Ezequiel Tacsir

Innovation dynamics and productivity : evidence for Latin America

Innovation is fundamental for economic catching-up and raising living standards. Evidence demonstrate a virtuous circle in which RD spending, innovation, productivity, and per capita income mutually reinforce each other and lead to long-term, sustained growth rates and may foster job creation. Previous evidence highlights that Latin America and the Caribbean LAC has great potential to benefit from investment and policies that foster innovation. However, one important limitation of previous research on innovation in LAC is the absence of harmonised and comparable indicators across the different countries. This seriously limits the possibility to infer policy conclusions that are not affected by country specificities with respect to data quality and coverage. Also, most of this research is focused on estimating firm level correlations without attempting to identify market failures or other limitations which harm innovation investment or which could guide policy. In this paper, a wide range of innovation indicators are analysed in order to describe the innovation behaviour of manufacturing firms in LAC using the Enterprise Survey ES database. Our objective is to understand the main characteristics of innovative firms in LAC and to gather new evidence with regard to the nature of the innovation process in the region. In this paper we apply a structural model based on Crepon, Duget and Mairesse 1998, to estimate the determinants of innovation RD and its impact on total factor productivity. We pay special attention to whether there is heterogeneity in the effects of investments in innovation on productivity and whether there is any evidence of spillovers that could guide policy design. We found strong evidence concerning the relationships between innovation input and output, and innovation output and productivity. We found that private returns to innovation depend on the type of innovation, being larger for product than process innovation. Furthermore, we found some evidence that spillovers are stronger in the case of product than process innovation. It was also found that innovation returns are higher for the most productive firms. This increasing relationship between returns and productivity is not consistent with an interpretation that financial constraints cause more harm to low productivity firms. However, it is consistent with alternative interpretations about the lack of innovation opportunities in the case of low productivity firms or that low private returns are the results of poor appropriability.

Policy Coordination: From FDI to a Broader Framework to Promote Innovation—The Case of Costa Rica

In recent decades, Costa Rica viewed FDI attraction as a strategic option to sustain growth, promote structural change, and create better jobs. The successful record of FDI investment in the country fostered profound changes in the country’s trade specialization, inducing derived demands for new and better skills in the population and wider availability of entrepreneurial and technical capabilities in specific industrial clusters. In fact, labor mobility from global to domestic firms has had a positive impact on rate of creation and survival of knowledge-intensive firms in the country (Monge-Gonzalez 2012). However, the linkages between local and foreign companies in Costa Rica are still weak, and RD Crespi, Nota Tecnica sobre el Sistema de Innovacion en Costa Rica. IDB Technical Note, 2010). In this scenario, Costa Rica, joining an emerging world trend, has been shifting gradually toward a more selective policy approach to FDI by targeting certain knowledge-intensive sectors, while some global firms have recently moved toward more sophisticated activities in the country. In fact, the private sector concentrates slightly more than 2,000 employees working on R&D, out of 6,000 that the country totals. The success of this new endeavor will depend on the coordination and the capacity to “activate” OCDE (Attracting Knowledge-Intensive FDI to Costa Rica: Challenges and Policy Options, OECD Development Centre, Making Development Happen Series No. 1, Paris, 2012) government policies beyond investment promotion, per se. Public institutions like CINDE have earned a reputation for their success in attracting high-tech FDI and coordination capabilities across the public sector and timely response to specific private demands. Similarly, the more recent creation of the Presidential Council for Competitiveness and Innovation (PCCI) in 2010 aims at improving the governance of this new approach to development, through the coordination of the needed policies. The contribution of this chapter is twofold. First, it will discuss to what extent the national policies and institutions have so far contributed to promote the exhibited upgrading of local operations. Second, it will describe the current efforts to move to a wider development strategy, where the focus is on knowledge-intensive activities and innovation.

Evaluación de corto plazo del Programa Nacional de Incentivo a los Investigadores (PRONII) de Paraguay

El presente articulo presenta los resultados de una evaluacion de impacto de muy corto plazo del Programa Nacional de Incentivo a los Investigadores (PRONII) de Paraguay en su edicion 2011. Para dicho objetivo, se emplean tecnicas cualitativas, las que se complementan con el reporte de resultados a partir de tecnicas cuantitativas estandares, que fueron analizados en mas detalle en otro documento. El analisis cualitativo destaca el hecho de que los investigadores consideran que hay una mayor produccion academica luego de la implementacion del programa, asociada a la posibilidad de dedicar mas tiempo a la investigacion. Los entrevistados concuerdan con que el PRONII estaria permitiendo generar bases para hacer investigacion de mejor calidad, y permitir el desarrollo y consolidacion de lineas de investigacion. Por otra parte senalan que la formalizacion de la carrera de investigador mediante el establecimiento de un sistema de jerarquias objetivamente ordenado en relacion a la produccion cientifica, ha generado un mayor reconocimiento social a la tarea. En el debe se apunta que el mecanismo de evaluacion y los criterios utilizados por el PRONII aun no han permeado lo suficiente en los sistemas de evaluacion y promocion de investigadores de las universidades. El analisis de impacto cuantitativo identifica un mayor impacto positivo del sistema sobre los investigadores Nivel I. Para los demas niveles, los impactos positivos son muy puntuales, esto en parte se puede deber al corto plazo transcurrido desde el comienzo del programa.