Chile
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Productivity, industry 4.0 key to solve Chile’s economic troubles

Bnamericas Published: Tuesday, January 14, 2020
Productivity, industry 4.0 key to solve Chile’s economic troubles

At an event, Chilean industry heavyweights highlighted the importance of productivity and industry 4.0 to get the country back on track. 

Measures are necessary because uncertainty and slowing growth created by the social unrest that started last October could lead to a loss of about 25,000 manufacturing jobs this year.

The country “will grow 1% and investment will drop 8%. Performance in 2020 will depend on internal issues not external ones,” Dante Arrigoni (pictured), president of metallurgic industry association Asimet, said at the event in Santiago.

Arrigoni said the current crisis is a consequence of an economic model focused on exporting few products. To alleviate the problem, he demanded long-term public policies to improve industrialization through knowledge addition.

“The commodities boom has hidden the lack of diversity and low added value of Chile’s exports. We have lost profitability and our growth will depend on productivity improvements. Modernizing our economic system is fundamental,” he said. 

According to Arrigoni, the country is half as productive as the OECD average, reaching only 40% of US productivity. Just by improving productivity, economic growth could reach 4-5%, he said.

In an interview with BNamericas last October, Arrigoni said Asimet contacted the finance, economy and labor ministries to talk about a strategy to harness the opportunities industry 4.0 offers. But Asimet never received a response.

MINING, INNOVATION

During the event, former board chairman of state copper miner Codelco, Oscar Landerretche, said solving inequality and manage growth expectations are Chile’s biggest challenges to overcome the crisis. 

“Chilean government must promote a public conversation about needed institutions. We don’t need diagnoses anymore, we need action,” he said. 

Industry 4.0, Landerretche said, could help and should not be seen as destroying jobs, but as a tool to create them. 

“The mining cluster represents a big opportunity to create new jobs. The core of the industry is already automatized, but within services and providers we have a lot of options to generate knowledge and add value to our products. To achieve this, local providers must get more government support,” Landerretche told BNamericas. 

Landerretche also said development agency Corfo should be bolder.

“Corfo’s biggest problem is it’s risk aversion. Innovation is risk intensive and sadly Corfo has a demolishing indicator: all its projects are successful. An innovation agency where all the projects are successful isn’t really innovating. Chile’s public management concept doesn’t allow risk and that must be changed,” he said. 

Photo credit: Asimet

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