Overview

Panama is considered a highly viable hub for the digital economy because of its advantageous location and attempts to modernize its economy. On the other hand, it has some difficulties in its quest for digital transformation, much like any developing country. However, Panama has taken strides to protect the personal data of its citizens by passing Law No. 81 on personal data protection. The data protection law went into effect on March 29, 2021. The government of Panama is focusing on the following areas to make the most advancements in the digital economy: regulatory framework, digital inclusion, talent development, and taking advantage of public-private partnership agreements. 

Opportunities 

There are interesting opportunities in Panama for digital economic development, such as: 

• Regional Connectivity: Panama’s geographic position is ideal for data centers and cloud computing services due to its strategic location at the intersection of North and South America. Its attractiveness is further increased by its robust logistics network.  
• Financial Services: Digital innovation can assist Panama’s financial services industry. Fintech businesses are creating cutting-edge loan, insurance, and payment solutions. 
• Tourism and Hospitality: Panama’s tourism and hospitality industries stand to gain relevance from the digital economy. Digital marketing, smart city initiatives, and online booking platforms can boost tourism and stimulate the economy. 
• eCommerce: Businesses and consumers in Panama have many opportunities due to the emergence of eCommerce. 

Challenges 

Some of the challenges that both private sector and government must work together are the following: 

• Digital disparity: In Panama, there is still a digital contrast between urban and rural areas despite advancements. Digital services and dependable internet connectivity are still weak or non-existent in most rural areas.  
• Regulatory Framework:  Panama must make sure its laws are current and enforced.  Currently, Law 31 from 1996 regulates the telecommunications in Panama with some updates. 
• Infrastructure Restrictions: Although Panama has invested in its ICT infrastructure, more improvements are required to meet the rising demand for digital services and high-speed internet.  
• Threats to Cybersecurity: As Panama’s digital infrastructure grows, so does its susceptibility to hackers. One of the biggest challenges is protecting infrastructure and sensitive data.  
• Talent Shortage: There is a shortage of qualified workers in the ICT sector, especially in fields like software development, data analytics, and cybersecurity.