Being resilient to external shocks, being agile in accepting change, building an innovation ecosystem and emphasizing human capital are the four necessary conditions -according to the World Economic Forum- for an economy to be prosperous in the so-called "fourth industrial revolution".
The event "Innovation and competitiveness in Uruguay", organized yesterday by CPA Ferrere together with the Uruguayan Chamber of Information Technology (Cuti), the National Agency for Research and Innovation (ANII) and the Inter-American Development Bank (IDB), focused on the third point.
What is the role of innovation in today's economic landscape? According to CPA Ferrere partner Bruno Gili, based on the Forum, innovation is "especially relevant" as a driver of growth, productivity and value creation. According to the latest WEF Competitiveness Report, which evaluates 12 different pillars of the business climate, Uruguay ranked 53rd out of 140 countries and third in Latin America. However, in terms of innovation, the country has a pending challenge.
In relation to this, the IDB representative in Uruguay, Morgan Doyle, said that the country invests "very little" in innovation, particularly in Research and Development (R&D), an area driven mostly by the public sector.
He also explained that those who invest in innovation register growth in productivity, exports, sales and employment, but that in Uruguayan companies there is a "virtuous circle" between innovation, productivity and competitiveness.
Specifically, according to IDB data, investment in R&D in Uruguay has grown from 0.24% of Gross Domestic Product (GDP) in 2000 to 0.36% in 2005, and if the country's level of investment is compared to its peers by GDP, such as New Zealand, Estonia and Norway, investment in R&D is between four and five times lower.
"The typical Uruguayan company invests less than half as much in innovation as those in Organisation for Economic Co-operation and Development (OECD) countries," Doyle said, adding that three-quarters of Uruguay's investment is in equipment, while one-quarter is in intangibles. "Uruguay should grow more in intangibles," he said.
The IDB representative said the country "is well prepared to take advantage of digital technologies" and leads the region in the use of information and communication technologies (ICT), but warned that the country is "far behind" in terms of the adoption of technologies by companies.
"There has been a very big effort, there are still challenges and much more progress could be made," he concluded.
For the president of the ANII, Fernando Brum, there is a lack of demand for innovation tools by companies, "we have the tools but companies do not come, there is a very big distance with the business world," he said.
Brum said that the agency is currently working on the creation of new instruments to promote innovation, however, he noted that they still fail to "move the needle" in advising the business community because "there is a cultural problem" and "miscommunication" of the ANII.
"It takes two people to tango and what the agency does is to play the music" and added that innovation tools are not useful if there is no one to use them. To reverse this, Brum explained that from ANII they train their team as if they were salespeople so that they can "go out into the field" to help companies.
"We are cooking in our own sauce, the stew is very good, but if no one eats it, we have to go out with the stew," he said.
The event culminated with a debate - moderated by the president of Cuti, Leonardo Loureiro - between the president of the Confederation of Business Chambers, Gerardo García Pintos; Sergio Birembaume, biotech entrepreneur; Christian Daude, director of Macroeconomic Advisory of the Ministry of Economy and Finance and the founder of GenLives, Lucía Spangenberg.
On the challenges that Uruguay faces in terms of investment, competitiveness and innovation, Daude said that progress has been made in recent times, although he acknowledged that "better tax incentives are lacking". He mentioned the measures that the government is currently working on to improve the situation, such as the Entrepreneurship Law and the 35% tax credit for companies that invest in R&D.
From the business side, García Pintos, Birembaume and Spangenberg agreed on the need to bet on innovation and were critical of the "conservative culture" of Uruguayan businessmen.
"The mentality we have is the first thing that stops us from innovating and also risk aversion," criticized Spangenberg. According to García Pintos, Uruguayan companies should bet on quality and aspire to be "a black label country".
Source: El País
Connect