Structural Challenges & Technological Opportunities

Latin America sits at a pivotal crossroads. On one flank, a web of long-standing deficits, in healthcare, learning, public trust, labor formality, financial inclusion, infrastructure, energy, and cybersecurity, continues to sap productivity and widen inequality.

Roughly 140 million people still lack reliable access to basic health services,⁶ and the latest PISA results reveal that teenagers in the region perform the equivalent of three to seven school-years behind their OECD peers in mathematics.⁷ Confidence in government has slipped so far that seven in ten citizens express little or no trust in their national institutions,⁸ fuelling political volatility just as the digital economy demands stable rules of the game. Add a labor market in which nearly one-half of jobs are informal,⁹ a persistent digital divide that leaves 230 million Latin Americans offline,¹⁰ and rising cyber-incidents, LATAM became the world’s fastest-growing region for disclosed cyber-incidents by 2024¹¹, and Deep Tech innovation can seem a distant luxury.

Yet the very scale of these gaps hints at outsized opportunity.

The region commands world-class biodiversity, booming renewable-energy corridors, and a growing cadre of STEM researchers eager to found science-based companies. This potential is most evident in lithium, where Latin America holds nearly two thirds of global reserves, concentrated in the "Lithium Triangle" of Bolivia (24%), Argentina (22%) and Chile (11%), though Chile has led the way by turning its reserves into commercial production.¹²

Beyond the momentum of its resources, Latin America offers compelling opportunities for greenfield FDI, projects where companies build new facilities from the ground up rather than acquiring existing assets. Greenfields are attractive given abundant land and natural resources, improving logistics links, and the ability to tailor plants to modern standards. For aerospace specifically, select geographies near the equator offer orbital-mechanics advantages for certain launch profiles, adding a niche location edge.¹³

According to the UNCTAD World Investment Report 2025, developing countries attracted more than $530 billion in greenfield digital-economy projects between 2020 and 2024. Close to 80% of this investment was concentrated in just ten countries, with Brazil and Mexico the only Latin American economies represented.¹⁴

Amid intensifying U.S.–China competition, near-shoring, relocating operations to nearby countries rather than distant off-shore locations, is disrupting the decades-old model of prioritizing lowest-cost production, instead emphasizing supply-chain resilience and regional proximity. Latin America has emerged as a prime beneficiary as companies in North America move "from pure cost efficiency toward resilience, redundancy, and regional integration," according to Fausto Carbajal.¹⁵

Mexico leads LATAM’s nearshoring wave, thanks to its geographic proximity, free-trade agreements, skilled and cost-competitive labor, and extensive logistics network, advantages expected to favor semiconductors, automotive, electrical equipment, medical devices, agribusiness, and food.¹⁶ Santander Mexico estimates near-shoring could drive FDI to levels exceeding remittances as soon as 2025.¹⁷ Beyond Mexico, countries like Colombia are becoming specialized IT hubs, creating complementary regional ecosystems.¹⁸

Latin America possesses the natural endowments, human capital and early-stage funding momentum to turn Deep Tech from a remote aspiration into a practical engine of inclusive growth.

Understanding this dual reality, the entrenched gaps and the emergent assets, is the first step. The pages that follow map the region’s structural challenges, spotlight global case studies of successful leap-frogging, and lay out the policy, capital-market and talent interventions to close the region’s long-standing "LATAM Discount."