Artificial intelligence gathers pace in Latin America

A fast-developing ecosystem is emerging in the region despite the challenges, with projects at almost the same level of other parts of the world, according to new research.

The adoption of artificial intelligence is growing fast in Latin America, with businesses of all sizes deploying the technology to tackle critical issues despite the challenges faced by the regional ecosystem, according to a new report.

According to the study by MIT Technology Review produced in partnership with Genesys on trends in AI adoption and the current state and the future of data sharing in Latin America, "there are many opportunities for the region, if it moves quickly."

Latin firms are using AI to tackle critical regional issues, including food security, smart cities, natural resources, and unemployment, according to the study, with the level of sophistication of AI projects at almost the same level as other regions. About 80% of large businesses in the region reported having projects underway, with early benefits including increased operational efficiency and management decision-making. This compares with 87% in North America and 95% in Asia-Pacific.

The researchers predict that by 2022, AI projects are expected to accelerate, with almost two-thirds of respondents in Latin countries saying they expect 21%-40% of their processes to use AI three years from now, with the areas of fastest growth being logistics and supply chain management, as well as sales and marketing.

The report noted that all industry sectors in Latin America have been ramping up adoption of AI, mostly for customer service, cited by 55% of respondents. Banks and airlines in the region have been at the forefront, taking advantage of chatbots and virtual assistants to improve response times and lighten administrative loads. The report also noted the emergence of a number of AI customer service-focused startups in the region.

When it comes to applications of AI in other parts of the business beyond customer service, the study noted the use of the data-driven technologies is still incipient but that is set to change. For example, while only 4% of businesses in Latin America are using AI in human resource management, the study noted that by 2022, close to one in five businesses in the region will use AI in people management processes.

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However, Latin America faces a number of challenges to unleash AI adoption, according to the report, such as difficulty in adapting business processes to use AI insights and quality or availability of data. Another massive hurdle is skills, compounded by an ongoing brain drain and the limited adoption of AI and advanced technology by universities, as well as the disconnect between academia and industry.

"Latin America has always been this place where if you have talent, you go somewhere else," says Omar Costilla-Reyes, an AI research fellow at MIT.

The study noted that the political fragmentation of Latin America means the region cannot compete with Europe, China or the US on AI given the lack of resource allocation and regulatory coherence. However, the authors of the study noted that smart national policies do reap benefits and that many governments in Latin America have produced or are developing AI plans.

The report cited the example of Brazil, where a national Internet of Things plan has been launched and the country's commitment to a network of AI laboratories across strategic areas including cybersecurity and defense, as well as the government digitization program that is currently underway.

But the authors noted that Latin America's AI ecosystem would benefit from greater policy continuity and regional collaboration. "Many countries in the region have developed or are developing national AI plans, but political volatility is interrupting or limiting policy continuity", it said.

The hurdles to AI adoption currently seen in the region also prevent Latin countries from having a unified voice on ethical a regulatory issues around the technology: "Experts are concerned that the dominance of other blocs, especially the EU, could result in frameworks that are harder for Latin American companies to adhere to."