**3. The process of promoting innovation in Latin America**

Policies and initiatives to promote innovation in Latin America have changed and evolved. **Table 1** shows a summary of the most relevant aspects that marked the promotion of innovation in Latin America. Although general issues were experienced in a similar way, the process must consider the particularities of each country or region.

These particularities are due to external factors such as changes and innovations in public policies implemented in more industrialized countries, which are seen as reference models. On the other hand, internal factors can be: economic, such as the productive vocation focused on raw materials; technological, marked by human capital and technological infrastructure; political and even cultural, for example,



*Challenges for the Promotion of Innovation and R&D in Latin America: A Territorial Perspective DOI: http://dx.doi.org/10.5772/intechopen.112289*

#### **Table 1.**

*Evolution of innovation promotion policies in Latin America.*

the recognition of a weak, unstable, and short-term policy and the historical aversion to the application of sectorial policies of industrial support.

This aversion emerged after the 1970s and 1980s when several Latin American countries devoted efforts to implement an industrialization process through aggressive import substitution and industrial development policies. Although this type of policy gave rise to the development of high-level activities that contributed to initial industrial development, the absence of sanction mechanisms gave way to the proliferation of a wide range of sectors and activities that were inefficient, which in the face of the liberalization of markets, international competition and lack of incentives typical of the 90s, ended up leaving the market, and producing a severe economic and political crisis [16, 17]. These events explain a recurrence in the innovation policy of Latin America in the use of approaches based purely on demand and in addressing market failures from a transversal perspective [18].

In analyzing this historical process, reference cases are identified that show important positive advances. Among these, Chile stands out, which has historical experience in implementing different sets of innovation promotion policies, first with a horizontal emphasis focused on correcting market errors (1980 to 2000), to move on to a more vertical, focused on certain industrial clusters. Among the horizontal policies, guarantees were applied for loans for small businesses, subsidies for new exports, and financing programs for innovation (Innova Chile) operated by CORFO. On the other hand, vertical policies (sectoral and target oriented) were implemented such as the development of FDI (foreign direct investment) attraction programs in high technology and the operation of Fundación Chile, through its technology transfer and business generation model [19].

Some Latin American institutions have maintained an important role in the construction and articulation of technological innovation systems, for example, the aeronautical technical center in Brazil, for the gestation of the aeronautical industry [20] or SENASA (National Service of Health and Food Quality) and INTA (National Institute of Agricultural Technology) for the promotion of agri-food chains in Argentina [14]; however, the case of Fundación Chile deserves a special distinction. This institution for more than four decades has had an active agenda in promoting innovation in collaboration with the government; it has been a pioneer in promoting and enabling different productive sectors such as the aquaculture industry [7, 14], the agro-industrial sector, the movement toward renewable energies, such as solar, one of the first venture capital funds in Latin America, among others [21]. The role of Fundación Chile has been related to a "system builder" [22], that is, an engine for the development of technological innovation systems in their early phase, as described by (**Box 2**) [24].

Fundación Chile is a public-private organization with financing from the Chilean government and the mining sector, whose purpose is to promote the transformation of Chile toward sustainable development. For more than 45 years, it has collaboratively created high-impact innovative solutions for Chile, especially in promoting new industrial sectors that have even been success stories reviewed by international literature, such as the salmon industry [14].

Over the years, this institution has undergone four phases of evolution that mark, in different ways, the type of impact in promoting innovation and economic development in Chile. The first, called the autarchic model (1982-1998), focused on using its own funds to develop industrial demonstration projects based on technology transfer, covering activities from opportunity identification, R&D, company creation, administration, and transfer to the private sector. The second called the alliance model (1999-2009), continued to carry out complete business incubation and technology transfer activities, now using additional public funds (CORFO) and alliances with investors. The third, the Limited VaR model (2010-2014), focused on promoting high-impact companies, especially in the mining and energy sectors. The fourth and last phase, called "venture capital" (2012-present), focuses on boosting the innovation ecosystem in Chile, based on support for the players in the venture capital industry and investment in startups that develop high-impact innovations in sectors of high potential and interest for the country [21].

On the other hand, it can be noted that Fundación Chile serves as an operational instrument for the implementation of particular innovation policies, called by Mazzucato as "mission-oriented" [23], which seek to solve national challenges such as dealing with the energy crisis, water scarcity, and sustainable use of resources.

This model could be considered as an effective mechanism to counteract the negative impacts of political, economic, or technological factors that affect the innovation promotion environment.

#### **Box 2.**

*The Fundación Chile model for the development of innovation markets.*
