InnovaLatino: Fostering Innovation in Latin America, a study based on a survey of 1 500 manufacturers in Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Peru and Uruguay, shows that some countries in Latin America have very innovative business models and marketing methods. The report, produced by INSEAD and the OECD Development Centre with the support of Fundación Telefónica, adds however that overall the region lags behind OECD countries in terms of innovation.
‘Latin America has made great strides in innovation, including in macro-economic-management, pro-poor policies and the development of new business models’ said Mario Pezzini, Director of the OECD Development Centre. ‘However, governments still need to invest more and better on innovation to increase productivity and compete in global markets. ’
As well as the private sector, the public sector has made great strides in promoting innovation in Latin America. For example, Argentina has created a new Ministry of Science Technology and Productive Innovation, which promises to make its innovation policies more coherent, and Chile is using the increased revenues from commodity-exports to support innovation. Other cases of experimentation can be found throughout the region.
‘Innovation is not just R&D in laboratories,’ notes INSEAD eLab’s Soumitra Dutta. ‘This study will inform Latin American policy makers who can establish the conditions necessary to encourage more firms to push forward the innovation frontier.’
InnovaLatino’s recommendations include:
- Take advantage of the region’s economic strength - abundant natural resources - to invest more in research and development and further green innovation. At present, Latin American public and private investment in research and development lags behind OECD countries and emerging Asian economic powers. Latin America spends on average 0.3 percent of GDP on R&D, two percentage points below the OECD average (2.33 percent).*
- Boost innovation by enhancing formal education and linking universities, the business sector and other stakeholders. Spending on education in Latin America is lower than the OECD average and students rank poorly in PISA scores.**
Though 75% of companies consider qualified staff essential to their innovation activities, only in one out of five surveyed companies had half of the staff attended university or technical schools. - Use information systems to monitor and assess innovation policies. The report gives 50 case studies of innovative leadership and projects. For example, innovative ICT– particularly mobile technologies – is collecting and disseminating data, accessing resources from around the world, and connecting rural and low-income communities to better opportunities for growth and development.
Latin America is becoming the source of new forms of innovation that will be imported by the more advanced economies. In fact, according to José María Álvarez-Pallete, chairman of Telefónica Latinoamérica, ‘In the present decade we will see emerging regions introducing to the world more and more of their innovations, which are the result of the application of their creativity to the social and technological challenges they face.’
