforming economic growth's speed and method.

The digital economy has emerged as a critical component of modern economies; however, its uneven development across the globe has led to a digital divide that further exacerbates economic disparities. According to Cai et al. [6], digital infrastructure is crucial to the digital economy and trade. Studies show that the diffusion of Internet technology significantly impacts the growth of e-commerce in several European countries. The quality and quantity of telecommunications infrastructure are also essential factors; when lands are affected, it can impact the trade of goods. The role of government and the importance of ICT infrastructure is crucial in the growth of the digital economy in different countries, as Di et al. [7] emphasized, also underscore the significance of innovation capacity and population in economic development. Due to their late embrace of digital technologies, low-income countries have seen rapid dispersion of Internet technology and broadband connectivity. On the other hand, technology spreads slowly in high-income countries because of their more advanced Internet infrastructure.

Digital data is taking on a strategic role as a source of economic, social, and environmental value creation in this ecosystem. The process of consolidating a new interconnected digital system is in full swing, combining models from both worlds to create complex ecosystems in organizational, institutional, and regulatory adaptation, constantly advancing along with technological advancements, and potentially enhancing well-being, productivity, and ecological sustainability in a variety of areas including society, production, and government. It comprises three dimensions: the connected economy, the digital economy, and the digitized economy. The connected economy involves expanding digital infrastructure, massifying access devices, and increasing people's connection to machines through the Internet of Things.

On the other hand, the digital economy refers to economic production based on business models enabled by digital technologies, which promote the generation and collection of data to offer new value propositions in the supply of goods and services in various economic sectors. In summary, the digital divide in emerging economies is due to multiple factors. Its solution involves investment in technological infrastructure, education, and digital skills, as well as public policies encouraging the adoption of digital technologies and poverty reduction [8].

### **2.2 Why focus on emerging economies?**

Accelerated economic growth and government policies favoring economic liberalization and adopting a free-market system are the hallmarks of a rising economy. In contrast, there has yet to be a consensus on defining an emerging economy, although widespread agreement should identify its member nations for their rapid economic development. Nevertheless, detailed criteria for identifying an emerging economy's economic growth rate and other economic factors remain to be determined [9].

One of the significant challenges facing the region is the adoption of digital technologies in the production process. Although there are no significant gaps in fundamental indicators, such as Internet access and use of electronic banking by *Technological Adoption in Emerging Economies: Insights from Latin America and the Caribbean… DOI: http://dx.doi.org/10.5772/intechopen.112004*

companies, compared with OECD member countries, these differences are more evident in hands, such as Internet use in the supply chain and sales through digital channels.

According to Digital 2023 [10], in January 2023, there were 353.3 million internet users in Latin America, representing a decrease over the previous year. There were also 312.4 million social network users, representing 71% of the region's population. Regarding de- vice usage, the report shows that smartphones are the most widely used device in the area, with a penetration rate of 68%; according to recent data, laptops take second place in usage. Interestingly, smartwatches and bracelets have experienced a significant increase in usage. Additionally, the majority of users use mobile links to access the Internet. However, there is a substantial difference in connectivity between the urban and rural populations, with 71% and 37%, respectively, having access to connectivity options, according to the report [5]. It is essential to remember that these are only some general indicators and that the situation in each country may vary.

Adopting digital technologies in production poses a significant challenge for the region. While there are no major gaps in fundamental indicators like Internet access and electronic banking usage in companies, there are noticeable differences in areas such as Internet use in the supply chain and sales through digital channels compared to OECD member countries. Smartphones are the most used device in the region, with a 64% penetration rate, followed by laptops at 34%. There has also been a 39% increase in the use of intelligent devices like smartwatches and bracelets. The report also reveals that mobile devices are the most popular means of accessing the Internet, with 66% of users doing so through their mobile devices. However, there is a significant disparity in connectivity between urban and rural populations, with 71% and 37%, respectively, having access to connectivity options, according to a report titled "Bridging the digital divide in Latin America and the Caribbean" by IICA, the IDB, and Microsoft in 2021. It is important to note that these indicators are general and that individual countries' situations may vary.

### **2.3 Accelerating development: Unlocking the potential of emerging economies**

The advent of digitalization can enhance people's well-being by improving their quality of life, income, and working conditions. This shift has opened access to information and digital goods, which can minimize travel times, reduce costs, and promote social inclusion. Furthermore, it can create job opportunities, encourage entrepreneurship, and enable individuals to maintain a healthy work-life balance. Entertainment and social networking can also contribute positively to one's well-being. Moreover, the digitized economy provides the opportunity to consume intelligent and personalized products that cater to individual preferences, encourage sustainable consumption practices, and reward environmentally friendly choices based on data related to the product's environmental footprint.

Current economic and social conditions, including the fourth industrial era driven by the digital revolution, climate change, the pandemic, and geopolitical tensions, have led to the implementation of renewed and ambitious, productive development policies. These policies are essential to improve competitiveness, increase participation in technological activities and improve the quality of employment and wages. However, these policies must consider the need for environmental sustainability and social cohesion rather than replicating traditional industrial development strategies. Effective development policies in the digital era must address data flows and

consider cybersecurity and international data governance. In addition, it is essential to foster the creation of integrated and focused digital ecosystems in strategic sectors, especially those that are innovation-intensive and export-oriented, that play a crucial role in supply chains and creating value networks while contributing to employment, productivity, and sustainability. The establishment of such digital ecosystems requires the backing of technological endeavors.
