Breaking Barriers To Innovation In Latin America

In our previous article, we analyzed the Global Innovation Index 2024, highlighting key trends in innovation capacity worldwide, with a focus on Latin America’s positioning and Mexico’s specific challenges. The 2024 edition reaffirms Switzerland’s leadership, Brazil’s rise as the region’s top performer, and Mexico’s undergoing struggles in institutional and infrastructure pillars, which are critical for sustaining innovation. While Mexico maintains strengths in creative output and business sophistication, its declining institutional environment remains a major barrier. In this follow-up article, we will shift our focus on the structural limitations of innovation linkages in Latin America and explore collaborative strategies that can enhance the region’s innovation ecosystem.

Assessing collaboration in innovation ecosystems

Two key indices provide insight into the state of collaboration in Latin America's innovation ecosystems: The Global Innovation Index (GII) and the Global Ecosystem Dynamics Initiative (GED).

The GII assesses “Business Sophistication” by measuring how well firms facilitate and engage in innovation activities. One of its subpillars, "Innovation Linkages," focuses on interactions within innovation ecosystems — among businesses, research institutions, government, and others — for technology development, diffusion, and technology transfer. According to the 2024 Global Innovation Index, the five highest-ranked Latin American countries in this subpillar are Ecuador (44), Costa Rica (66), Brazil (69), Mexico (73), and Colombia (77). In contrast, the lowest-ranked countries in the region are Nicaragua (128), Paraguay (126), Bolivia (125), El Salvador (122), and Honduras (121). The average ranking for Latin American countries included in the index is 95, highlighting the need for stronger innovation linkages.

On the other hand, GED has conducted 19 studies on collaboration dynamics in Latin American economic ecosystems, particularly those related to innovation. Despite variations in the Collaboration Index across these ecosystems, several common challenges have been identified as key areas for strengthening collaboration among internal actors:

• A high dependence on governmental actors.

• A weak presence of knowledge-generation institutions, such as universities and research centers.

• A lack of diversity in key ecosystem actors.

• Minimal influence from entities that can promote the ecosystem's strengths and positive outcomes internationally.

GED’s research initiative provides valuable insights into the structure of economic ecosystems, their collaboration dynamics, and their targeted actions to enhance cooperation and impact within these networks.

Strengthening Latin America's Innovation Ecosystem through collaboration

Latin America faces significant challenges in closing its innovation gap with regions such as North America, Europe, and Asia. As China shifts most of its infrastructure investment toward Africa, Latin America experiences a negative impact from this geopolitical situation. Without strengthening innovation ecosystems, the region risks economic and social consequences, as value creation will increasingly concentrate in regions where resource extraction and manufacturing are no longer priorities, giving way to highly specialized industries driven by local talent, knowledge, and resources.

To foster high-impact collaboration within Latin America’s innovation ecosystems, key actions should be prioritized:

Establishing a unifying purpose: A shared vision strengthens collaboration within the innovation ecosystem. Aligning goals among businesses, universities, and governments fosters trust and long-term commitment. In Latin America, defining a clear purpose around strategic sectors can enhance coordination and impact. The GED research initiative has already collaborated with local actors to establish a shared vision as a first step toward creating more impactful projects.

Enhancing knowledge of ecosystem diversity: Identifying and understanding the various actors — entrepreneurial communities, incubators/accelerators, chambers of commerce, universities, government entities — enables more effective partnerships. Mapping the ecosystem and fostering cross-sector dialog can reduce isolated efforts and, as a result, create strategic synergies.

Developing multipurpose projects: Initiatives should generate benefits across different stakeholders, maximizing impact and sustainability. Programs that integrate technological innovation with social or economic development will attract greater investment and institutional support. In Latin America, such projects can address critical challenges in health, education, and climate change.

Placing knowledge generators at the center: Universities and research institutions must play a more active role in technology transfer and startup creation. Strengthening links between academia and industry can accelerate innovation cycles and increase commercialization opportunities.

Encouraging government involvement in fostering linkages: Policymakers should actively promote collaboration among key players. Policies that incentivize joint R&D initiatives, public-private partnerships, and funding mechanisms can help create a more dynamic and connected innovation ecosystem.

By addressing these structural challenges, Latin America can build a more robust and dynamic innovation ecosystem, driving long-term economic and social progress through enhanced collaboration.