Information and Knowledge as the Fuel for Development

In today’s rapidly changing world, information and knowledge form the foundation of economic development, by creating jobs, driving growth, and replacing traditional labor-intensive systems as the primary engine of wealth creation. In addition, the technological developments of the 20th century have shifted advanced economies away from physically based structures and toward knowledge-based systems.

In this publication, The Imperative of Innovation: Creating Prosperity in Latin America and the Caribbean (LAC), prepared by the Science and Technology Division of the IDB for the EU-LAC Summit of Heads of State and Government, which took place in Madrid, Spain on 18 May 2010, the authors provide a comprehensive picture of the actual progress of science, technology and innovation (STI) in the region.

According to the paper, RYCYT (Red de Indicadores de Ciencia y Tecnología) estimates that R&D investments in the region in 2007 represented 0.67% of GDP compared to 0.52% in 1997. Nevertheless, during the same period, OECD countries increased R&D intensity from 2.1 to 2.3%.

This poor performance is mainly due to the scarce "learning" or "innovative" capacity, arising from low investment in human capital and STI infrastructure. LAC countries are not achieving as much as it should compared to similarly endowed countries such as Korea, Taiwan, and Singapore, which have accomplished unprecedented rates of economic growth while making heavy investments in STI.

The report examined indicators such as scientific publications, patents, high tech exports, investment in innovation by firms, ICT subscriptions, among others, which makes it worthy reading for anyone who is looking for a more accurate picture of the current situation regarding STI facing the LAC region. It shows, for example, that only five LAC countries have fiscal incentives for R&D as an innovation policy instrument.

Do then the LAC countries will have incentives to leapfrog other countries by embracing STI?

For more information about the content of this new report, the IDB's Science and Technology Division etc, please follow this link.