1. INNOVATION AND TERRITORIAL DEVELOPMENT:
ANYTHING NEW UNDER THE SUN?
REFLECTIONS “ON AND FOR” LATIN AMERICA
Annalisa Primi
Economista- Centro de Desenvolvimento da OCDE
annalisa.primi@oecd.org
Brasilia, DF 21 de Março de 2013
Semana do Desenvolvimento Regional
Mesa de debate “Educação, Ciência, Inovação e Desenvolvimento
Regional: Experiencias Latino-Americanas

2. A changing global economic landscape
=> Marco-economic power shift & changes in societal
demands and aspirations
=>Micro-economic changes (organisation of production,
new forms of FDI, increased relevance of “innovation”,
new forms of collaboration&networks)
=>Changes in development and policy models
Changing role and approaches to the “territory”

3. The world is changing
Marco-economic power shift & changes
in societal demands and aspirations
OECD member countries
Non OECD member economies
70
Share of global GDP, PPP (%)
65
60
63%
57%
55
50
45
40
43%
37%
35
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
30
Source: OECD Development Centre

4. CHINA IS RESHAPING THE GLOBAL
COMPETITIVE SCENARIO
World top 20 manufacturers, 2010
Country share in total world manufacturing value added
%
1990
2000
2010
30
25
20
15
10
5
0
Note: Manufacturing refers to industries belonging to International Standard Industrial Classification (ISIC) divisions 15-37. Value added is the net output of a sector after adding up all outputs and
subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is
determined by the ISIC, revision 3.
Source: United Nations Statistical Division, National Accounts Main Aggregates Database, March 2012.

5. Micro-economic changes
Prioritizing innovation: a key challenge (1)
Research and development investment and private sector
commitment in selected countries, 2009
4.0
GERD in USD (PPP), constant 2005 prices
Korea
3.5
Japan
100 Bn
R&D invesment (% of GDP), 2009
3.0
Singapore
Germany
United States
2.5
10 Bn
OECD Average = 2.3 %
2.0
France
1 Bn
China
United Kingdom
1.5
Brazil
Russian Federation
1.0
India
Argentina
0.5
Thailand
Indonesia
0
10
20
Malaysia
Costa Rica
30
40
50
60
70
80
90
100
R&D investment financed by the private sector (%), 2009
Source: OECD(2013), Perspectives on Global Development 2013 (forthcoming).
Latin America/ Caribbean
Asia
South Africa
Morocco
Kenya
0.0
OECD
Africa

6. R&D
as %
of
GDP
R&D investment financed by the private sector

7. Micro-economic changes
Changes in the organisation of
production and new forms of FDI
TOP 20 WORLD CITIES THAT OUTSOURCE “INNOVATIVE”
ACTIVITIES 2010-12 Number of Jobs
Note: Research and development refers to projects that involve the discovery, design, or development of a product
(i.e. technical design centre). Design, development & testing refers to projects that involve design, development or
testing of a product (i.e. A software company opening a development centre would be classified in this category).
To be included in research and development the project must include pure (technical) research.

8. Top 20 world cities for reception of innovative FDI, 2005-2007
Source: Primi and Skowronnek (forthcoming) on the basis of fDi Markets. A service from the Financial Times Ltd., 2013.

9. Top 20 world cities for reception of innovative FDI, 2010-12

10. Micro-economic changes
New forms of collaboration and
networks (global and local linkages)
TELECOM
A variety of
collaboration
models
coexist
across
sectors and
regions
Ajmone Marsan, G. and A. Primi (2012), “Tell Me Who You Patent With and I'll Tell You Who You Are: Evidence from Inter-Regional Patenting Networks in Three
Emerging Technological Fields”,,OECD Publishing.

11. WHAT HAVE WE LEARNED FROM OUR WORK
WITH PARTNER COUNTRIES ?
Institutions and governance matter
Ex. Territories are increasingly relevant for production development policies and
innovation
VARIETY IN REGIONAL INSTITUTIONAL FRAMEWORKS, SELECTED DEVELOPING ECONOMIES
National multilevel governance setting
Unitary countries
Degree of planning and
financing responsibilities
in industrial and
innovation policy of subnational governments
Federal countries
Brazil
India
Significant
Medium
(Examples in OECD
countries: Germany,
Canada, Switzerland,
United States)
Argentina
Malaysia
The Russian
Federation
(Examples in OECD
countries: Mexico)
Elected regional
authorities
Non-elected regional
authorities
Examples in OECD
countries: Italy, Spain)
China
Colombia
(Examples in OECD
countries: France,
Netherlands, Poland,
Korea)
South Africa
Peru
Limited
(Examples in OECD
countries: Denmark,
Turkey,
Chile, Japan)
Indonesia
Morocco
(Examples in OECD
countries: Ireland,
Finland)
Note: China, India and Indonesia have multiple relevant institutions at different government levels below the national one with responsibilities in industry and scientific and technological development
with non-elected authorities. Significant responsibility in industry and innovation does not imply a better performance, or a judgment of value; it refers to a different organisation and it implies different
policy options. The degree of devolution of competences in innovation-related matters is subject to change. Information reported in this table refers to the first semester of 2010 for OECD countries,
and to the second semester of 2011 for non-OECD economies.
Source: Draws on and updates OECD (2011d) and OECD (2012a).

12. WHAT HAVE WE LEARNED FROM OUR
WORK WITH PARTNER COUNTRIES ?
Policies matter
Ex. Latin American countries are starting to support the creation of start-ups
FINANCING
Seed capital
Business angels/
networks
Business incubators
DEVELOPMENT OF
ENTREPRENEURIAL
SKILLS
REGULATORY
FRAMEWORK
Venture capital
Business accelerators
Business training
Technology transfer,
University spin-offs,
Corporate spin-offs
Legislation regarding: enterprise creation, expansion, re-investment/ initial public
offering, mergers and acquisitions
Fiscal incentives and special
taxation for new firms
Seed
Start-up
Early stage
Source: OECD(2013), Promoting Starturps in Latin America: what are governments doing? (forthcoming).
Growth

13. Learning in innovation and regional development
policies
Categories
Definition
Learning from successful experiences
Latin American
experiences
Choice
(top down and
bottom up)
capacity of the policy to
select objectives,
sectors/activities and
beneficiaries
Ensuring high level political support to the
Regional Development Agenda
Gradually increasing spaces for bottom-up
initiatives
Identifying the challenges &defining a
strategy (transformation, frontier or catching
up)
Going beyond technology centred
innovation
“Plano de metas”
Brazil
Coherence
(Horizontal
and vertical)
capacity to deal both with
the cross-ministerial nature
of innovation and with its
diversified territorial impact.
Dealing with functional regions
Fostering cross-regional collaborations
Fostering cluster development
Major bottlenecks.
Consistency
(time and
financial)
capacity to ensure continuity
in policy choices as well as
fine-tuning as reality
changes
Multi-annual plans
Targeting resources at regions
Financing innovation
from NNRR (Chile,
Peru, Colombiaongoing efforts)
Control
(policy and
social)
capacity of the institutional
setting to ensure policy
accountability and
monitoring (policy control)
and to allow stakeholders’
participation in the policy
process (social control)
Observatories for regional development
(metrics and policies)
Some national efforts,
need to improve
metrics.
Costa Rica:
interactive mapping
of the NIS
Source: Primi (2013), “Innovation policies in Latin America: a tale of a (slow) learning process”, Forthcoming.

14. Changing roles and approaches to the “territory”
What do we observe in Latin America and in other
emerging regions?
The issue is rising up: in the national development agenda and in the
innovation and production development agenda (multiple reasons, not least
the rising revenues from NNRR and the willingness to finance production
upgrading and diversification on the basis of NNRR rents).
Contents and Discontents
New instruments for financing innovation/new “integrated” programmes and
higher role of regional authorities (ex. Accumulated learning in techno parks,
entrepreneurship&start-ups, more attention towards “regional development
planning
Importance of the institutional setting
Increased demand for policy accountability (new demands for new indicators)
Challenges in policy coordination
New forms of globalisation and organisation of production and
innovation challenges traditional policy modes.
Higher capacities and more strategic visions are needed in a context
characterised by harsh competition

15. The OECD Development Centre work on innovation
and territorial development
Perspectives on Global
Development 2013
Shifting up a gear:
Industrial policies in a
changing economic
landscape
Forthcoming!