Latin America continues to lag other regions when it comes to innovation, with the vast potential that exists remaining largely unfulfilled. But a few nations have shown some progress in a recent study that ranks Colombia as the fifth most innovative nation in the region.
Overall, Colombia ranks 63rd in the newly released Global Innovation Index 2016, published jointly by Cornell University, INSEAD, and the United Nations World Intellectual Property Organization (WIPO). Chile and Costa Rica, placing 44th and 45th, are the only two Latin American nations in the top 50, while Mexico and Uruguay, ranking 61st and 62nd, just barely edged out Colombia.
“None of the economies in the region has recently been an innovation achiever, with performance higher than expected by its GDP,” states the report. “Still, a few economies — such as Chile, Colombia, and Mexico — stood out among their peers.”
Colombia’s ranking, which improved from 67th in 2015, is hurt by its low level of spending on R&D. The Global Innovation Index measures this using the team GERD (gross expenditure on R&D) and notes that Colombia, unlike most, has managed to not lower its level of R&D spending since the financial crisis in 2008. As it recovered, it even increased spending. But its overall level remains lower than it should be, per the report.
Unfortunately, just maintaining — let along increasing — the amount devoted to this key area of the economy will be difficult during Colombia’s current age of austerity. The country is reeling from low oil prices, weak currency, and high inflation and also needs to find a way to pay for expensive post-conflict programs and an ambitious nationwide infrastructure renovation. Governmental budgets are tight all around the country and things aren’t much better for many companies.
But the report stresses that Colombia, and all those in the region, must find a way to continue spending on innovation. Investing in more R&D is the only way to fulfill the potential that exists.
“Clearly, most if not all countries in Latin America and the Caribbean — particularly their local governments, firms, and other actors — continue to have the innovation agenda firmly on their radar,” states the report. “This is unlikely to come to a sudden halt anytime soon. Yet, as Latin America and the Caribbean, especially Brazil, has entered into a zone of considerable economic turbulence, it will be important to overcome short-term political and economic constraints and to cling to longer-term innovation commitments and results.”