An exclusive interview with Peru’s Ministry of Production

Hello everyone! 👋🏻

Welcome back to our Insider’s Corner, where we gather opinions from machine learning experts and practitioners around the globe with first-hand experience in the AI industry.

Today, together with Fernando Rodríguez Henostroza, a senior executive from the Ministry of Production’s ProInnóvate program, we explore the role of AI in Peru’s economic development. Fernando is an MIT-certified computer scientist specializing in machine learning, digital government, and DevOps. He has been with the Ministry of Production for nearly a decade. 

Disclaimer: This interview has been translated from Spanish and edited for clarity and brevity.

• Can you provide insights into the current AI landscape in Peru? How does it compare to the rest of Latin America? Has there been significant progress since the emergence of ChatGPT in 2022?

Right now, AI in Peru is in a growth phase, driven by both private sector initiatives and government efforts aimed at laying the groundwork for deep digital transformation. According to the Global AI Adoption Index, around 28% of Peruvian companies are already implementing AI solutions, placing Peru among the top five countries in the region for AI use. However, we still rank below Brazil, Mexico, and Chile.

One of Peru’s main challenges is strengthening its digital infrastructure and training professionals in AI. To address these issues, the government launched projects like ENIA 2021–2026, which promotes research, development, and adoption of AI by fostering talent and innovation initiatives.

The advent of technologies like ChatGPT from OpenAI, along with generative models from companies such as Anthropic, Google, and Meta, has sparked renewed interest in AI technologies. Since 2022, there has been greater momentum in exploring applications ranging from process automation and data analysis to the development of virtual assistants and new solutions for the public sector.

Overall, the outlook for AI in Peru is promising. While significant challenges remain, namely bolstering cloud infrastructure and acquiring more ML engineers, the country is positioning itself competitively compared to other Latin American nations.

• What strategic initiatives are the Ministerio de la Producción / ProInnóvate currently undertaking, and in which industries? Are these efforts coordinated with other ministries and key sectors of Peru’s economy?   

The Ministry of Production, which drives novel technology adoption and supports entrepreneurship through the national ProInnóvate program, is committed to modernizing and digitizing the Peruvian economy using different methods. 

Some initiatives have been launched to bring digital technologies into industries that have historically been pillars of the national economy, like mining, fishing, and textiles. In the textile sector, ML solutions are being developed to improve inventory management, while in mining and fishing, applications for automation, predictive analysis, and traceability are being explored, potentially leading to greater efficiency.

When it comes to centralized oversight, these efforts aren’t carried out in isolation. The Ministry of Production and ProInnóvate’s programs are part of a broader national digital transformation strategy. This means that, while ProInnóvate operates independently, it also coordinates efforts with other government agencies to ensure that technology adoption is integrated nationwide. Such state departments include Ministries of Mining, Agriculture, and Foreign Trade.

• We know that food tech is rapidly evolving through machine learning with companies like Nutri Co. Can you mention any other notable private sector players in Peru leveraging AI in food production or agriculture?

Yes, Nutri Co is a Peruvian startup with funding from ProInnóvate that creates healthy food items by formulating nutritious recipes on its Virgilio AI platform tailored to consumers’ needs. Other notable startups in this field include Nereuz and Farmonaut. 

Nereuz has developed a technology platform that combines AI, automation, and underwater robotics for the exploration, evaluation, and monitoring of hydrobiological resources.

Farmonaut, though not exclusively a Peruvian company, has contributed enormously to Peru’s ecosystem by offering satellite- and AI-based solutions for agricultural management, including crop monitoring and AI-driven advisory services.

• What about tech startup funding and government subsidies for those industries first in line to benefit from AI adoption?

ProInnóvate not only promotes innovation and entrepreneurship but also supports incubators and accelerators, including those building AI-based solutions. One of these initiatives is Startup Peru, which aims to strengthen the country’s innovation ecosystem by creating the right conditions for new companies to emerge. 

The idea is to introduce new technologies — among them AI — to improve pipelines, optimize supply chains, and create new business models across a wide range of sectors, including manufacturing and retail. The program channels non-repayable funding through competitive grants to help companies develop groundbreaking projects, which in turn bolster the country’s AI capabilities at scale. 

In addition to training programs and startup support, there are also government financing options and subsidies available for traditional companies that integrate AI technologies into their processes. These incentives facilitate lower adoption barriers, encouraging practical research and commercial optimization in key sectors of the Peruvian economy.

• While AI offers numerous benefits, it also poses challenges, including ethical concerns pertaining to how AI models are trained (e.g., bias in data labeling) and/or implemented (e.g., group discrimination). Is there a regulatory framework in Peru to control that? 

Although there isn’t a specific, definitive law in place yet, our nation’s government is making progress toward introducing a comprehensive regulatory framework that gauges ethical and social risks.

National AI Strategy: The aforementioned regulatory plan aligns with international standards and outlines strategic priorities, including the development of ethical and governance guidelines for the use of AI. One of its key goals is to promote the responsible use of technology, covering transparency in model training and measures to protect against employment discrimination. 

Legislative and interagency consultations: Discussions have begun in our nation’s Congress to define legal regulations for the use of AI in sensitive areas. These debates include the need to enforce accountability, protect citizens’ rights, and prevent the deployment of potentially dangerous AI models. While these efforts are still in the early stages, there’s broad consensus on the necessity to push legislation through. 

• What are your predictions and expectations as far as AI’s disruptive effects in Peru, Latin America, and the rest of the world in the months and years to come? 

☑️ In Peru

Positive effects:

• Boosting productivity: Some studies, like the one conducted by Microsoft and cited in reports on economic growth, suggest that if Peru accelerated its AI adoption, annual GDP growth could substantially increase over the next decade.
  

• Creating new jobs: The demand for professionals skilled in machine learning and data analysis will likely open up more specialized employment opportunities.
  

• Improving quality of life: Implementing AI-based solutions, such as virtual assistants, predictive health systems, and personalized education, could improve citizens’ quality of life and modernize government administration.

Negative effects:

• Risk of greater inequalities: If investment in infrastructure and training does not advance evenly, certain sectors and regions of the country may very well be left behind.
  

• Biases and discrimination: Automation could replace certain jobs such as HR or financial risk assessment, and without proper oversight of data and algorithms, discriminatory biases could be perpetuated or even worsened.

☑️ In Latin America

Positive effects:

• Transforming legacy sectors: AI could serve as a catalyst for modernizing conventional industries across the region, boosting the global competitiveness of Latin American countries on the global stage.
  

• Overall economic growth: Regional indexes like ILIA 2024, which tracks AI development in Latin America and the Caribbean, suggest that increased productivity and efficiency are on the horizon if current levels of government commitment to AI are sustained.

Negative effects:

• Inequality in adoption: Digital divides and skewed investment could mean that only certain countries benefit, potentially exacerbating not only national but also cross-country disparities in Central and South America.
  

• Persistent concerns: With so much interconnectivity, the lack of strong regulatory frameworks in some countries may ultimately allow issues like user privacy to surface repeatedly as challenges for the whole region.

☑️ Globally

Many of the aforementioned points apply to the rest of the planet, including AI leaders like the US, China, Singapore, South Korea, and European nations, particularly in areas such as chatbots, recommendation systems, cloud computing, and predictive analytics. 

What’s worth noting is that AI leaders are clearly closer to the full realization of the Fourth Industrial Revolution, which is poised to radically transform how we produce and consume, live and work. This process is evidently underway, with some countries already reporting significant gains in productivity and economic expansion.

It will be especially interesting to see how China continues on its trajectory of narrowing the leadership gap with the US. Some estimates suggest that AI could boost China’s GDP by 26% over the next five years, with considerably lower projections expected elsewhere.