By Jonathan Joel Mentor
When discussing the digital economy in Latin America and the Caribbean, the conversation often fixates on whether the region is failing to capture its share of global digital trade. But I argue that the real crisis is not a lack of digital trade potential—it is a failure to convert that potential into integrated regional commerce.
This diagnosis may feel uncomfortable, because on paper, the region’s digital trade growth looks impressive. A new joint report from the Inter-American Development Bank, World Bank, and World Trade Organization documents that the region’s exports of digitally delivered services surged from $18.5 billion in 2005 to $87.7 billion in 2024. Today, these exports make up roughly one-third of the region’s total commercial services exports—data that many policymakers are quick to highlight as a sign of success.
Dig deeper, however, and this progress reveals a critical gap. While the region has grown its digital exports, it holds just 2% of the global market for digitally delivered services in 2024—far less than the region’s talent pool, innovative companies, and market size should allow it to capture. But the most telling statistic is the abysmally low level of intraregional digital service trade: in 2023, intraregional digitally deliverable service exports hit only $7.8 billion, equal to just 8.4% of the region’s total digital service exports. Compare that to 62.4% for Europe, 41.3% for Asia, and 14.7% for North America, and the gap becomes impossible to ignore.
The region has mastered the art of selling digital services to the rest of the world. What it has not mastered is making its own regional markets commercially accessible to one another.
## The Persistent Invisible Border
Digital technology creates the illusion that borders no longer matter. A software developer in Santo Domingo can deploy a product to Bogotá the same day it is finished; a tech team based in San José can deliver services to clients in Kingston without ever boarding a flight. On the surface, cross-border digital trade feels frictionless—until it comes time to actually close a deal.
That is when the invisible border re-emerges. For a transaction to go through, a buyer must first understand the offering, trust the seller, navigate differing procurement rules, negotiate contracts, address data governance requirements, set up cross-border payments, ensure regulatory compliance, and allocate risk. At every step of this process, outdated systems and fragmented institutions create unnecessary barriers that can kill a deal before it is finalized.
The internet has compressed the physical distance between supplier and customer, but regional institutions have quietly rebuilt that distance between a buyer’s initial interest and a completed purchase. There is no shortage of demand for regional digital services—what is missing is the infrastructure to turn that demand into actual regional business.
This barrier hits the region’s emerging digital service providers the hardest. Young companies often use neighboring markets as a testing ground and stepping stone to larger global markets. If accessing the market next door is unnecessarily complex and costly, these firms lose their natural bridge to the rest of the world.
## Regulation Is Not the Whole Story
When asked about barriers to regional digital trade, policymakers and analysts often default to blaming inconsistent regulation. It is a convenient answer: it lets every institution point the finger at someone else. Regulation certainly matters, but it is far from the full picture.
Even a company with strong broadband connectivity, reliable cloud infrastructure, a high-quality product, and a legally valid electronic contract can still fail to break into a neighboring market. The hard, unaddressed challenges are practical: identifying the right buyer, understanding how local institutions make purchasing decisions, finding trusted local partners, adapting the offering to local needs, setting up functional cross-border payment systems, and building a track record that unlocks future customers.
These are not abstract questions about regional integration. They are concrete commercial questions about power dynamics, trust, budgeting, and clear pathways to completing a transaction.
I have argued previously that regional capital often waits for foreign validation before investing in local companies. Regional digital markets suffer from the same reflex. A regional digital company only becomes a known and trusted entity for other regional buyers after it has secured customers and validation from Miami, New York, or Madrid. The company’s fundamentals have not changed—only the external signal that it is a credible player.
This overreliance on foreign validation is a dangerous habit. We are building a regional ecosystem where companies are capable of serving global clients, but the commercial connections between our own regional markets remain underdeveloped. Foreign validation becomes a shortcut that allows regional firms to skip the hard work of building trust and transaction pathways with their neighbors.
## Market Entry Requires More Than Visibility
Too often, companies and governments treat market entry as a marketing problem: translate the website, send a delegation to a trade show, hire a local representative, run some ads, and get introductions to key contacts. These steps can be useful, but they do not add up to a functional system for entering new markets.
The real question is: how can a qualified business opportunity turn into a signed, completed cross-border transaction, and can a company repeat this process without having to rebuild the entire system from scratch every time?
A robust, functional market entry system does more than just make a company’s offering visible to regional buyers. It clarifies the offering for local buyers, creates a clear path to decision-makers who control budgets, simplifies contracting and payment processes, and eliminates the need for company founders to reinvent the entire process every time they enter a new border. Market entry is not about brand visibility—it is about building a repeatable pathway from initial buyer interest to generated revenue.
I have identified four core commercial questions that every company and region must answer to build functional regional digital trade routes:
| Critical Criterion | Core Question |
|————————–|——————————————————————————–|
| **Market Legibility** | Can the buyer understand the economic problem the product solves and its local relevance? |
| **Institutional Access** | Is there a credible, clear route to the decision-maker with budget authority, the procurement process, or local distribution channels? |
| **Transactionability** | Can the firm complete contracting, issue invoices, collect payment, and comply with all cross-border regulations without improvising every step? |
| **Repeatability** | Can this same pathway be reused when entering the next market without the founder starting over from zero? |
Even a company that has found product-market fit can fail if it cannot answer these four questions. A region can have all the talent, connectivity, and ambitious founders in the world, but it will still underperform if the pathways to buyers remain weak and fragmented.
## The Dominican Republic’s Opportunity to Lead
The Dominican Republic has a unique stake in solving this problem. WTO data shows that the country’s digital service exports hit nearly $2 billion in 2024—roughly 10 times their 2005 level. This gives the country a solid base to build on.
The question now is not whether the Dominican Republic can grow its digital exports—it already has. The question is whether the country wants to be just another exporter of digital services, or a regional hub that builds out the commercial routes that connect the Caribbean and Latin America.
We often talk about the Dominican Republic as a regional gateway, but a gateway is only useful if it removes friction for cross-border commerce. If the country wants to position itself between the Caribbean, Latin America, and larger global markets, it needs to do more than just promote its digital sector to outsiders. It needs to build out the institutional routes, buyer access, transaction infrastructure, and repeatable pathways to revenue that make cross-border regional business easy and predictable.
This is not just a problem for startups to solve in the name of regional integration. Export promotion agencies, banks, payment providers, large corporations, industry chambers, investors, and development institutions all control different pieces of the cross-border transaction puzzle. The opportunity emerges when all these stakeholders work together to build connected, functional routes, rather than acting as a disconnected set of well-intentioned organizations each working in their own silo.
## Building a Strong Internal Commercial Spine
If the region’s most ambitious digital companies still need to win customers and validation in the U.S. or Europe before they become credible to buyers in neighboring Latin American and Caribbean markets, we will end up with an export economy that has a weak internal commercial spine. We will generate export revenue, but we will leave regional customer connections, institutional learning, and repeatable cross-border scale underdeveloped.
What is missing is not identical national regulations, a common regional currency, or one giant single regional marketplace. What we need is enough compatibility between regional buyers, institutions, and transaction systems that a capable digital company does not have to start from zero every time it crosses a border into a new market.
Building this compatibility is a more demanding challenge than launching startups or attracting foreign capital. It requires treating regional market access as core economic infrastructure—something that needs clear ownership, defined pathways, evidence of impact, and a focus on measurable conversion of buyer interest into completed transactions. If no one takes ownership of building out this conversion infrastructure, fragmentation will continue to win.
Latin America and the Caribbean have already proven that we can build world-class digital companies and export digital services to the world. The next critical test is whether we can become our own best market, instead of waiting for foreign markets to validate our companies for us.
The next great opportunity for digital trade in the region is not simply to export farther across the globe. It is to make Latin America and the Caribbean commercially close enough that our companies do not need a foreign market introduction to do business with one another.
