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Executive Summary

The first edition of the Signs of Competitiveness in the Americas (SCA) Report is the result of collaboration between Competitiveness Authorities and Councils of the Americas and the institutions that support the work of the Inter- American Competitiveness Network (RIAC). It contains two main sections, one offering a broad view of innovation, and the challenges and opportunities we face as a region; and another that includes more than fifty country and institutional experiences related to the ten general principles of competitiveness.

The Decalogue on Competitiveness is part of the Consensus of Santo Domingo approved by representatives from more than thirty countries in October 2011, during the Annual Meeting of the RIAC. The Meeting was held in the framework of the V Americas Competitiveness Forum (ACF) in the Dominican Republic and adopted the Consensus and its principles as a central element of the 2020 vision for the Americas.

At the beginning of its term, the Ministry of Trade, Industry, and Tourism of Colombia, as the Chair Pro Tempore of the RIAC and host of the ACF, selected the principle of innovation as a priority and declared 2012 the “Year of Innovation of the Americas.” As such, the institutions that support the work of the RIAC and other collaborators have made special contributions to the report, most of them focusing on the central subject of the VI Americas Competitiveness Forum: “Innovation for Prosperity”

The section on “Innovation in the Americas” in the SCA Report includes a general overview of the landscape of innovation in the Americas, with an evaluation of the region’s main strengths and weaknesses to remain competitive vis-à-vis the rest of the world.

The research piece by the Inter-American Development Bank (IDB) indicates that the countries of Latin America and the Caribbean (LAC) continue to lag behind in terms of scientific, technological and innovative capacities. Factors in the creation of innovation, such as investing in Research and Development, private sector involvement in the system of innovation, human capital, scientific publications, patents, and the use of Information and Communication Technologies (ICTs), do not correspond to the size of the countries’ economies or the level of income of their populations. Nevertheless, innovation is recognized as a fundamental component for long-term economic development and a key factor to improve the quality of life of citizens in the Americas. On the other hand, the IDB suggests that innovation also plays an important role in addressing issues on the social agenda. While the countries of LAC simultaneously face global challenges (such as climate change, access to energy, food security) and national concerns (reducing poverty, facing inequality, and low productivity), innovation can play an important role in defining the road ahead.

To support the efforts of the countries of Latin America and the Caribbean to promote innovation, the diversification of their economies, and achieve long-term sustainable development and inclusive economic growth, the Economic Commission for Latin America and the Caribbean (ECLAC) offers a summary of seven fundamental challenges for the region. Among them are a broadening of the productivity gap between Latin America and developed countries, the high concentration of economic sectors based on raw materials, the need to diversify the economy toward activities of medium and high technology, training and incentive-led improvement of skills to benefit the quality of the workforce, low levels of public and private investment in Research and Development, and the limited patenting activity by residents in a majority of countries of LAC. As ECLAC has indicated, these challenges invite countries to prioritize and update public policies and institutional capacities to support innovation and assign a budget to implement them.

The Central American Bank for Economic Integration (CABEI) presents a diagnosis of entrepreneurship in Central America, noting that the countries of the region have not yet exploited their creative and innovative capacity. Support programs for SMEs are more directed to subsistence ventures and not to the development of innovative opportunities in the markets. It establishes that entrepreneurship must be a fundamental axis in the development policies of every one of the countries and recommends programs on incubation, entrepreneurship, seed capital funds, and tax incentives.

The study prepared by Oxford Economics for the OAS notes that given the high degree of urbanization in Latin America and the Caribbean, cities are in effect drivers of innovation in their respective countries. It highlights the five immediate challenges to becoming world-class centers of innovation: (1) develop creative people, (2) deploy innovative governance, (3) encourage innovative companies, (4) foster innovation in firms, and (5) support innovation hubs and hotbeds. It estimates that the innovation premium for cities—that is, the additional economic dividend they gain from their investments — is 42%, in addition to a considerable increase in job creation.

The section on innovation also includes interviews with distinguished experts and personalities from the world of creativity and entrepreneurship that bring their ideas to the Americas Competitiveness Forum. Professor Clayton Christensen of the Harvard Business School, award-winning author on innovation and economic growth, shares his ideas on disruptive innovation and the necessary environment for developing world-class innovation centers in Latin America and the Caribbean. Professor Vijay Govindarajan, renowned international expert on strategy and innovation, discusses the concept of reverse innovation and notes that it is possible to develop innovation with a global impact in developing countries. Doctor Cardinal Warde, world leader in optical systems, MIT Professor and Founding President of the Caribbean Science Foundation, shares his view on the need to promote science and technology as a fundamental element for economic development and the role of the Diaspora in this process. Doctor Bhoendradatt Tewarie, Minister of Planning and Sustainable Development of Trinidad and Tobago, with a long trajectory of promoting competitiveness in the Caribbean, presents his perspective on the creative industries and their potential to contribute to the economic developmen of Trinidad and Tobago and the Caribbean.

The final part of the section on Innovation contains a contribution by the Global Federation of Competitiveness Councils (GFCC), describing best practices and case studies that are disseminated from the private sector through Competitiveness Councils around the world.

The International Intellectual Property Institute (IIPI) discusses the principal challenges to making the most of intellectual property rights to improve competitiveness.

Other RIAC institutions have contributed experiences on best practices that are incorporated into the profiles of programs that RIAC countries have selected and that are described in the second section of this Report. The CAF, the Development Bank of Latin America, shares its Competitive Cities Program in Cuenca, Ecuador, and Barranquilla, Colombia, cities in which, based on productive development strategies and public-private partnerships, significant progress is achieved on innovation and entrepreneurship. The Compete Caribbean Program describes its experience in the design of a coordination effort between donors to address priorities on matters of competitiveness in the Caribbean, and the important results it has achieved to date. The Monterrey TEC presents its methodology and experience in measuring subnational competitiveness and the formulation of local competitiveness agendas to define priorities and promote regional development. CIFAL highlights model practices on matters of education in science, technology, engineering and mathematics. These last contributions are available in the complete version of the Signs of Competitiveness in the Americas Report at the online RIAC Observatory.

The section on “Experiences in the Americas” of this Report offers a general summary of the initiatives developed by Barbados, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Jamaica, Mexico, Panama, Peru, Suriname, Trinidad and Tobago, United States, Uruguay, the Development Bank of Latin America– CAF, and the Compete Caribbean Program. The experiences shared are related to the ten general competitiveness principles, in particular to issues regarding the strengthening of institutions; the promotion of simple, stable, and efficient regulatory frameworks; high-level innovation and entrepreneurship; the use of information and communication technologies; the importance of improving access to capital, especially for micro, small, and medium enterprises.

In general, the content summary of every experience makes reference to its principal objective, relevance, results, and it highlights the concrete opportunities for collaboration that exist with other Members of the RIAC. Each summary indicates what the different institutions can offer (for example: information sharing, technical assistance, or experts); and what would be desirable from other countries (for example: knowledge about similar experiences, successful methodologies that add and/or complement program components, etc.). This process seeks to increase the impact of the projects in each country and give joint feedback on the work and mechanisms that ensure their success.