Volume 44, Number 173,
April-June 2013

Knowledge Capitalism and the Telecommunications Service Industry in Mexico, Sergio Ordóñez and Rafael Bouchain, Institute of Economic Research – unam, Mexico, 2011.

The telecommunications industry in Mexico is facing enormous challenges as a result of four key factors:1) technological convergence,2) backwards regulation (which implies litigation and the rise of interests that hinder advancements towards modern and efficient legislation),3) the global environment of competition and liberalization and4) the rapid advance of information and communications technologies (ict). However, some of this situation is due to a series of economic factors that merit prudent study.

The work Knowledge Capitalism and the Telecommunications Service Industry in Mexico, by Sergio Ordóñez and Rafael Bouchain, clearly explains the importance and role of telecommunications in the international context and the national economy. They argue that knowledge capitalism is a new phase of industrial and economic development.

In all of its phases, capitalism has been based on diverse factors. In the current phase, the main input, so to speak, is knowledge. And knowledge is born from information, which is transmitted through telecommunications networks and infrastructures.

Once the telecommunications sector has converged with the computer and audiovisual industries, the possibilities for transmitting information and the consequent increase in knowledge are practically infinite.

In this way, knowledge is a major productive force and a powerful generator of economic growth and value.

Information is like the blood running through the veins of the telecommunications industry, and this sector is one of the most dynamic in the national economy. The analysis done by the authors reveals that the Telecommunications Services Industry (tsi) was one of the most dynamic sectors in the country’s overall economy from 1990 to 2010 (Ordóñez, Bouchain, 2011: 33).

The topic is therefore extremely pertinent and current, even more so in Mexico. The book also clarifies the process and evolution of knowledge capitalism and the state of tsi in Mexico. A comparative study reveals where Mexican telecommunications are located in the international context, as the country participates in global knowledge processes.

One of the main objectives of this work is contribute to the national debate surrounding the tsi. The authors believe that this is based on three pillars (interconnection of networks, convergence of services and regulation), but that more factors should be taken into account in the discussion.

Various lessons can be derived from this text. One of them refers to the vision of telecommunications companies that are developing in Mexico and the paths they should follow to avoid falling behind other nations.

Another major contribution of the book is its explanation of the link between the scientific-educational (sc-e) sector and overall social production, supported by the evolution of the Electronics and Computer Industry (se-i), and how this produces knowledge, a central driving force in the new phase of development.

The authors thus arrive at an essential and current idea regarding the development of the telecommunications industry in Mexico: there is little relation to innovation and scarce investment in Mexico for science and technology oriented towards this area. In the cycle of R+D+i (research + development + innovation), Mexico is still playing catch up.

The authors believe that the se-i is a key nucleus and makes production more dynamic, as well as growth and global commerce, and that the tsi is an essential segment of its activities or services.

However, unlike in other nations, where the se-i is not dependent on foreign technological development and R+D, in Mexico, the tsi has a medium-low score in technological development, as well as penetration rates, coverage and network capacity.

After describing the situation of the Mexican telecommunications industry, the authors conclude that in essence, the way in which the profit-seeking and monopolistic industry has developed with a special focus on production, differentiated by the services provided, is contrary to the development needs of knowledge capitalism. The current state of the tsi is therefore an obstacle to industrial progress, preventing us from closing the gap between our sector development and that of other countries, not only with more advanced or similar economies, but also some nations that are even less developed.

Besides this diagnosis, the book offers some solutions. The tsi should transition away from telephone services and focus more on Internet and SIC services with an open model, as well as share infrastructure.

The researchers also mention another extremely important aspect. The tsi should be based on innovation in its services and a model where intellectual property is developed, and productive differentiation and innovation based on entrepreneurial capacity are the principal motors of international revenue.

Finally, it is useful to point out that this book serves as a guide for those studying and interested in the topic to understand the current situation of the tsi in the new phase of development known as knowledge capitalism.

It does not hurt that Ordóñez and Bouchain are precise writers, facilitating understanding without going off topic or overly complicating the analysis provided in this key work.

Wilma Arellano

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 195 October-December 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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