There is high heterogeneity among countries in Latin America in regard to the institutional framework for innovation and its place in the government power structure. Only five countries have a Ministry of Innovation: Argentina, Brazil, Costa Rica, Cuba and the Bolivarian Republic of Venezuela. In other countries different models prevail: national innovation councils directly under the presidency, as in Chile and Nicaragua, for example; or national councils under different ministries (usually the ministry of industry or education), as in Mexico or Peru. 

There are different institutional models, which vary in terms of level of complexity and frequency of contact among different actors. Brazil has the most complex institutional system. The Brazilian Ministry of Science and Technology has an influential and co-ordinating role in defining strategy and execution, together with the Ministry of Development, Industry and Foreign Trade and the Brazilian Development Bank (BNDES). In addition, various agencies are responsible for programme implementation and funding, such as the Brazilian Innovation Agency (FINEP), which offers funds for business innovation programmes, and the National Research Council (CNPq), which funds scientific R&D programmes. Brazil also has a well-articulated governance structure, albeit with significant differences across the country, in which across levels of government each State has its own foundation for R&D support. Other countries in the region have simpler models, some more decentralised (e.g. Mexico) than others (e.g. Chile). 

Beyond country differences, a common element is that innovation is a priority of the development agendas of almost all of the countries in the region, although its importance is reflected in the debates that take place than in increased levels of budgetary allocation. The greatest challenge is to design and implement innovation policies that on the one hand support structural change, the diversification of production and the creation of new sectors, and on the other hand promote the modernisation and competitiveness of traditional sectors. 

In addition, some structural weaknesses continue to hinder the formulation of innovation policies and to hamper the transition towards more pragmatic and effective policy models. For innovation policy to be effective it needs real financial support. For example, recent advances in Uruguay in terms of institutionalisation and promotion of innovation have taken place thanks to the Ministry of Economy and Finance’s support to the country’s national innovation strategy. 

Weaknesses in the design of policy instruments include: i) poor planning capacity and a tendency to allocate resources based on short-term evaluations, ii) little capacity to monitor and evaluate implemented programmes, iii) insufficient feedback mechanisms between design and implementation; and iv) an excessive focus on “inputs” (more R&D, more qualified human resources, etc.) rather than on expected outputs (growing number of export firms, more and better jobs, introduction of new production processes and/or services, etc.). There has also been little synchronisation between productive developmentand innovation policy, although this trend has been changing in recent years insome countries, in part thanks to the introduction of sectoral funds in support ofinnovation. 

In recent years, countries in the region have prioritised a series of reforms inthe governance and management of innovation policy in order to strengthen thestate’s capacity to support innovation in the new global economic situation. Mostcountries have established new institutions and/or new governance models for theformulation of innovation strategies. For example, in Argentina, the establishmentof the Ministry of Science, Technology and Productive Innovation in 2008 responded to the desire to promote productive development and innovation and to increase the collaboration between science andbusiness. In Chile, the creation of the NationalInnovation Council for Competitiveness has been a major advance in enabling institutions, through the Committee of Ministers for Innovation, to make innovation

a key issue in the government agenda.

The growing demand for the formulation of innovation strategies has created a need for new spaces for vertical and horizontal co-ordination. In fact, innovationis increasingly a cross-cutting issue in the agendas of different sectoral ministries(such as health, energy, the environment and education), beyond its traditionalrole for development in agriculture and manufacturing.There is an increasing need for more coordination between different sectoralagendas (of the various ministries) to increase the effectiveness of public action.This also augments the complexity of managing innovation policies, since variousvisions and conceptualisations of innovation clash, requiring different publicpolicytools. 

Brazil has responded to these challenges by creating co-ordination mechanisms between innovation policy and productive development policy. In this regard, the partnership between the Ministry of Science and Technology, Ministryof Development, Industry and Foreign Trade and the Brazilian Development Bank(BNDES) is a clear advance in institutional design. At the same time, in line withthe recent national strategy for growth with social inclusion, the Ministry of Sciencen and Technology hasn supported the strengthening of institutions in Brazil’s federalstates in order to promote production structure diversification and to increase thecountry’s scientific, technological and productive strength.

Box 6.1. New Governance Models for Formulation of Strategies in the Region: Brief Review on the Experience of Argentina, Brazil, Chile & Mexico

Box 6.1. New Governance Models for Formulation of Strategies in the Region: Brief Review on the Experience of Argentina, Brazil, Chile & Mexico

Argentina stands out for its long history of public efforts supporting capacities in the field of science. These efforts go back to the early 1950s, when the country invested in the establishment of public research institutes, such as the National Commission for Atomic Energy (CNEA), the National Institute for Agricultural Technology (INTA ), the National Institute for Industrial Technology (INTI), and the National Council for Scientific and Technological Research (CONICET). Recently, the country has invested in the creation of a new governance model for public policy. The measures taken to facilitate the articulation and vertical and horizontal co-ordination of policy include: 

  • The creation of the Ministry of Science, Technology and Productive Innovation (2008), which is responsible for formulating policies and programmes and for supervising the bodies responsible for the promotion, regulation and enforcement of policies (the National Agency for the Promotion of Science and Technology [ANPCyT] and CONICET).
  • The creation of the Science and Technology Cabinet (GACTEC) and the Inter-Institutional Council for Science and Technology (CICyT) as policy–co-ordination bodies.
  • The consolidation of the administration of scientific research grants (CONCYT) and business innovation (FONTAR ) under a single agency.

In Brazil the National Science and Technology Council (CCT) is the body responsible for strategic formulation and co-ordination in the field of science, technology and innovation and reports directly to the President of the Republic. The CCT has the following tasks: proposing a science and technology policy for the country; developing plans, goals and priorities; conducting assessments; and issuing opinions on specific issues under their purview. The Council is composed of the government ministers responsible for this area, who represent the science and technology community (universities, institutes, regions) and business representatives. It is chaired by the President, and the Minister of Science and Technology is the Executive Secretary.

The Ministry of Science and Technology is in turn responsible for implementing the science and technology policy. The operating arms for the implementation of innovation policies are the National Council for Scientific and Technological Development (CNPq), aimed at developing scientific and technological research, especially through scholarships and grants, and the Financier of Studies and Projects (FINEP), which supports the science, technology and innovation actions of public and private institutions. Additional key players are: the Coordination for the Improvement of Higher-Level Personnel (CAPES), which supports post-graduate studies, and the Brazilian Development Bank (BNDES), linked to the Ministry of Development, Industry and Foreign Trade (MDIC), which provides long-term financing for projects that contribute to national development (including support for seed and venture capital initiatives and direct financing of innovation projects).

There are numerous state foundations and public technology institutes carrying out research and development activities and providing technology services, in addition to public enterprises carrying out research and development in frontier areas (Petrobras, Embrapa, etc.).

In Chile, the National Innovation Council for Competitiveness (CNIC), established in 2005, formulates medium-term strategy and counts on academic and business sectors in defining and accomplishing its mission.

Inter-sectoral co-ordination is ensured by the Committee of Ministers (CM), chaired by the Minister of Economy, and comprised of the ministers responsible for areas related to innovation, specialists and representatives of the private sector and academia. The CM administers the National Innovation Fund for Competitiveness (FIC), with royalties from copper mining, and contracts specialised agencies (CONICYT and CORFO, among others) for the implementation of priority programmes.

The system of policy governance that is evolving is based on two pillars: the Ministry of Economy (in charge of business innovation) and the Ministry of Education (in charge of higher education and basic research).

The creation of the CNIC and the CM has made it possible to move forward in the design of strategies and prioritisation mechanisms and create incentives for generating institutional capacities for analysis and evaluation of innovation policy. Progress has also been made in establishing, albeit tentatively, mechanisms for alignment between budget and expenditure on innovation, and in the design of instruments to support targeted rather than horizontal (clusters) innovation. The system still has a number of structural weaknesses that require institutional modernisation, including the CNIC’s weak capacity to engage and generate commitments from the private sector and its poor alignment with the Ministry of Finance (Budget Office) in prioritising expenditures.

In Mexico, the National Council on Science and Technology (CONACYT) is an advisory body to the federal government specialising in the articulation of public policies by the federal government. It promotes research in science and technology, innovation and development, and the technological modernisation of the country. 

CONACYT is the leading body for the strategic management of innovation policy. The Council has introduced sectoral funds to support innovation, highlighting its commitment to increase this support. The Council has a well-developed structure with offices in every state with experience in the mobilisation of local actors to promote business competitiveness. Its tasks include promoting basic and applied research, managing training programmes to develop qualified human resources and fostering productive innovation.

In Mexico, there are also state councils for science and technology, which work in collaboration with the federal level through the National Conference on Science and Technology. Mexico also has a group of research centres co-ordinated by CONACYT to add to the work conducted by public universities. This collaboration is further complemented by a group of providers of science and technology services, which also act as a link between companies and technology institutes (providing information, consulting and training), such as the Information and Documentation Fund for Industry (INFOTEC ) and the National Processing Industry Chamber (Canacintra).

Source: OECD (2011).