Why Innovation Matters to Latin America

Instituto de Ciencia Politica For middle-income countries looking to move up the economic value-chain and graduate to high-income status, innovation will be key. Knowledge-based industries from life sciences to film form the basis of economic growth in most OECD countries, their growth and investment encouraged by a strong framework of intellectual property rights.

Latin American countries such as Colombia hold much promise due to their biodiversity, good science base and entrepreneurial citizens. Yet there is scepticism in policymaking circles in Colombia and elsewhere in Latin America about the potential of innovation, and role of intellectual property rights, in particular in debates about public health.

This was the backdrop to a one day dialogue of international think tanks on innovation, trade and health, convened by Geneva Network and co-hosted by the Instituto de Ciencia Politica, in Bogota, Colombia.

Thinkers and experts from thirteen international, pro-market think tanks came together to give their perspectives on these important issues. Represented organisations included Libertad y Progreso (Argentina), MacDonald-Laurier Institute (Canada), Libertad y Desarrollo (Chile), Fundacion Eleutra (Honduras), Bennet University (India), Competere (Italy), Information Technology and Innovation Foundation (USA) and the European Centre for International Political Economy.

Among the conclusions of the day:

  • Latin America will need to prioritise innovation if it is to meet its social, demographic and economic challenges.
  • In an era of globalization in which knowledge-based industries form the bedrock of the most successful economies, intellectual property rights (IPRs) must be considered as fundamental market institutions, alongside physical property rights and the rule of law. By contrast, government attempts to co-opt IPRs through for example compulsory licenses create enormous uncertainty for domestic and international investors.
  • Strengthening domestic intellectual property rights is often viewed as a “cost” of trading with wealthier countries, to be resisted or watered-down. It is, in fact, necessary to meaningfully participate in an increasingly knowledge-based global economy.
  • As knowledge-based goods and services are an increasingly important component of global trade, policymakers should look to the trading system to create a level playing field and high standards of protection.

Clearly, enormous challenges remain if Latin American countries are to become more innovative and participate more meaningfully in global value chains and international innovation networks. But the opportunity is there: it is up to the current generation of policymakers to seize it.