The Inter-American Development Bank (IDB) has approved a loan of $8 million to Uruguay, which will be used to develop workers’ digital skills related to new technologies in the knowledge-intensive goods and services sectors.
The scheme hopes to achieve the “internationalization” of Uruguayan companies.
It also seeks both to “boost the supply of human capital with advanced digital skills” necessary for working in the sectors, and to “strengthen the internationalization capabilities” of companies which operate in these sectors or which integrate knowledge-intensive goods and services into their processes and products.
The program will be headed by the Technological University of Uruguay (UTEC), which aims to provide training that will suit the specific needs of different regions within the country. More than 400 UTEC students are expected to benefit from the training, while approximately 45 scholarships will be on offer to women, teachers, and residents of certain regions.
Additionally, 150 companies which are based in export-oriented regions or are exploring the internationalization of their products or services will benefit from the scheme, while 90 companies will “gain access to opportunities for internationalization and the incorporation of qualified human capital.”
The scheme will also promote partnerships with international academic institutions to develop further education programs, in addition to the training courses for teachers in the fields of technology, climate change, gender, and diversity.
The loan application to the IDB, submitted earlier this month under the title “Uruguay Global II: Promoting Advanced Digital Skills for Internationalization,” outlined the reasons why Uruguay would benefit from the funding.
Among the reasons were that, while Uruguay’s economic and political stability offer an attractive climate for investment, the country still “lags behind” regarding integration into global markets, particularly in comparison to countries with levels of development similar to those of Uruguay. The application states that Uruguay’s integration into global markets is essential if it is to “foster sustainable growth,” given that the country has a small domestic market.
Additionally, the application recognizes the global significance of the knowledge-intensive goods and service sector, which has grown over the past decade. Uruguay has “succeeded in growing and positioning itself in the sector,” with the sector employing nearly 45,000 people in the country in 2023 (representing 3.6% of formal jobs), and exports of knowledge-intensive goods and services doubling between 2012 and 2023.
Despite this, the document states that Uruguay has a “limited” supply of human capital which is skilled in knowledge-intensive goods and services: a problem which is heightened by the country’s slow demographic growth, the country’s small scale, and low rate of graduation from high school (approximately 49%).
Furthermore, there is a stark disparity between the number of digitally-skilled workers in the capital Montevideo, which is home to 85% of the country’s ICT-competent workers, and regions outside of the capital. In 2023, there were 2.63 job openings for each student beginning ICT training outside of Montevideo.
The overarching objective of the program is described in the application as being “to promote Uruguay’s integration into global markets by developing skills for new technologies in knowledge-intensive goods and services sectors.”
The loan has an amortization period of 24.5 years, a grace period of six years, and its interest will be based on the Secured Overnight Financing Rate (SOFR).
