Innovation Systems in Latin America: Examples from Honduras, Nicaragua and Bolivia

Report, 2005

The main purpose of the study was to identify and analyze the current status of local innovation and cluster activities in three Latin American countries, Bolivia, Honduras and Nicaragua. This included the goals to identify key stakeholders active in innovation and to analyze the relationships between the various stakeholder and cluster groups. More specifically we were also interested in analyzing the university’s role in innovation activities. Finally, our aim was to identify supports and hinders to innovation activities and the emergence of innovation clusters. The cluster model (based on Sölvell et al. 2003) that was used for analysis was a good starting point – but not sufficient. We needed to adjust and adapt it during our research process and had to add 4 key stakeholders which were missing: Unions; Aid community; Development banks; and Indigenous communities. Using our interview data from Bolivia, Honduras and Nicaragua for the analysis, it was found that there were many similarities across the three countries. There is limited sharing of research results and lack of diffusion of competence, learning and know-how. There is a lack of research culture (incentives, funding) and research and science is not on the national agenda or connected to industry. Limited resources, risk avoidance and low esteem in locally grown inhibit local innovation and entrepreneurship. Intellectual property rights (IPR) are poorly developed and lack links to business development. Public universities have most of the state research money as well as money from donors but have very limited contact with industry and there is a lack of trust. Some great examples of research being conducted were identified where financing for research and advanced degrees had been provided by international donor organisations. However, the researchers act as islands so research is not visible even internally at the universities. There is a lack of research culture where teachers have no time for research, and promotion/prestige does not value research. The research that exists is not linked to the market and there is no commercialization of research. Private universities are a recent phenomenon, during the last 10 years, primarily focused on education and typically with excellent contacts with industry, but with a few exceptions, without any research tradition. A few examples of well-functioning and market driven research institutes were identified. Industry is in general not making innovation and do not budget for innovation and R & D activities, although we found good examples of innovative activities in all three countries - primarily in organisation innovation and product innovation. Government policies and institutions for Innovation, Science and Technology are either non-existent or weak. Some innovative approaches were identified, e.g. in bidding system to link suppliers and producers in agro business (Bolivia), financing innovation in SMEs and support to cluster development (Nicaragua) and financing of micro businesses (Bolivia, Nicaragua). In the financial sector, traditional banks do not support SMEs and do not give loans for innovation. Instead, international donor agencies are important actors when it comes to financing, but they have their own agendas, which do not necessarily coincide with National goals. Various types of organizations, including NGOs, perform the role of linking organizations and the services provided can include financing which make them a stronger player. Laws and regulations are sometimes creating disincentives for local entrepreneurs, for example tax incentives for foreign investment, Tax free zones create islands of industry, without interaction with the local business or society. The Intellectual Property systems are weak with limited capacity to evaluate intellectual assets, mainly foreigners (90%) apply for patents and universities offer no courses or information to students or teachers on IP and IP processes. The above study provided input for an action learning project with the main goal of introducing and developing a process that will increase awareness, cooperation and debate on the role and opportunity that ‘innovation clusters’ may have in the development of innovations. A sub-goal was to increase the connectivity between the key stakeholders active in innovation activities both locally in within the wider region. As part of this action learning project various stakeholders were invited to meet and discuss the preliminary findings in a workshop at the end of our visit to each of the Latin American countries. Finally, a group of stakeholders from each country were invited to participate in the 7th Global Innovation Cluster Conference in Ottawa, Canada.