Half of Latin America's GDP will be digitized by 2022, driven by offers, operations and digitally enhanced relationships, and expenditures in IT will reach US$380bn between 2019 and 2022, according to consultancy IDC.
On its 2019 predictions conference call, the company's LatAm head Ricardo Villate also predicted that AI-enabled user interfaces and automated processes will replace 25% of screen based apps by 2024, while a quarter of enterprises will be using conversational speech tech for customer engagement by 2022.
"In many ways, 2019 marks the start of a new era for Latin America," Villate said. "There are challenges to find new formulas for successful growth and innovation."
The consultancy sees strong growth in what it calls "third platform" technologies such as cloud computing, big data, AI and IoT, predicting that by 2022 close to 70% of all spending on IT in the region will be related to this segment, "as over 75% of all enterprises build 'digital native' IT environments."
The region, however, is still a long way from becoming a digital playground as the study, Villate added, found that only 15% of companies polled in the region see themselves already as digital natives. "Over four out of every five companies see themselves as exploring but not yet reaching the potential of the digital transformation," he said.
Technologies even more on the edge of adoption, he added, will also see advances, and Villate predicted that by 2022 over 5mn people in the region will have blockchain-based digital identities and over 20% of security alerts will be handled by AI-powered automation.
RECORD YEAR FOR SPENDING
Despite the uncertainties caused this year on the political front, as the largest economies in the region, Brazil and Mexico, saw radical political swings after elections, 2019 will see solid increases in IT and telecoms services spending in most countries, the study says.
Over 54% of all companies consulted by IDC said they will increase spending on IT in 2019, while only 17% expect to reduce it. IDC sees that the IT industry in the region will grow 8.2% next year, "over twice the [3.9%] growth rate of 2018," Villate added.
New technologies or "innovation accelerators" such as IoT, augmented/virtual reality, 3D printing, robotics and next-gen security, which currently represent around 8% of the digital spending bill in the region, will however see much faster growth at rates of up to 25% in the following years, he projected.
Brazil, Villate said, will probably benefit from privatizations of state-owned companies announced by incoming president Jair Bolsonaro, who takes office January 1, and see investments of US$53bn in IT next year, a 7.4% increase from last year, with telecoms services spending flat at US$47bn.
In the case of Mexico, following President Andrés Manuel López Obrador's inauguration on December 1, and with a new trade agreement in place with the US and Canada, Villate said the country could be looking at economic recovery in 2019. Spending on IT is expected to reach US$24bn, a 3.6% increase from last year, while telecoms services are projected to grow by 1% to US$29bn.
Chile will see flat spending in IT at US$7.1bn in 2019, while growing 2.5% to US$6.7bn in telecommunications services, IDC says.