Fernando Santiago

Innovation for inclusive development

Conventional wisdom places the dynamics of innovation almost in the exclusive realm of firms from developed countries. However, over the past two decades economic growth in many developing countries has been spurred by substantial investments in science, technology and innovation. Innovation in particular is identified as one of the key factors that explain sustained economic growth and prosperity – or the lack of it – in developing countries (Chandra et al. 2009). Innovation has been helpful for a select group of developing countries to ‘graduate’ to middle-income status by increasing competitiveness, growth and wealth. Accordingly, there has been substantial interest towards enhancing our understanding of the factors that have assisted in the economic transformation of some developing countries. At the same time, ‘successful’ developing countries remain hosts of extreme poverty, malnutrition, high infant mortality rates and stagnant or declining life expectancy rates along with other poverty-related challenges. Developing countries continue to experience inequalities at different levels with the exclusion of a considerable section of local population from development opportunities – while many have prospered, a billion of the world’s poorest people now live in middleincome countries (The Guardian 2010). The challenges associated with abject poverty and inequalities worsen in the case of least developed countries where economic structures continue to depend heavily on primary sectors and the production of commodities. Natural resources-based industries, cultural industries and services are examples of – often informally organized – economic activities from which millions derive their livelihoods in developing countries. A dual economic structure persists where informal economic activities continue to remain as the main source of employment creation and income, particularly for women and the youth. Recent contributions to the literature, from management to economics and development studies, suggest that while innovation could help addressing the poverty challenges, innovations that emerge from formal scientific, technological and productive structures and organizations rarely address the needs of the poor (Kaplinsky 2010; The STEPS Centre 2010; UNDP 2010). The expected trickle-down redistributive effects and corresponding improvements in prosperity and wealth associated with innovation are neither immediate nor automatic. A growing body of research, often carried out in conjunction with development practitioners, sheds light on the so far poorly understood innovative activities that take place in the broad and growing informal settings in developing countries (HoneyBee network). Informality is usually linked to poverty, low levels of skills, capital and organizational capacities, small scale of operations, labour-intensive production with outdated technology and

Determinants of innovation and productivity in the service sector in mexico

Abstract Drawing on survey data about firms in Mexico, we investigate the determinants of innovation and the linkages between innovation and productivity in the services sector. We apply a three-stage Crépon-Duguet-Mairesse (CDM) econometric model; the use of manufacturing firms as a benchmark helps to better appreciate our findings. We find that a series of structural, performance, and behavioral factors increase a firm’s propensity to invest in innovation, but some differences arise between services and manufacturing firms. Intensive investment in innovation leads to superior innovation performance, while innovation output has a positive effect on labor productivity.

What hinders innovation performance of services and manufacturing firms in Mexico

ABSTRACT Barriers to innovation are heterogeneous, of financial and non-financial nature. The importance of barriers to innovation and their actual influence on innovation depend on firms’ characteristics such as sectoral affiliation, technological behavior and their response to perceived obstacles to innovation. Firms either continue to engage in innovation, or they avoid the activity altogether. This paper explored the nature and perceived importance of the obstacles to innovation that firms confront, in a developing-country context; we build on survey data about firms in Mexico. Our findings suggest that two kinds of policy interventions should help offset a firm’s perception of barriers to innovation. On the one hand, policies should enhance the innovation capacity of firms interested in innovation; on the other hand, policies need to tackle factors that reduce the interest of firms in innovation. Policies that boost demand for locally generated innovations would assist in achieving both these goals.

The Changing Role of Science, Technology and Innovation Policy in Building Systems of Innovation: The Case of Mexico

Latin American countries still account for most of the world’s social challenges: extreme poverty, malnutrition, high infant mortality, low life expectancy and a decline in schooling quality indicators. For many countries, Mexico included, a number of these problems can be traced to income inequality, a low-qualified workforce, increasing presence of informal sectors and the dominance of economic structures heavily dependent on low-intensive technological sectors. Limited investment in science, technology and innovation (STI) also remains a salient feature of these economies. In this regard, a growing stream of literature has drawn attention for linking STI to broader economic and developmental agendas (Kraemer-Mbula and Wamae in Innovation and the Development Agenda, OECD, Paris, p. 152, 2010; Gault, Innovation Strategies for a Global Economy, Edward Elgar, Cheltenham, p. 232, 2010; STEPS, Innovation, Sustainability, Development: A New Manifesto, The STEPS Centre, Brighton, p. 24, 2010). In many instances, the bid is for the review and renewal of the relationship between STI activities and the overall social and economic dynamics of countries (Azzazy, Science, 333(6040):278–284, 2011; Cozzens and Sutz, Innovation in Informal Settings: A Research Agenda, p. 53, 2012). From the National Innovation System (NIS) perspective (Freeman 1987; Lundvall 1992, 2003; Nelson 1993; Edquist 1997, 2006), STI policy has been crucial as a means for development and consolidation of NIS’s agents both in academia and the productive sector, as well as in incentivizing a dynamic interaction between them. Likewise, important for STI policy is to promote and sustain the creation, dissemination and use of knowledge as an interactive, self-reinforcing mechanism guiding the generation of STI capacities, the operation of and governance of the STI system and its correspondence with the dynamics of social and economic systems. Public policy in general and STI policy in particular shape and reshape the institutional framework in which the system’s agents perform, and at the same time, the institutional framework sets some boundaries to the unfolding of public intervention. This chapter analyses how public policies have contributed, or not, to the building and nurturing the Mexican System of Innovation, and how the emergent system feedbacks the design, tailoring and implementation of STI policies in Mexico. We also consider the institutional environment in which the NIS performs, the mechanisms governing public funding, as well as the configuration of the policy mix, as a fundamental part of the public action that seeks to influence the social and economic dynamics of the country. The analysis is focused on how the policies, the system and the institutional environment have co-evolved since the 1940s.

How Human Resource Management Practices Contribute to Learning for Pharmaceutical Innovation in Mexico: Drawing From Internal and External Sources of Knowledge

ABSTRACT How and why do human resource management practices contribute to learning for innovation? Based on evidence from the Mexican pharmaceutical industry, we found that the influence of human resource management strategies on learning processes is more perceptible as learning becomes more exploratory in nature. The provision of training and, to a lesser extent, worker empowerment and the regulation of hiring practices underpin learning for pharmaceutical innovation. However, the influence of firms characteristics on the adoption of strategies to learn from internal and external sources of knowledge tends to outweigh that of the human resources management practices of the firm.