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22 Mar 2023

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Overview: Latin America and the IDCA Smart Nations EESG Index

Latin America is a large, developing region of more than 600 million people and about $5 trillion in annual GDP. These numbers represent about 8% of the world's population and 5% of global GDP.

IDCA Smart Nations Research defines Latin America as Spanish-speaking nations from Mexico through Central America and the Caribbean to South America – plus Portuguese-speaking Brazil. We currently have 20 nations surveyed and ranked in the IDCA Smart Nations EESG Digital Readiness of Nations Index.

The “Big Three” Latin American nations in size are Brazil, Mexico, and Colombia. Combined, they encompass more than 60% of the region's people and economic activity. Brazil has entered the G20 club with its $1.5 trillion economy; Mexico now also generates more than $1 trillion in annual GDP. Chile and Uruguay are the most highly developed nations in the region, as is US territory Puerto Rico.

Economy, Environment, Social, Government
The EESG Index integrates more than 100 factors into a process that scores 147 nations of the world in the categories of Economy, Environment, Social, and Government.

* The Economy score considers a country's existing state of Digital Infrastructure relative to the nation's overall wealth, its cost of living, and physical infrastructure.

* The Environment score is weighted toward a nation's carbon footprint, but also considers

* The Social score considers income disparity, health and healthcare, education, transportation, and other quality-of-life factors.

* The Government score centers around corruption, direct investment, and stability.

An overall score combines the four categories. All category scores and the overall score are presented on a scale of 0-100 points. A benchmarked, optimal country called “Perfectland” scores 100.

The highest real-country scores are in the 80s. The world average is 42, and the 20 nations surveyed in Latin America also average 42.

Sustainability is the Key
Carbon reduction and a move toward Net Zero is the key existential issue of our times. Furthermore, economic and societal progress from the present time forward must be created on a sustainable-energy foundation.

Thus, the size of a nation's carbon footprint – per capita (per-person) as well as in terms of economic efficiency, is the most consequential factor within the EESG Index. As a result, the Environment score is the lowest among the four categories in the Index for most of the world's nations, and for the world overall.

The Scorecard
Latin America's scores in the EESG Index are:

Economy 61
Environment 36
Social 41
Government 39
Overall 42

The Big Three countries score as follows:

Brazil - Economy 69 | Environment 54 | Social 36 | Government 41 | Overall 50

Mexico - Economy 44 | Environment 10 | Social 43 | Government 33 | Overall 30

Colombia - Economy 62 | Environment 44 | Social 39 | Government 42 | Overall 46

Uruguay and Costa Rica lead Latin America overall with respective scores of 73, and 64, which also place them at 7th and 13th in the world. Chile also has a high ranking, with its score of 56 placing it 28th in the world.

Brazil ranks 47th, Colombia 61st, and Mexico 131st.

A serious discussion of building more data centers and related digital infrastructure anywhere, including Latin America, must account for existing local providers, their willingness to have such discussions, the thoughts of government officials, as well as local and regional politics.

There are also thousands of additional calculations and correlations that can be made from all of the index in the EESG Index. For now, it can be seen that Mexico's carbon footprint is a very large issue. It must be addressed first before focusing on other categories. Mexico's environmental score contributes only 10.4% to its overall score, compared to 34.5% for Brazil, 30.6% for Colombia, and 26.9% for all of Latam.

This data says that Brazil, Colombia, and other Latin American countries have a need to focus on their social structures – for example, access to the internet and the digital divide, income disparity, government transparency – but also remain aware that new development must be powered by sustainable energy resources.

Image of Mexico City from Encyclopedia Brittanica.

Note: please feel free to reach out to IDCA or to the author directly via LinkedIn.

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