Most Latin American presidents brag about the supposedly great things they’re doing to spur innovation in their countries. Unfortunately, the latest statistics show they are not making much progress.
According to recently released figures from the Geneva-based United Nations World Intellectual Property Organization (WIPO) the number of international patent applications for new inventions filed by Latin American countries in 2015 remained virtually flat from 2014. There was zero growth in the region’s international patent filings.
Comparatively, China’s patent applications with WIPO rose by 17 percent, South Korea’s 11.5 percent, Israel’s 7.4 percent, and Switzerland and Japan’s by 4.4 percent each.
“In Latin America, there was a healthy growth in patent applications for several years until 2013, and since then things have stagnated,” WIPO chief economist Carsten Fink told me from Geneva.
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He explained that this stagnation may be due to Latin America’s ongoing recession. Many South American economies have been hurt by falling world commodity prices, and that has had an impact on what governments, universities and private companies spend on innovation.
When the economy goes down, countries often cut their research budgets and reduce their legal departments’ funds for international patents. Typically, filing a patent with the WIPO costs from $10,000 for a basic application to $100,000 by the time that application is filed in several major countries, Fink said.
From a Latin American perspective, the figures are even more depressing if you look at the total numbers of the region’s patent applications, and compare them with those of the United States, South Korea, or Israel.
Last year, Brazil registered 547 patents with WIPO, Mexico 320, Chile 167, Colombia 86, Argentina 28, Peru 25, Panama 15, Costa Rica 6, Ecuador and Dominican Republic 5 each, Cuba 2, and Venezuela 0. By comparison, the United States filed 57,385 patent applications with WIPO, South Korea 14,626, and Israel 1,698.
Yes , you read well. All Latin American countries together — including Brazil, the world’s eighth largest economy and Mexico, the world’s 15th largest — filed 1,216 patent applications with WIPO in 2015, less than 10 percent of those filed by South Korea. And all of Latin America filed fewer patent applications than tiny Israel.
That’s bad news for the region, because in the current global knowledge economy, new inventions are worth increasingly more than the raw materials exported by most Latin American countries. Today, big technology companies such as Apple or Google are sometimes worth more than the economies of entire countries.
Granted, patents are not the only indicator of innovation. Some critics even point out that the patents’ system is counter-productive, because it slows down world-wide innovation by research institutions that fear lawsuits by patent holders or extortionists.
But other ways of measuring innovation are not boding well for Latin America either. If you look into countries’ spending on research and development, Brazil spends 1.2 percent of its gross domestic product on R&D, Argentina 0.6 percent, Costa Rica 0.5 percent, Mexico 0.4 percent, Colombia 0.17 percent and Peru 0.15 percent.
By comparison, South Korea spends 4.04 percent of its gross domestic product on R&D, and the United States 2.79 percent, according to the World Bank’s World Development Indicators.
In education, another key driver of innovation, Latin American students rank at the bottom of the list of nearly 65 countries participating in the PISA standardized tests of 15-year old students.
Fink, the WIPO chief economist, told me that there are some bright spots in Latin America’s innovation scene. Chile, for instance, has almost doubled its WIPO patent filings from 89 in 2010 to 165 in 2015, despite its economic downturn because of falling commodity prices.
“The Chilean government has made an effort to invest in the innovation economy,” Fink says. “Most of their patent filings are in the mining sector, where Chile is globally competitive, and has a technological edge.”
My opinion: It’s hard for Latin America to keep pace with China, an authoritarian regime that sets annual patent application goals for its research institutions. Or with South Korea, which spends heavily on research, and has a national obsession with education standards.
But there’s no excuse for Latin American countries not to follow Chile’s example, and create public-private institutions to fund innovative start ups and support international patent applications. Some countries in the region have not yet awakened to the fact that we are living in a knowledge economy, where you either innovate or fall increasingly farther behind the rest of the world.
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