Business Innovation: Essential requirement for growth
A competitive environment generates incentives for innovation.
The competitive environment and open markets are very important incentives in business innovation processes. While not excluding other factors are: policies that promote growth and increase productivity through the generation and adoption of new technologies. According to international standards, when measuring business innovation, Colombia is located at Place 128 between 144 countries. Meanwhile, in the environment favorable to the competition of market Colombia is located in the position 136 of 144 countries.
Low investment in research and development (R & D) affects growth potential. The R & D expenditure is 0.22 of GDP, below the LAC average, which is located at 0.75 and the OCDE average, which is 2.36.
The participation of the private sector in R & D financing reaches about 30. What is insufficient if compared to more advanced countries and the frontier of knowledge, where the participation of companies exceeds 60 (eg. Finland, Korea, Israel).
For its level of development, the availability of qualified human capital for R & D is insufficient in Colombia. Colombia has 346 researchers per million inhabitants, compared to 4.712 from Spain, 1.514 from Argentina, and 872 from Brazil.
In turn, the 62 of those companies that had the intention of innovating found as an obstacle to innovation the lack of qualified personnel. Whereas the insufficient availability of human resources can become a constraint on the capacity of the innovation system.
The institutionality of the system is complex and disarticulated. There is No clear separation between the strategic functions of policy design and the implementation of such policies. In other words, the political decision-level coexists with the level of execution within the same institutions (i.e. Colciencias, Ministry of Commerce). The result is low policy effectiveness and implementation.
To improve business innovation, the IDB proposes:
The development of more competitive markets is a recommendation in many of the proposals for the various areas of this EBP. The following are policy actions specifically suggested to stimulate innovation:
(i) Progressively increase investment in the sector up to 2.3 of GDP, close to the OECD. For which it is necessary to maintain or to increase the budgets of the public entities that leverage the private investment;
(ii) Increase the participation of the private sector with new financial and non-financial instruments similar to that used by other countries in the region such as Brazil and Chile;
(iii) Develop human capital with a massive scholarship program to reach 4.000 new researchers per year, supporting the existing national schemes (Colfuturo and Colciencias); And
(iv) rearranging the institutional structure by separating and differentiating the functions of strategy and policy formulation, on the one hand, and execution by another.
This post is also available in: Español (Spanish)