Interview: Marta Losada
What role does the private sector play in furthering research and development (R&D)?
MARTA LOSADA: Colombia’s present business expenditure in R&D (BERD) is extremely low at only 0.043% of GDP in contrast to the OECD average of 1.62% of GDP in 2014. This must change dramatically. National industry needs to put more significant effort into R&D. It is clear that although Colombian GDP per capita has increased considerably over the past decades, the BERD indicator per capita has not. Some companies are doing a great job and have benefited from government incentives, but they are rare. It is necessary to recognise that investments in R&D typically have no short-term benefits; consequently, there are economic and historical reasons why there is an industry-wide need for initial government funding.
How can financial tools encourage investment, and what objectives should be set?
LOSADA: It is clear that insufficient funding is an issue. Several proposals to create specific sources of funds have been advocated but have yet to be implemented. Ambitious goals relating to R&D funding across all sectors need to be defined and readily executed to breach the significant gap that currently exists with OECD averages. In addition, stronger incentives for innovation in the industrial sector should be put in place. Specific proposals of new R&D financing sources include the reorientation of select current taxes, a better regulation of existing funds and the creation of sectoral funds. These are some of the more attractive opportunities being looked into.
Which sectors are the most important for Colombia to prioritise encouraging R&D?
LOSADA: Colombia has great strength in its human and natural resources. A clear priority should be biotechnology which, based on the country’s great biodiversity and implications for health sciences, becomes an opportunity. Colombia is still in the process of combining its competitive advantages in science with other fields of knowledge. Several cities in Colombia have mapped out their competitive advantages, and corresponding policies should be aligned to further these specialties. It seems that the widely recognised relationship between research strengths and economic value is still emerging in the country. This can easily be seen through indicators that measure industry and academic sector cooperation.
According to the above advantages, two specific opportunities include large amounts of land for agri-business and offshore businesses. Moreover, the younger population needs to receive a solid educational foundation, as they will be responsible for adding value and encouraging Colombian development.
How well developed is the legal framework in encouraging entrepreneurship and innovation, and what role can foreign companies play?
LOSADA: One of the fundamental ingredients of having a vibrant entrepreneurial climate is adequate venture capital – something lacking in the scale necessary to make a significant impact in Colombia. In addition, for companies to be more successful, it is necessary that a large part of entrepreneurial effort goes towards international markets. It is necessary to combine government and private efforts to develop a national ecosystem for innovation. Colombia has potential to become a centre for entrepreneurship and innovation from foreign companies, and there are few international companies that have already established their R&D or satellite centres here.
Classical economic theories mention three reasons why foreign companies invest abroad: the exploitation of natural resources, the market and human resources. Human resource capabilities should not be a significant issue, but improvements in the segment could be achieved by launching more powerful incentives.
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