There are No Shortcuts to Development

Interview with Gonzalo Rivas, Chief of the Competitiveness, Technology and Innovation Division at the Inter-American Development Bank

By: Guillermo Máynez Gil

The technological revolution is transforming all areas of human activity and tests the adaptability of institutions, companies and people. How is Latin America facing this? What are the most pressing challenges of the region? In this interview, the Chief of the CTI Division of the Inter-American Development Bank (IDB) addresses these questions and tell us about the support provided by the multilateral organization to support the efforts of Latin American countries in terms of innovation, technological development and university-industry ties.

In your opinion, what are the main challenges the current technological revolution imposes on developing countries?

This revolution has a big digital component. Nowadays, there are quite a few applications that are increasingly prevalent. Companies based on computer platforms are changing the way we relate to each other and the way we consume, while they grow into other parts of human activity. Thanks to the use of data, for example, scientific research is making huge progress in molecular biology and related fields, like biotechnology. This panorama opens up an array of opportunities for Latin America to improve the living conditions of its inhabitants.

First, the way in which public services reach people is revolutionized thanks to these technologies, becoming much faster and more comfortable. Second, applications that have an impact on people’s lives, like access to health services through telemedicine, or improving capacities to develop intelligent agriculture by using fertilizers and water more efficiently, can all be created.

Hence, there is a world of applications that is increasingly noteworthy. If financing games or communication applications predominated in the past, what we see today in the trends of risk capital funds is that investments are also oriented to applications in the world of medicine or agriculture, to mention a few.

In terms of challenges, generally speaking they can be divided into two groups. One is related to connectivity: how to take good quality Internet everywhere, including poor neighborhoods and rural areas, to see benefits distributed equally. The other one, which is absolutely crucial, is the digital talent that companies and institutions need to leverage these digital technologies. This talent can be trained through a number of quick training boot camps that take 3 to 6 months. These provide tools to people with no previous knowledge to get familiar with these new technologies.

 

How would you describe the current situation in Latin America regarding research and development? Does its world ranking correspond to its human and material wealth?

Latin America is obsessed with finding a shortcut to development. It sees innovation, research and development as a luxury and not a need. And that is strange because I don’t know of any country that has developed without making a very big investment in research and innovation promotion. Some, for example, are extremely wealthy in terms of oil, but we know that type of wealth is fleeting.

The problem is that current challenges in climate change and social issues, make countries end up being stuck, if they don’t manage to reconcile growth and social inclusion, while preserving the environment in a better way. I don’t see any other way of reconciling growth, sustainability and inclusion, but through innovation.

 

What countries in the region have better performance in terms of innovation and technological development?

In terms of effort organization, Brazil is by far the leader in the region. Other countries like Mexico, Costa Rica, Chile, Uruguay or Argentina have interesting conditions, but are not investing much in R&D. Unfortunately, they invest less than what they should. Mexico, for example, has areas of extremely high productivity and technological complexity, but we are talking about very specific parts of the Mexican economy. The same happens with Argentina. It has some areas of excellence; we mustn’t forget it is one of the few Latin American countries with numerous Nobel Prize winners in scientific fields. It certainly conducts leading research in specific areas, but it is relatively scarce. And Brazil, undeniable leader in the past that invested 1.1% of GDP in R&D, has been decreasing its efforts, and that is worrisome. Few cases stand out in the region. There are countries like Uruguay that have organized their efforts very well, but investment is still insufficient.

 

Are the conditions there to overcome the lags that afflict Latin America in terms of investment in research and development, both in public and private sectors?

This is a very complicated issue because it involves overcoming the short-term approach with which policies are usually carried out in the region. Efforts to train human resources and generating system connections takes years, but they pay off in the long run. They create more favorable conditions for growth and development. The problem lies in that it requires political will, because it means to stop doing other kinds of things that can result in more dividends in the short term. This is the big must the region has today.

Also, investment must have a sense of mission so it can focus on the specific problems of each country, going from basic research to applied research and technology transfer. For example, Chile has privileged the prevention and mitigation of natural disasters because these have a devastating effect on its economy. Thus, investing in technology that addresses this problem is highly profitable. A priority agenda can be scheduled, from physics to anthropology, in line with the policy agenda to address these great challenges.

 

A study conducted by the IDB indicates that in Latin America 50% of jobs are likely to be automated in the future. How can countries prepare to leverage the potential of technological changes?

This is true, but mainly for repetitive tasks, or tasks that depend on calculation or computing. The challenge is to generate skills that allow people to take up jobs that will emerge, where aspects like creativity, imagination and asking questions will be more important than mastering technical knowledge and repetitive skills. This transition process is complicated. An extreme case is how science is done today. Making researchers, in any field, require a solid training in data analysis. It is very difficult to become one without these skills. But essentially human skills that cannot be replaced by robots will also be required.

 

What are the main challenges universities face to support companies in the digital leap and demands imposed by the production dynamics of knowledge economy?

To begin with, adjusting their formative process to the fact that the world is changing very quickly. They will also need to distinguish between training for researchers and training for professionals. The latter can be achieved more quickly, without stopping professionals from learning research skills. The fact that one can be trained, on certain subjects, in boot camps in a few months, and get the same salary as a person with a bachelor’s degree, is very revealing of the challenges universities face. There are very nimble formative mechanisms that are invading university ground and so, it is essential they adjust their formative process.

The second challenge lies in that in Latin America, universities conduct most of the research. They must then be very mindful of society and company needs, in order to guide this research towards a useful direction.

 

In a world where Google knows it all, what should be the most valued competencies of alumni from higher education institutions?

The capacity to learn, to have innovative interpretations, to know how to work in teams, and to listen. For example, a biologist needs to know about biology, but they will increasingly need what is referred to as “soft skills” or human skills, because knowledge is generated in spaces where different disciplines converge. The capacity to build those bridges will be more and more important.

 

What about companies? What should they do to improve their performance in technological R&D?

The biggest problem companies have to access university-generated knowledge is that in many cases, they don’t have the trained staff to understand or assimilate it. There are many myths regarding the ties between universities and companies, like thinking that the former need to approach the latter. What happens in places where they coexist—Silicon Valley or Cambridge, Massachusetts, for example—is that companies established there have staff who understand papers published in journals, or can go to a conference and understand where cutting edge knowledge is generated to then apply it. That is the biggest challenge for companies.

 

Do university researchers have the right incentives to get involved in the country’s productive innovation and R&D?

It has changed over time, but in general, the answer is no. The system of incentives looks at the number of publications and that means that even if you are close to develop research that could have an important application, the financing and incentive structures will push to further the research and not develop this application, for fear that your career will not continue to progress. “Publish or perish” is still the norm, though some systems have included the idea that some universities could be evaluated by the number of patents they have. But, likewise, this is not an infallible measure. Patenting is expensive and many patents are useless, so it doesn’t make sense to force universities to do that constantly. The question is: how is value generated? And universities generate value in different ways: training people, of course, and new knowledge, but they can also generate value for society through the transfer of said knowledge, of identifying important problems to try to solve them. The latter dimension is the one that is sorely missed because it doesn’t necessarily mean publications in indexed journals.

 

What public policies would help promote better coordination between companies and universities in the process of innovation and technological development?

The biggest problem is not only that universities are in an ivory tower, but rather, that companies are simply unable to formulate relevant questions or even understand the knowledge generated by the university counterpart. Public policies that help companies acquire abilities to generate new knowledge, would allow them to know what to look for and where to look for it. Innovating companies search and find global answers, but the first place they go look is in the closest research center.

 

How can international cooperation support Latin American efforts to improve their performance in innovation and technological development?

The first thing to know is how countries learn from each other. In Latin America some countries face more or less the same challenges. For example, countries facing big and similar institutional challenges to develop their scientific and technological research agencies. Those countries can learn from each other and from previous international experiences. A good part of what the IDB does is transfer experiences and learnings. That’s very important. So is having access to what more advanced countries are doing or have done. International cooperation must entail ongoing companionship—more than just reading documents—through continuous dialog. The advantage of being last in line is that you learn from what everybody else did right and wrong in the past, while understanding that the process is not to be copied, but adapted.

 

What role does the IDB have in supporting innovation in the region? What are their priority action areas?

In its 60 years of existence, the IDB has been a permanent companion in the region’s efforts regarding this. In the seventies and eighties, it helped a lot in strengthening university capacities and in the formation of scientific and technological research counsels. In recent years, it has been key in supporting intervention capacities in countries through establishing innovation agencies and funds. Without the IDB, these would not have existed. It is now a priority to support other innovation-stimulating instruments, for example, using public procurement as a mechanism to encourage innovation; helping generate mechanisms to support entrepreneurship, rapid training of talent, especially digital; and, of course, innovation processes that help meet the objectives of sustainable development.

 

What do you think of the results obtained by the IDB in this area?

One of IDB’s strength is its very rigorous evaluation system. We evaluate the impact of projects and programs. And if we look at what we’ve done, we can see these have been perfected in the region. This not only thanks to the bank; the governments and intervention mechanisms also have merit in this. The problem is that these interventions are not yet at a scale where fundamental and solid changes are produced. The region has learned to do these things well, there is not so much fear, but they are still being done but in a much smaller scale.

 

Given the starting condition of Latin American countries, how do you expect their technological and productive innovation heritage to evolve in years to come? What scenarios do you see?

Except for regions like Brazil, Mexico, Argentina and Costa Rica, most countries in the region depend too much on natural resources, from mining to forestry, agriculture or biodiversity. Much of what lies ahead has to do with activities that will revolutionize when applying digital technologies, especially the Internet of things. The emergence of biomaterials and, in general, the entire bioeconomic world, will be very important. And in these activities, Latin America has enormous potential if it invests in the generation of talent, and research and application capacities. The region has much to bring forth, hence the urgency in doubling efforts.