Innovation can help Latin America grow its economy, raise productivity, increase trade and improve the lives of its people.
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.
*Innovalatino: figure 1.8. Source: Main Science and Technology Indicators (2010-2), OECD Statistics; World Bank, World Development Indicators.
**Source: PISA 2009, OECD
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.’
For additional information:
To download the full report and access strategic recommendations for national governments in the region, please visit www.innovalatino.org
About the OECD Development Centre
The Development Centre (DEV, www.oecd.org/dev) helps policy makers in OECD and partner countries find innovative solutions to the global challenges of development and poverty alleviation. It is a unique institution within the OECD and the international community, where the governments of Member and partner countries, enterprises and civil society organisations discuss questions of common interest informally.
About Fundación Telefónica
Fundación Telefónica drives social and cultural development, aimed at facilitating access to knowledge, from an innovative, integrated and global management to improve the lives of individuals. Fundación has a presence in 19 countries of Latin America and Europe and its work is developed through five programmes: EducaRed that promotes the improvement of education quality through the incorporation of ICTs into teaching models; Debate and Knowledge that disseminates awareness about the impact of ICTs on the improvement of society; Proniño that contributes to the eradication of child labour in Latin America through access to quality education; Youth supports this group of society in their transition to an independent, responsible adulthood and Art and Technology encourages access to culture and fosters artistic creativity through the use of ICTs. These 5 transnational programmes interact with each other in search of synergies and that share a strategic focus on accessing knowledge and the application of Information and Communications Technologies (ICTs).
