Towards Innovation in Colombia

At the end of last January, Bloomberg presented its world innovation index by country, a study it performs every year since 2013 to measure the technological development and capacity of each country to innovate. To arrive at the final score, dozens of indicators are used, which include spending in development, manufacturing capacity, the concentration of public companies in technology development, and activity related to patent registration.

Germany recovered the first place ahead of South Korea, who was second after 3 years as leader. Next came Singapore, Switzerland, Sweden, and Israel. Among the first 60 countries, only Argentina, in 45th place (climbing 5 positions this year) and Chile, in 51st place (climbing 7 positions this year), represent Latin America.

Countries in leading positions are not particularly rich in raw materials, and some of them don´t even have an industrial tradition dating back many years; what can be highlighted is that all leading countries are those that invest an elevated percentage of their annual budget in education, with special emphasis in the scientific and technological areas. This places them in a privileged position to develop innovative talent that feeds public and private companies.

If we specifically look at the number of patents recorded in each country by national titleholders, and R&D spending as GDP %, there is a clear correlation between these two concepts and the country’s per capital income and economic development. According to data from the World Bank, countries that lead the Bloomberg innovation index spend between 4.5% (Israel and South Korea) and 3.04% (Germany) of their GDP in R&D. If we observe the patent requests by national titleholders, in 2018 Germany had more than 46,000 patent requests and South Korea had a staggering 162,000 requests.

In Colombia´s case, we find ourselves in an economy that is mainly moved by the extraction of raw materials, agricultural production, and citizenship consumption. According to the same data provided by the World Bank, R&D spending is only 0.24% of GDP. With respect to patent requests, in 2019, nationals requested 423 patents in comparison to 1,732 requested by foreigners, an indication that the majority of the innovation that arrives to our market comes from abroad. The Universidad Nacional (13), Universidad Industrial de Santander (11), and Universidad EAFIT (10), were the national entities to which the majority of patents were granted. The first company in the list was Ecopetrol, with 7 patents granted. However, foreign companies obtained significantly higher numbers, with chips manufacturer Qualcomm heading the list with 34 patents, followed by SCA Hygiene Products and pharmaceutical Roche with 28 each.

Notwithstanding the above, there are highly relevant patent cases in Colombia, such as the one granted to Universidad del Cauca, for a disposable and biodegradable material made from yuca flour and fique fiber. This material is used to manufacture plates, recipients, and food containers, something that is completely aligned with the current trend to use less plastic and more environmentally friendly products.

Also related to technology, we have very good innovation examples. Rappi, founded in Bogota in 2015 by 3 Colombian entrepreneurs, is an application to home-deliver any type of product and service, and is now a giant with more than 1,500 employees, operations in Mexico, Costa Rica, Brazil, Ecuador, Uruguay, Argentina, Chile, and Peru, and market valuation above 1 billion dollars.

With this information, the only thing left to do is request the Government and business leaders to create plans and programs to promote investment in education, research, and innovation. Innovating talent is there, but it needs public entities and structures to be developed. There is no doubt in my mind that the country will be grateful further on, in view of the economic development information that will be obtained.

Eduardo Hierro
Finance and Technology Manager – Partner MY BRAND