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Advancing innovation may advance Latin America's economies, Part 2


Regional trends for innovation ecosystems in Latin America

In part 1, Advancing innovation may advance Latin America’s economies, we were able to: present an introduction to key resources that help us gauge the innovation landscape; broadly look into major economies in Latin America and innovation approaches in each; and then we reviewed into the mechanisms (inputs and outputs) for creating a scalable innovation ecosystem.

In part 2, we explore The Global Innovation Index 2017 (GII), searching for data which could support a strategic approach to enhancing innovation from a selection of major economies in Latin America. As a data-rich resource, the GII presents unique opportunities for establishing contrasts and comparisons amongst countries. The report’s scoring system, based upon innovation ecosystem inputs and outputs, allows us to hone in on specific innovation mechanisms, thus providing an opportunity for analysis and recommendation at country, regional, and international levels.


Establishing regional trends

If we take into account the respective input and output scoring for ecosystem innovation, we can apply some fundamental statistics to better recognize trends in the context of major Latin American economies.

In the table below: Latin America Key Economy Innovation Scoring by Standard Deviation, we’ve presented the respective input and output scoring for the top 5 Latin American economies (by GDP), and alongside have presented the (1) standard deviation and (2) average of the topline scoring for each category. We are looking to identify recognizable regional trends and, in turn, offer suggestions for respective innovation ecosystem enhancement.


Latin America Key Economy Innovation Scoring by Standard Deviation

IP System

Ecosystem Category

Argentina

Brazil

Chile

Colombia

Mexico

Standard Deviation

Average

Inputs

Institutions

46.4

51.8

70.3

58.5

58.5

8.95

57.1

Human capital & research

42.6

35.9

32.8

31.7

33.7

4.34

35.34

Infrastructure

46.6

48.3

52.1

52.5

49.7

2.50

49.84

Market Sophistication

37.7

44.2

49.8

53.1

50

6.09

46.96

Business Sophistication

33.6

37.2

36.5

32.9

30.8

2.64

34.2

Outputs

Knowledge &  Technology Outputs

17.6

18.9

26

19.1

21.5

3.32

20.62

Creative Outputs

27.6

26.6

32.1

28.6

32.6

2.70

29.5

 
Drawing meaningful conclusions

Using this statistical approach, we can recognize several trends, including:

  1. The largest standard deviation (8.95) amongst countries is for “Institution Inputs”;
  2. The smallest standard deviation (2.50) is for “Infrastructure Inputs”;
  3. The comparative averages on both “Output” metrics are low.

The data may be interpreted to show that “Institutional Inputs” are varied in the region. This is particularly apparent when looking at the “Institutions” data points for Argentina and Chile. When looking at the sub-sections that constitute “Institution”, Argentina is cited as displaying weaknesses in “Regulatory Environment” and “Business Environment”. On the other hand, Chile is considered markedly strong in both “Regulatory Quality” (ranked 18th out of 127 countries) and “Rule of Law” (ranked 22nd out of 127 countries).

The “Infrastructure” considerations include measures for Information & Communication Technologies, General Infrastructure (i.e. electricity output, gross capital formation as %GDP), and Ecological Sustainability. Several of the top 5 economies reveal strong marks in respective “Infrastructure” categories. Brazil leads in “Infrastructure” categories such as, “Government’s online service” (ranked 37th out of 127 countries); Mexico shows strength in “Government’s online service” as well (ranked 19th out of 127 countries); and Colombia shows strength in “Ecological Sustainability”.

Identifying opportunities

Despite these aforementioned input-based strengths, the lower ranked “Output” measures provide insight into the full spectrum of opportunities to spur innovation in Latin America’s largest economies. The space for opportunity becomes more obvious when we look at the GII’s “Innovation Efficiency Metric” for LATAM’s major economies—a theme we will explore in part 3 of this series.

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