Interview with Chelsea (Chip) White III, Ph.D. Schneider National Chair in Transportation and Logistics, Georgia Institute of Technology

In terms of logistics, what priorities do countries need to address to be more competitive in coming decades?

Competitiveness involves more than just logistics. It involves a lot of other things, including both physical and information infrastructures for moving goods and information. In many Latin American countries there is a need for physical infrastructure improvements. We see a trend in supply chain management that involves real-time control, based on real-time data. Ultimately, we also need an information infrastructure in place to support this trend. Let me also mention the innovation ecology, the laws and regulations that affect the movement of goods in and out of a country and more generally the capacity to innovate. In order to make use of an efficient logistics industry, you need goods to move both imports and exports. An advantage Latin America has is the increasing wage structure in China. Supplier footprints for supply chains for U.S. and European markets are moving to Mexico, the Caribbean, and Latin America. These regions need to provide a healthy supplier base for the rest of the world. This also requires an investment in people and in an educational process that develops  innovative-savvy skills. 

In terms of the value chain and logistics, what are Latin America’s key strengths and weaknesses?

An advantage is the region’s proximity to sea shipping. That does not reduce the need for good road or rail infrastructure, which is certainly a weakness in some parts of the region.  Latin America also has an advantage just because it can be a fun place to be. It can become a hub for innovation and investment if it can attract and retain the creative knowledge worker.  An obvious strength that Panama has is the Panama Canal, a potential place for value-added innovations. A weakness that Panama has is also the Panama Canal. It is easy, with a resource that can create wealth due to a commodity or special location, not to feel the need to continuously innovate. The Panama Canal is possibly a double-edged sword in that sense.

How do the Americas compare themselves with the rest of the world?

North America and the EU have a lot of regulations and political climates that are relatively consistent across the region. Latin America is different: it is more diversified in terms of access to water, climate, and in terms of tax structures. Also, there is a lot of variability in terms of the countries being easy to do business with, in labor market efficiency, the economic bases of the country, and industries that generate the most GDP. Another distinction is that many Latin American countries are small, which suggests all kinds of interesting challenges. The need for cooperation- particularly from an economic perspective- is much stronger than the need for cooperation from a country with a large land mass.

In your experience, what models and practices should be considered by Latin America and the Caribbean to both improve existing value chains and generate new opportunities?

There are two ways at looking at economic development. The first approach involves figuring out what industries will create jobs and wealth in the future, and then investing in those. The second approach involves investing in people. Why don’t we work on turning our country, our place in the world, into an interesting place to be for creative, highly-educated individuals and then let them chose the industries? This means finding, attracting, and retaining the talent and providing the enabling venture capital and infrastructures. 

 Taking into account the rapid advance of technology and communications, what are some priorities you recommend to high level authorities and competitiveness councils of the region for the next decade?

Excluding Brazil, Latin American countries are relatively small. In terms of regional interactions, I recommend developing a coordinated body to oversee both sea and land transport for the region. Further, I recommend developing an intermodal network. There is a need for coordination and cooperation in terms of moving goods, money, and information.

What are two areas in which you think it is possible to advance through cooperation among private and public actors from various countries in the region?

To speed up policymaking processes is a challenge everywhere. The first area I would like to see advanced is physical and information infrastructure.  The second area I would like to see advanced is in the investment of people- innovators, entrepreneurs, and those who can create generate wealth not only for themselves, but for society. If you gave me a third issue, I would say the innovation ecology- the legal system, the tax system, the economic incentive system in place that will attract not only companies and organizations, but also these creative knowledge workers.