The State of Innovation in Latin America

The advent of the knowledge society has highlighted the growing importance of innovation and intellectual assets as sources of competitiveness and long-term economic growth. Promoting the progress of innovation in Latin America is a key priority in order to increase economic prosperity to the region. Despite its importance, however, the region is struggling to bring innovation to the forefront. Five indicators are used to show how innovation is stagnating in Latin America: R&D investment levels, investment in innovation and knowledge-based capital, patent outputs per year, the institutional environment, and innovation management. Through these lenses, I also propose policy changes and structural reforms needed to promote innovation and elevate Latin American countries out of the middle-income trap.