Advancing Innovation May Advance Latin America's Economies, Part 3/3
In this 3-part series we’ve explored fundamental, detailed drivers and components for innovation in Latin America. In this last article we consider the innovation landscape in the macro- context for Latin American countries that are holding presidential elections this year and how these elections may create the opportunity for advances in innovation.
On a GDP basis, three of Latin America’s top five economies1: Brazil, Mexico, and Colombia have presidential elections in-play; in 2018 two out of three Latin Americans will elect a new president. These same countries, from an innovation and intellectual property perspective, have also been cited in the most recent 2018 Special 301 Report (briefly introduced here in Part 1) –the “naughty list” of intellectual property infringers.
Colombia’s president elect could spur innovation through investment
With Colombia’s recent accession to the OECD, innovation advocates wonder if opportunities to create more reliable innovation frameworks could arise with a new presidential administration. Through the OECD accession process, the country’s legislation, policies and practices were rigorously reviewed by 23-distinct committees which created the opportunity for on-the-ground policy changes2. After claiming 39% (7.6 million ballots—the most ever for a Colombian presidential first round) of the vote on May 27, an Iván Duque victory was already seen then as a fait accompli3. Duque is on record for wanting to reduce taxes and encouraging domestic and foreign investment (FDI)—at 30% GDP (above the 23.1% in 2017). For intellectual property (IP) intensive industries, the framework for IP may be a necessary investment component for Duque to achieve such ambitious investment growth targets.
Mexico’s new president AMLO spells change for the country
In Mexico, the former Mexico City mayor, Andrés Manuel López Obrador, commonly referred to as ‘AMLO’, emerged victorious on July 1. Carlos Urzúa, Amlo’s pick for finance minister is on record for an aggressive economic agenda, “Expectations are just so, so big at the moment, we’re going to have to get a lot done as fast as possible.”4 From a healthcare perspective, AMLO’s background in building hospitals, something which may create both jobs and innovation opportunities, could also feature prominently in his early agenda. At a minimum, Mexico voted for change in 2018, largely driven by key satisfaction (or dissatisfaction) measures5:
- 82% of respondents say public security has worsened in the past year
- 64% say the economic situation of them/their family has worsened
- 79% say the governing party should switch from the Partido Revolucionario Institucional (PRI)
Setting the stage for innovation through investment In a June 7 Datafolha Poll6, the three Brazilian Presidential frontrunners were: Luiz Inacio Lula da Silva (30%), Jair Bolsonaro (18.5%), and Marina Silva (13.5%). Overall, with the first round of elections scheduled for October, it’s still too early to call a definitive projected winner in Brazil, and Lula’s legality will keep him off the ballot in October. Generally, we can assume that investment and innovation go hand-in-hand. With Latin America’s profile as an attractive growth market intact, we can expect innovation opportunities and advances in each country to be supported by a reliable innovation framework which include full patent and regulatory data protection. The increased focus on investment can set the stage for innovation and intellectual property by recognizing one key trend, in this regional growth market: “Latin America invests less of its GDP in research and development than any region except South Asia, and very few Latin American companies rank among the global leaders in R&D spending7,” which certainly represents an opportunity.
2 OECD Integrity Review of Colombia: Investing in Integrity for Peace and Prosperity. October 27, 2017. Last accessed June 14, 2018.
3 Americas Society/Council of the Americas. Poll Tracker: Colombia’s 2018 Presidential Election. June 11, 2018. Last accessed June 14, 2018.
4 The Financial Times. The Big Read Podcast: López Obrador’s mission: to transform Mexico. June 14, 2018.
5 Americas Society/Council of the Americas. Poll Tracker: Colombia’s 2018 Presidential Election. June 11, 2018. Last accessed June 14, 2018.
6 Bloomberg. Brazilian Election Coverage. June 12, 2018. Last accessed June 14, 2018.
7 Boston Consulting Group (BCG). Why Multilatinas Hold the Key to Latin America’s Economic Future. March 15, 2018. Last accessed June 14, 2018.