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Digital Economics Updated: 14 Apr 2017

What can the Internet of Things do for Latin America?

The Internet of Things is today a reality. Apart from the benefits it can provide to companies, the IoT will become a powerful tool in the fight for citizen security, given its many possible uses.

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For some time now, the debate about the Internet of Things – the connection of physical devices such as cars, televisions, or home appliances to the Internet - has become part of our daily agenda. However, we rarely talk about the benefits it can bring – for example in the struggle for security in Latin American cities.

That’s what Carla Belitardo, Director of Strategy, Marketing and Communication at Ericsson Latin America, writes in an article for the World Economic Forum. In the piece, she mentions the importance of this new technological development, which “will have a profound impact on the future, as the public security sector is challenged to make operations more reliable and efficient.”

"Life is more digital than ever and many daily activities are conducted on line

The technological forecasts for the region are excellent. It’s estimated that in five years, the Internet of Things in Latin America will reach 100 million devices, given that these have an expected annual growth rate of 21%. “Life is more digital than ever, and many daily activities are conducted on line, rather than via the traditional channels,” says Belitardo, based on the Ericsson Mobility Report.

Although the Internet of Things is a reality, we still have to find which road we should choose to satisfy customer needs and consequently, which devices they would like to have connected to the Internet. According to the Ericsson report, television would be in first place in the region, followed by home alarm systems, cameras and cars.

Chile stands out in the use of online banking in the region

The report analyzes the most important uses of the Internet in the different Latin American countries. In Chile, 53% of Internet users carry out at least half of their banking activities through digital channels.

In fact, that percentage is greater than the number of Chilean Internet users that make purchases online (about 30%) or that book their vacations on the Internet (slightly more than 40%). Online education has also increased in the region; 44% of Colombian Internet users have participated in e-learning.

What is the Internet of Things, really?

The Internet of Things is a new technological wave in which all devices will be connected directly to the Internet. “These sources of information are generating a great deal of additional data that we didn´t have before, and which are going to allow companies to know their customers better and to offer value propositions based upon them,” says Álvaro Martín, chief economist for Digital Regulation at BBVA Research.

Among the advantages the Internet of Things offers is the possibility of giving devices autonomy, and the ability to respond to the needs of the moment. As Álvaro Martín says, “the Internet of Things will allow these devices to make payments directly. We will no longer need to look out for paying for the shopping, for example.  The refrigerator itself will connect directly to the Internet, do the shopping and pay for it with one of our payment methods”