Americas

Latin America’s economic challenge: ‘Innovate or die’

When I arrived here to learn the secret of this area’s amazing output of technological innovation, and what other countries can learn from it, one of the first things that surprised me was how little it has to do with scientific and technological parks, or any other fancy pieces of real estate. I soon discovered that it’s all about people, and their peculiar mindset.

It surprised me, because in Latin America — the part of the world in which I spend much of my time — presidents of all political stripes are spending fortunes building mega scientific-technological parks that they think will propel their countries into the frontlines of world innovation. Most are kidding themselves, or fooling their people.

In Ecuador, President Rafael Correa is spending $1.04 billion to build a so-called City of Knowledge called Yachay in a remote area about two hours outside the capital, which he claims is “the most important project for the country in the last 100 years.” In Argentina, President Cristina Kirchner spends more than $30 million a year in a mega-scientific and technological fair called Tecnopolis, which she recently described as a “a city of technology, of innovation,” which is a “a symbol of the Argentina we want.”

But virtually all technology gurus I met in Silicon Valley laughed at such real estate ventures, describing them as a monumental waste of money. Likewise, a recent Inter-American Development Bank study concluded that Latin America’s scientific and technological parks “are far from achieving their goals.”

Indeed, despite having great reservoirs of innovation — more about this later — Latin America remains one of the world’s most backward regions when it comes to productive innovation. In a global economy in which mental work is increasingly better paid than manual work, or raw materials, and in which a company like Google is worth more than the entire economy of many countries, this is one of the biggest challenges for Latin America’s future.

Consider:

▪  When it comes to international patents of new inventions, the United States registered 57,000 patents last year at the United Nations’ World Intellectual Property Organization, and South Korea — a county that only five decades ago was poorer than most Latin American nations — registered 12,400 patents.

▪  Comparatively, all Latin American and Caribbean countries together registered about 1,200 patents — less than 10 percent of South Korea — Brazil registered 660, Mexico 230, Chile 140, Colombia 80, Argentina 26, Panama 18, Peru 13, Cuba 9 and Venezuela 1.

▪  Of all the world’s money that is invested in research and development of new products, only 2.4 percent is invested in Latin America, according to the Madrid-based Ibero-American States Organization. Comparatively, 37.5 percent of the world’s research & development is invested in the United States and Canada, 32.1 percent in the European Union and 25.4 percent in Asia, the study shows.

▪  Latin American private companies produce 20 percent fewer new products a year than their counterparts in other parts of the developing world, according to a recent World Bank Study entitled: “Latin American entrepreneurs: many firms, but little innovation.” While 90 percent of surveyed companies in Poland reported having launched one new product over the past year, only 40 percent of firms in Mexico said the same, the study shows.

It’s not that Latin America has a deficit of creative or entrepreneurial people. On the contrary, during the four years in which I researched my new book “Innovate or Die” (for the time being only available in Spanish, under the title “Crear o Morir!”), I interviewed some amazing innovators of all lines of work who are making their mark not just in their countries, but worldwide.

Take the case of Gastón Acurio, the Peruvian chef who began his career experimenting with Amazonian foods, converted his French restaurant into a Peruvian food eating place, and then started a movement that has ended up producing a worldwide boom of Peruvian cuisine.

Today, Acurio owns more than 40 Peruvian restaurants in New York, Miami, Madrid, Bogota, Buenos Aires and several other capitals, and Peruvian cuisine has become an economic phenomenon that accounts for 9.5 percent of Peru’s economic output. Not surprisingly, Acurio is a national hero in Peru, and according to most polls, has a higher approval rating than any politician or public figure in his country.

Acurio told me that he asks each of his restaurants to invent five new dishes a week, pick the ones clients like the most, and change their menus every six months. “You have to keep innovating all the time,” he said.

Or take the case of Luis von Ahn, the Guatemalan who at age 22 co-invented CAPTCHA — those pesky little boxes with distorted letters that you have to fill out in many websites to prove that you are human, and not a robot seeking to send spam e-mails. The program is now being used daily by about 180 million people around the world. Von Ahn, now a 34-year-old computer science professor at Carnegie Mellon University, sold an improvement of his program called RE-CAPTCHA to Google at age 23 for an undisclosed sum, which he told me was “between $10 and $100 million.”

Von Ahn told me that, although he could have retired at age 25, he recently launched a website to offer millions of people foreign language lessons for free. His website, Duolingo.com, pays for itself by doing cheaper than market rate translations for companies such as CNN; it gives the work to its students to translate as homework.

Most online language courses are very expensive, and many people in Latin America can’t afford them,” Von Ahn told me. “We found a way to offer them for free.”

Another Latin American innovation champion who may help change the world for the better is Alfredo Zolezzi, a Chilean industrial designer who invented a low-cost water purification system that may help provide drinking water for many of the 780 million people around the world without access to potable water.

Zolezzi, who is based in Viña del Mar, Chile, has come up with a simple device to turn contaminated water into plasma, and the plasma into clean water. He started out testing it by providing free drinking water to 19 families in a poor neighborhood, and later — with the help of the Ashoka Foundation, which sponsors social innovators around the world —got a validation from the U.S. National Sanitation Foundation. Now, Zolezzi is working with several corporations and foundations to bring clean water for free to some of the world’s poorest areas.

But why aren’t there more Latin American innovators like Acurio, Von Ahn and Zolezzi, who transcend their own countries and have a worldwide impact? Most studies say it’s because Latin American countries have poor quality education systems, produce too many humanities graduates instead of scientists and engineers, who produce more patents of new inventions, and lack business-friendly laws that encourage entrepreneurship. Indeed, that’s all very true, and there are numerous statistics that prove that these shortcomings are real.

But what I found in my travels throughout Latin America is that the biggest hurdles to innovation are of a different nature. They include the absence of a culture of admiration for entrepreneurs and innovators, and the lack of social tolerance for failure, which are both among the key elements of Silicon Valley’s success.

In most Latin American countries, there are tens of millions of children who want to be soccer stars, but relatively few who think it’s cool to be a scientific eminence, or a successful entrepreneur. That’s why very few Latin American college students go into science or engineering, and why South Korea has 5,451 scientific researchers per million inhabitants, while Latin America has only 560 per million inhabitants, according to World Bank figures.

As Inter-American Development Bank President Luis Alberto Moreno said earlier this year, referring to how Latin America is producing some of the best soccer players in the world — such as Argentina’s Leonel Messi and Brazil’s Neymar — but very few world-class innovators, the region should focus on producing “the next Neymar of the software industry” and “the next Messi of the robotics industry.”

That culture of veneration for innovators can be created with the help of well-crafted media campaigns and big money prizes for top inventors.

Also, most countries in the region could spur innovation by spreading the idea that all great inventions are the result of a process of trial and error, in which failure should not be stigmatized.

In most Latin American countries, entrepreneurs who fail become virtual social pariahs, and draconian bankruptcy laws prohibit them from starting any new businesses for many years. That, again, can be changed with legal reforms and public campaigns to spread the word that there is no big innovation that is not preceded by a chain of failures.

If you go

Andres Oppenheimer will present his new book, “Crear o Morir!” (Innovate or Die), at 3:15 p.m. Nov. 23, Building 3 room 3314, during the Miami Book Fair International, Miami Dade College, 300 NE Second Ave.

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