Why should countries create innovation ecosystems?

Innovation ecosystems are spaces for articulation and interaction of major stakeholders that are members of an innovation system, e.g. stakeholders from the financial, academic, business, and science/technology realms.

Each stakeholder, within their scope of influence, should learn their role in the innovation ecosystem and offer the best tools for the benefit and growth of all participants. For instance, science and technology governing bodies and financial institutions need to devise strategies, policies, and instruments that help mature the systems in it. Universities and technology hubs must act as an R&D arm to underpin the business sector and transfer knowledge and monitoring in managing their innovation process. For its part, the business sector should find support on academic institutions and technology hubs, creating spaces for collaboration and co-creation of market-ready technology innovations and producing social and economic benefits, ensuring the sustainability of partnerships.

There are multiple reasons why countries should encourage the creation and enhancement of innovation ecosystems. The most significant advantages include notably:

• Boosting economic growth by fostering innovation, by creating products, services, and technologies that have a direct effect on the productivity and competitiveness of local and regional economies when they reach the market.
• The creation of skilled jobs, in an attempt to build technical and specialized creative skills in human capital.
• The collaboration between key stakeholders from different contexts, which enables sharing of experiences, know-how, lessons learned, resources, among others, thus boosting joint growth and developing skills and strengths. This collaboration also helps identify and propose systematic solutions to social and environmental issues that require huge joint efforts in conceptualization and implementation, due to the monetary demand for resources, for specialized human capital, and for the time that these projects usually require.
• Innovation can help improve healthcare, education, mobility, and other aspects of everyday life, thus leading to a better quality of life for all.
• Diversifying the economy through innovation can minimize reliance on a single sector and improve the nation's resistance and resilience in case of potential economic crises.
• Countries with healthy innovation ecosystems tend to be more competitive internationally. Constant innovation allows local companies to compete in the global market and develop sustainable competitive advantages.

Based on the above, between 2020 and 2022, CAF—development bank of Latin America and the Caribbean—, together with the Polytechnic University of Valencia (UPV) in Spain and the Ibero-American States Organization (OEI), devised and implemented a program to foster and consolidate the creation of innovation ecosystems in Latin America by facilitating multilateral initiatives on training-action, awareness, and support. The program called for the transfer of knowledge to university professors and representatives of SMEs in the region through specialized 120-hour training, and the coordination and involvement of ministries, science and technology governing bodies, business associations, chambers of commerce, think tanks, universities, and corporations, which mobilized their networks and assist in the implementation of all activities. 

The main outcomes of the program included:

• Fifteen editions of the Innovation Challenge Formulation course, attended by 1,600 people, including university professors, business sector representatives, students, and administrative staff from several universities and chambers of commerce, among others.
• Seven beneficiary countries (Argentina, Colombia, Costa Rica, Ecuador, Panama, Paraguay and Uruguay).
• 661 small and medium-sized businesses trained.
• 18 universities participating in the program, building capacities for their faculty.
• Design of 427 innovation challenges, some of which received funding from local science and technology agencies to support their implementation.
• An International Meeting between stakeholders of the innovation ecosystem from six Latin American countries to share experiences and lessons learned from the program, and encourage networking to energize the innovation ecosystems regionally.

The above underscores the significance of constant collaboration with our local and international partners in assisting and creating initiatives for convergence of the agendas of priority sectors for the production mix of countries, such as government, academia, technology, and business sectors, with the purpose of improving the quality of life for all people in Latin America and the Caribbean, boosting regional development and integration, and inclusive and sustainable growth.