Transcript Document

Chile
Facing the challenge
of the New Economy
Carlos Alvarez
August 2004
Contents
•
•
•
•
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Economic Performance.
Competitiveness
National System of Innovation.
Innovation Policy.
Future Challenges.
Snapshot of the Chilean Economy
Population:
15.1 million
GDP (2003):
US$ 72.1 billion
Income per capita (PPP):
US$ 9,992 (IMF)
Exchange rate (July, 2004):
1 US$ = 632 CLP
Interest rate (Monetary Policy):
1.75% (July 2004)
Unemployment rate (July 2004):
9.7%
Economic Performance
GDP Average Annual Growth Rate (Selected Countries)
Source: International Monetary Fund (www.imf.org), 1990 - 2004
China
9.0%
Singapore
6.1%
Korea
5.9%
Chile
5.5%
Indonesia
4.5%
Mexico
3.1%
Poland
2.6%
OECD
2.5%
Argentina
2.4%
Brazil
Hungary
Czech Republic
2.0%
1.3%
0.6%
Economic Performance
GDP Growth in Chile (%)
Source: Central Bank of Chile (www.bcentral.cl), 1994 - 2004
10.2
7.4
6.6
5.7
5.0
4.5
3.3
3.4
3.2
2.2
-0.8
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004 (e)
Economic Performance
Fiscal Balance (% of GDP)
Source: Central Bank of Chile (www.bcentral.cl), 1994 - 2003
2.6
2.3
2.0
1.7
0.4
0.1
-0.3
-0.8
-0.8
2002
2003
-1.4
1994
1995
1996
1997
1998
1999
2000
2001
Economic Performance
Evolution of Inflation in Chile (%)
Source: Central Bank of Chile (www.bcentral.cl), 1994 - 2003
8.9
8.2
6.6
6.0
4.7
4.5
2.6
2.3
2.8
1.1
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Economic Perrformance
Industrial Structure
Source: Central Bank of Chile (www.bcentral.cl), 2003
Transport y
Communications
8%
Trade, Rest. & Hotels
12%
Construction
8%
E.G.W
3%
Financial Services
13%
Household goods
8%
Manufacture
18%
Mining
9%
Fishing Agriculture-forestry
1%
5%
Personal Services
11%
Public administration
4%
Economic Perrformance
Exports of Goods (Total: US$ 21.0 billion FOB)
Source: Central Bank of Chile (www.bcentral.cl), 2003
Ot her Indust rial Goods
Ot hers
5,2%
7,3%
Chemicals
8,3%
Copper
35,6%
Wood pulp
5,9%
Iron, Salt pet er,
Forest ry Product s
Molybdenum & Ot hers
6,0%
4,6%
Wine & Spirit s
Food
Fresh Fruit s
3,4%
15,7%
8,0%
Economoic Performance
Increasingly Diversified Exports…
Selling 3,854 products (200 in 1975), to 165 countries (50 in 1975), by 6,024
exporters (200 in 1975)
… and Markets (2003 figures)
Asia
Europe
United States & Canada
Latin America
Africa
Others
31.5 %
25.5 %
19.7 %
18.8 %
0.5 %
4.0 %
Competitiveness
Global Competitiveness Ranking (Selected Economies)
Source: World Economic Forum (www.weforum.org), 2003 - 2004
Finland
1
United States
2
15
United Kingdom
South Korea
18
Chile
28
Ireland
30
Czech Republic
39
Italy
41
China
44
Mexico
47
Brazil
54
Colombia
63
Indonesia
72
Argentina
78
Bangladesh
Haiti
98
102
Competitiveness
Global Competitiveness index rankings
Source: World Economic Forum (www.weforum.org), 2003 - 2004
GDP per capita in 2001 (ppp)
National business environment
Public institutions
Macroeconomic Environment
Technology
Company Operations and Strat.
Chile
36
31
19
13
33
35
Mexico
39
60
58
21
47
45
Malaysia Poland
44
34
26
45
33
61
20
54
26
36
27
46
Finland
14
2
1
14
3
4
New
Zealand
22
20
4
17
27
25
Competitiveness
Economic Regime Variables
Source: Knowledge for Development WBI
Gross Capital Formation
10
8
Local competition
Budget Balance
6
4
2
Adequate regulation of
0
Trade as % of GDP
financial institutions
Soundness of banks
Tariff and non Tariff
Barriers
Intellectual Property is well
protected
Competitiveness
Governance Variables
Source: Knowledge for Development WBI
Press freedom
Regulatory quality
8,5
8
7,5
7
6,5
Control of Corruption
Political Stability
Rule of law
Government Effectiveness
Voice and Accountability
Competitiveness
ICT Variables
Source: Knowledge for Development WBI
Telephones per 1000
inhabitants
ICT Expenditure as % of
10
main telephonbe lines per
GDP
1.000
8
6
E-Government
Mobile phone per 1.000
4
International
2
telecommunications, cost
Computers per 1.000
0
of call
Internet users per 10.000
Internet hosts per 10,000
Investment in telecom as %
of GDP
TV sets per 1.000
radios per 1.000
Daily newspapers per
1.000
Competitiveness
Education Variables
Source: Knowledge for Development WBI
Adult literacy rate
Univ. Education meets the
10
Average years of schooling
needs of a comp. Economy
well educated people do not
8
Secondary enrollment
emigrate abroad
6
Availability of management
4
Tertiary enrollment
education
2
Extent of staff training
National culture is open to
foreign influence
8th grade achievements in
8thscience
grade achievements in
0
Pupils per teacher
Life expectancy at birth
Flexibility of people to adapt
to new challenges
Public spending on Eduaction
mathematics
as % of GDP
Prof and tech.workers as % of
the labor force
Competitiveness
Innovation Variables
Source: Knowledge for Development WBI
Gross Foreign Direct Investment
High tech exports as % of 10
Royalty and license fees
Patent Applications
manuf.
granted
Exports
by
Royalty
payment
and license fees
8
the USPTO/ mil.pop
payment/mil pop
Patent Applications granted by
Royalty and license fees
6
the USPTO
receipts
4
Royalty and license fees
Availability of Venture Capital
2
receipts/mil. Pop
0
Science and Engineering
Admin. Burden for Start-ups
Enrollment Ratio
Scientific and technical journal
Researchers in R&D
articles/ mil.pop
Scientific and technical journal
Researchers in R&D/ mil.pop
articles
Entrepreneurship
among
Total Expenditure for R&D as %
University-company
research
managers
Manuf. Trade as %ofofGNP
GDP
collaboration
Natioanal System of Innovation
Source: OECD (www.oecd.org), CONICYT (www.conycit.cl)
R&D Indicators
R&D Expenditure
(as % of GDP)
Basic Research
(as % of R&D)
Chile
0.56
55,3
Mexico
0.43
23
Poland
0.54
37
Finland
3.37
Spain
0,75
Country
33
National System of Innovation
Sources: OECD (www.oecd.org), CONICYT (www.conycit.cl)
R&D Expenditure
(% financed by)
Businesss
Government Other
Chile
23,4
64
12,6
Mexico
29,8
59,1
11,1
Poland
31
61,1
7,9
Finland
69,5
26,1
4,4
New Zealand
37,1
46,4
16,5
National System of Innovation
SourceÑ World Bank (2003)
Science and Technology Human Resources
Researchers in R&D/ Science& Engineering
million people
Enrollment Ratio
Chile
418
42
Mexico
226
32
Malaysia
153
27
Poland
1475
28
Finland
7094
39
New Zealand
2174
20
Innovation Policy
1990´s: Market FailureApproach
In 1991 it is launched a first explicit effort to promote innovation in Chile,
through the creation of two funds: FONDEF (that provides grants for S&T
projects, performed by universities or technological institutes) and
FONTEC (that provides grants for R&D projects performed by
companies). They were followed by the establishment of other funds (FDI,
focused in pre-competitive research, FIA for the agricultural sector, etc.).
These funds share the same principles: they are “demand driven” (the
pertinence of a project is based on the willingness of private firms to
perform and to co-finance it); they are horizontal (no sector or technology
is privileged; they provide grants after a strict process of evaluation.
Innovation Policy
1990´s: Market FailureApproach
These initiatives are complemented, on the one hand, by funds that
promote basic research (FONDECYT, FONDAP and Millenium Program)
and on the other, programs that facilitates technology difussion (in
general “soft technologies” especially focused on the small and medium
sized enterprises).
Innovation Policy
1990´s: Market FailureApproach
TECHNOLOGY FUNDS
(thousands of current dollars)
Institution
Programme
1999
2000
2001
2002
2003
11.894
11.929
0
3.958
17.983
6.708
10.821
11.308
0
1.962
14.539
6.334
9.823
12.711
299
2.050
13.179
6.056
9.193
11.868
746
1.350
15.475
6.300
8.196
11.230
1.426
1.838
18.050
6.025
SUBTOTAL
52.473
44.964
44.118
44.932
46.764
CONICYT
Fondo Nacional de Desarrollo Científico y Tecnológico (FONDECYT)
CONICYT
Programas Regionales de Investigación Científica y Tecnológica.
MIDEPLAN
Programa Iniciativa Científica Millenium
38.254
344
32.351
4.430
32.852
6.877
32.240
5.704
30.836
1.506
5.675
SUBTOTAL
38.598
36.781
39.729
37.944
38.016
TOTAL
91.071
81.745
83.847
82.876
84.780
TECHNOLOGY FUNDS
CORFO
Fondo Nacional de Desarrollo Tecnológico y Productivo (FONTEC)
CORFO
Fondo de Desarrollo e Innovación (FDI)
CORFO
Fondo Innovación Tecnológica Bio Bio
SUBPESCA
Fondo de Investigación Pesquera (FIP)
CONICYT
Fondo de Fomento Ciencia y Tecnología (FONDEF)
SUB AGRICULTURA
Fundación para la Innovación Agraria (FIA)
TECHNOLOGY & SCIENTIFICS RESEARCH FUNDS
Source: Undersecretary of Economy, data from DIPRES
Innovation Policy
2000´s : Towards a more comprehensive approach.
Several evaluations have demonstrated de effectiveness and impact of
the funds. However in the late 90´s it became clear that the provision of
financing was not enough to unchain a wider innovative effort in Chile.
Then, a more comprehensive approach was developed, which includes:
• A focused effort to promote crucial technologies: IT, Biotechnologies,
Cleaner Production and Quality. This effort includes not only provision of
grants, but the establishment of integrated policies in each area.
• Promotion of entrepreneurship.
• Foreign Investment Promotion.
• Promotion of patenting.
• Promoting the creation of technology consortia.
Innovation Policy
2000´s : Towards a more comprehensive approach.
Digital Agenda
A set of 34 initiatives whose objective is “to contribute toChile´s
development by using information and communications technologies to
increase competitiveness and improve equity, individual liberties, quality
of life, and public sector efficiency and transparency”.
Areas of activity:
• Widely available access
• Education and Training.
• Online Government
• Digital development for business
• Takeoff of the ICT Industry
•Legal Framework
Innovation Policy
2000´s : Towards a more comprehensive approach.
Biotechnology Policy.
Broad effort that includes passing a new Law for Bio-safety, strengthen
intellectual property rights, personnel training, additional efforts in R&D.
Promotion of Entrepreneurship.
Establishment of business incubators, feasibility studies, seed capital
funds, venture capital funds, etc.
Technology Consortia:
Establishment of assotiative proyects, with participation of groups of
companies and universities or technological institutes.
High Technology Investment Attraction Program: with a main focus in the
software and international services areas.
Innovation Policy
2000´s Structure of the Innovation Government Support System
President
Minister of Education
CONICYT
Fondecyt, Fondef
Universities
Minister of Economy
CORFO:
Fontec, FDI
Technology Institutes
Other Ministries
Innovation Policy
Challenges
In order to recover high rates of growth, Chile has to increase significantly its
innovative effort. A medium-term challenge is to become an economy endowed by
a critical mass of companies that have innovation as a crucial component of
their strategies.
This means to promote simultaneously:
• Innovation around natural resource-based clusters to encourage the emergence
of world class providers of services and equipment.
• To promote domestic entrepreneurship.
• To strengthen the current investment attraction efforts.
But it also demand to overcome the weaknesses of some components of our
National System of Innovation and Policy Framework
Innovation Policy
Challenges
• Build a broad strategic orientation for the innovation policy through an
integrative dialog with key actors (business community, researchers, public sector
authorities, etc.).
• Update the institutional design to overcome the excessive fragmentation of
institutions and policy initiatives. Particularly important is the integration of the
educational policy (especially in its tertiary education component) in to the
innovation policy effort.
• Build coherent responses in neglected policy areas such as technological
diffusion and sustainability of technologycal infrestructure (technology
institutes, metrology labs, etc.).
• Increase the total budget allocation for innovation policy.
• Strengthen the capacities of key institutions, especially in the area of human
resources (quantity and quality).