Rebalancing the AI Economy: Strategies for Enhancing Latin America’s Competitiveness in the Global AI Era

Year 2025, Volume: 5 Issue: 2, 85 - 96, 31.12.2025

América Carvajal Piña , Quynh Anh Vu

https://doi.org/10.61192/indpol.1817629

Abstract

The rapid development of artificial intelligence (AI) has reshaped the global economy, concentrating technological and economic advantages in the United States, China, and Europe, while widening competitiveness gaps for regions like Latin America. Facing structural challenges in innovation, industrial policy, and digital infrastructure, Latin America must align AI adoption with its development goals. This study examines how to rebalance the AI–driven economy in the region through the interplay of industrial policy, global competition, and regional development. Focusing on Brazil, Mexico, and Chile as case studies, it analyzes innovation ecosystems, research and development (R&D) capabilities, and the integration of AI into public policy and industry. The paper identifies key barriers that hinder the region’s competitiveness and highlights industrial policies that can mitigate global imbalances, particularly those promoting AI investment, technology transfer, small and medium enterprises (SMEs) support. It also explores how AI can boost productivity in manufacturing, agriculture, and services while advancing sustainability. Finally, it proposes a strategic framework for policymakers, emphasizing regional innovation networks, collaboration, and AI–focused workforce training. Overall, the study offers recommendations to reduce the digital divide and foster sustainable growth, positioning Latin America to better navigate the challenges and opportunities of the global AI economy.

Keywords

Artificial Intelligence , Latin America , Industrial Policy , Economic Rebalancing , Global Competitiveness , Innovation Ecosystem

Ethical Statement

N/A

Supporting Institution

Institute of International Studies, University of Chile

Project Number

N/A

Thanks

N/A

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