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Industry and Innovation: To Cite This Article: Rodrigo Arocena & Judith Sutz (2000) : LOOKING AT NATIONAL
Industry and Innovation: To Cite This Article: Rodrigo Arocena & Judith Sutz (2000) : LOOKING AT NATIONAL
LOOKING AT NATIONAL
SYSTEMS OF INNOVATION FROM
THE SOUTH
Rodrigo Arocena & Judith Sutz
Version of record first published: 14 Jul 2010
To cite this article: Rodrigo Arocena & Judith Sutz (2000): LOOKING AT NATIONAL
SYSTEMS OF INNOVATION FROM THE SOUTH, Industry and Innovation, 7:1, 55-75
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Industry and Innovation, Volume 7, Number 1, 55–75, June 2000
The concept of National Systems of Innovation (NSIs) appeared in the late 1980s and
quickly rose to a central position both in academic work and in policy discussions
(Freeman 1987; Freeman and Lundvall 1988; Lundvall 1988). The concept of NSI was
based on empirical work performed in the advanced industrialized countries, i.e. in
the North. However, its applicability is not conned to those countries. In fact the
NSI approach can be useful for studying the specics of innovation processes and
policies in the South, as well, and can draw attention to similarities and differences
from those in the North. But for that the NSI approach needs to be complemented
by a Southern perspective. It is necessary to think with a ‘‘Southern head’’ about
what has been produced in the North concerning the NSI concept; Southern heads
are also needed for adapting such intellectual tools when the situation and possible
futures of a peripheral country are studied.
With a view to contributing to such a discussion, this paper is organized as follows.
We start by briey recalling some of the main themes of the concept of NSI, and
stress some questions that the concept poses. Next we deal with NSIs from a Southern
perspective—more precisely, from a Latin American perspective—stressing those
features of the concept that better illustrate such a perspective. Then we describe a
few of the main contextual differences between Latin America and the developed
countries in terms of the NSI conceptualization. We go on to give an abbreviated
account of recent empirical ndings on the ‘‘really existing innovation’’ in Latin
America and, drawing on those elements, we discuss some specic characteristics of
Latin American NSIs. Then we describe some approaches devised to construct a
picture that helps understanding the innovation dynamics and perspectives in a small
Latin American country, Uruguay. Finally, we offer some concluding remarks as to
what can be learned in the South from systems of innovation in the North.
Those issues are relevant because of the fundamental role that innovation and NSIs
play everywhere nowadays. In fact, statements such as the following are widely
accepted. Innovation is a key factor for competitiveness, at both the business and the
country level. Innovation implies processes of change undertaken by rms that are
affected by a broad set of economic, political, social, cultural, scientic and techno-
logical issues. Many of these issues are direct outcomes of the purposeful action of
1 Paper presented to the DRUID Conference on National Innovation Systems, Industrial Dynamics and Innovation
Policy, Rebild, Denmark, 9–12 June 1999. We acknowledge the comments made by many colleagues, particularly
Franco Malerba, Jorge Niosi, Dieter Ernst and two anonymous referees. We also thank the conference organizers,
Esben Sloth Andersen and Bengt-Ake Lundvall, for their kind invitation to participate.
organizations, public and private (including rms themselves); some of them are
unintended outcomes of organizations not directed primarily towards innovation
problems; some, moreover, are related to the natural endowment and the history of
nations. It is in the general framework or ‘‘climate’’ generated by these issues that
rms decide and undertake innovative activities; framework or climate is both
international and national in scope. Even if globalization heavily affects many —if not
all—of these issues and the overall climate for innovation at country level, there is
always room for ‘‘national inuences’’ that can take the form of public policies—at
macro, meso or micro level—and can also be the outcome of distributed initiatives
coming from the most diverse social actors. Consequently, it is important to analyse
and understand how national inuences on innovation operate nowadays and could
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possibly affect future outcomes. For such reasons, a conceptual framework allowing
for innovation descriptions, interpretations and actions is needed; the notion of
National Systems of Innovation—in any of its many denitions—provides such a
conceptual framework. Moreover, the concept establishes a positive feedback loop:
to strengthen the National System of Innovation is equivalent to improving the
innovative climate and, for that reason, the feasibility of innovations.
Once the political importance of the concept has been recognized, consensus and
agreements begin to weaken. What exactly does it mean to strengthen the National
System of Innovation? And even before that, what is to be taken into account when
describing its main features and when trying to understand its dynamics? Especially
in the 1990s a body of important academic work has been produced analysing this
type of question; as is only to be expected, many points of view are presented, some
of which conict with each other.2
From a policy making point of view, on the other hand, one of the most important
exercises derived from the NSI conceptualization consists of international compar-
isons: What kind of innovation policies are my neighbours, partners, rivals or ‘‘models’’
devising and implementing? Which of these policies could possibly be applied at
home, and at what cost?
Issues as those mentioned in the last three paragraphs require an elaboration that
takes into account the specics of peripheral regions. In that sense, ‘‘innovation from
the South’’ can be envisaged as a research programme, strongly connected with the
rethinking of development problems in the age of globalization, having as a research
agenda a ‘‘broad spectrum’’ of general and specic questions, and with a research
methodology of its own to be able to tackle such an agenda. This article seeks to
make a contribution to the denition of such a research programme.
2 The NSI concept is in a relatively early stage of its ‘‘life cycle’’. Charles Edquist wrote in 1997: ‘‘Systems of
innovation is a new approach to the study of innovations in the economy that has emerged during the last
decade’’ (Edquist 1997: 1). At this early stage, the search for rigorous and precise denitions coexists with room
for exploring connections even if sometimes these are more often derived intuitively than from tested theories of
causation. An example of this type of exploration is the nal remark Morris Teubal made in his article on the
‘‘Innovation System of Israel’’. Referring to the Palestinian question in relation to some of the weaknesses and
failures of the Israeli situation regarding innovation, Teubal wrote: ‘‘The mechanisms are subtle, but as with a lot of
those insinuated in this chapter, they do not seem to be less real’’ (Teubal 1993: 497).
LOOKING AT NSIS FROM THE SOUTH 57
A SOUTHERN PERSPECTIVE
To organize the perspective on Innovation Systems from the South, we start by asking
if the NSI concept refers to existing situations or if it characterizes an ideal and not
yet materialized conguration. When Chris Freeman proposed the term ‘‘National
System of Innovation’’ in 1987, he certainly had in mind a very specic situation,
namely that of Japan. One of the reasons was the importance given to innovation in
a strongly nationalistic strategy. But more distinctive than this seems to have been the
‘‘system’’ part of the NSI; many different things in different parts of the economy and
the society at large appear to behave in accordance with the needs of other parts, as
if many positive feedback loops were operating in a more or less synchronized way.
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3 The opening chapter of the 1988 book edited by Freeman and Lundvall, Small Countries Facing Technological
Revolution, under the explicit title of Small National Systems of Innovation Facing Technological Revolution,
discusses the Nordic countries’ situation in terms of various systems, particularly those of producing, learning,
searching and innovating.
4 Learning has become a key concept, to such an extent as to characterize the key dynamics of present times
(Lundvall and Borras 1997).
5 We are fully aware of the distinction between institutions and organizations, as formulated by North (1990) and
stressed by Edquist (1997) in the search for a common language regarding systems of innovation. Nevertheless, as
both Freeman and Lundvall talked about institutions (even if in the organization sense of the term) we follow that
pattern.
58 INDUSTRY AND INNOVATION
importance of users in the innovation process has also been advanced by other
scholars.6
‘‘ex-ante’’ concept, in the sense that very few patterns of the socio-economic
behaviour regarding innovation at national level can be viewed as working in a
system-like manner. This is not to say that innovation—technical innovation—is
not present in the region.8 The problem is that the micro-innovative strengths
that really exist remain isolated and encapsulated, creating important difculties
for a further process of articulation and aggregation that could be synthesized in
a NSI and create the impact a NSI is supposed to have on the competitiveness of
national economies.
(b) Secondly, it is worth noting that the NSI concept carries a normative weight.
This is perhaps not a universally shared opinion. For instance, Edquist (1997: 20)
writes: ‘‘. . . the notion of optimality is absent from the systems of innovation
approaches. Hence comparisons between an existing system and an ideal system
are not possible.’’ In fact, to postulate the possibility of an optimal design for NSIs
would imply the dismissal of diversity, one of the main characteristic features of
the NSI approach. Now, to discard the ‘‘ideal system’’ does not mean that the
concept has no reference to what is ‘‘good’’ or what is ‘‘bad’’. Lundvall stresses
the fact that the extreme difference in competencies between users and producers
lies behind unsatisfactory innovations or the slow path of innovation adoption,
particularly regarding the modernization of mature industries, like textiles and
clothing. This is not a given fact of nature: he refers approvingly to the way MITI
directed its efforts to modernize these sectors ‘‘as an attempt to compensate for
the weak channels of information between producers and science based indus-
tries, and to break the inertia built into the traditional user–producer relation-
ships’’ (Lundvall, 1985: 37, emphasis in the original). A National System of
6 The work of von Hippel is particularly interesting in this regard. Two of his conclusions or ‘‘syntheses’’ are
particularly valuable: the conceptualization of innovation as a distributed process and the systemic nature of that
distributed process. ‘‘All of the elements in the examples I have just described can be seen as components in a
distributed innovation process that clearly interact in a system-like manner’’ (von Hippel 1988: 121).
7 A good example of empirical evidence that supports the idea of National Systems of Innovation comes, not
surprisingly, from Europe. In the second edition of the Directory edited by the Commission of the European
Communities (1986), more than 400 pages written in small type provided an account of the most diverse type of
incentives, instruments, mechanisms and policies devoted to the fostering of innovation and the creation and use
of knowledge for innovation in the EC countries.
8 We are entitled to use a broad scope to consider innovation, given that in an international comparative study
Nelson and Rosenberg agree to characterize innovation as ‘‘the processes by which rms master and get into
practice product design and manufacturing processes that are new to them, if not to the universe and even to the
nation’’ (Nelson and Rosenberg 1993: 4).
LOOKING AT NSIS FROM THE SOUTH 59
(c) A third point qualies this normative weight. The idea is that the NSI concept is
‘‘relational’’: almost all the literature on the subject stresses the utmost importance
of the connections between different types of collective actors. Thirty years ago,
an Argentinian physicist, Jorge Sabato, proposed an illustration for a ‘‘virtuous
circle’’ able to put science and technology at the service of development: the
‘‘Sabato triangle’’ of entrepreneurs, government and academia. At that time, Sabato
said that no matter how strong each isolated organization was, what was much
more important was the strength of the connections between them: in fact the
triangle exists at all only if the connections are there. This type of ‘‘relational’’
conceptualization is widely adopted nowadays by innovation scholars, but this is
easier said than done: in Latin America, it is a relatively common task to create
organizations to foster innovation, but it is quite difcult to make them operate
as bridges between people. That is why it is worthwhile to underscore the
relational nature of the NSI concept.
(d) A last remark is related to the debate about ‘‘creationism’’ or ‘‘spontaneous
evolution’’ as paths of development for NSIs. It seems rather obvious that there
is not a single answer for this debate; it is easy to nd more ‘‘creationist’’
and more ‘‘evolutionary’’ patterns for systems of innovation when comparisons
between countries, between productive sectors, and even between different
periods within the same country are made. The important point is that, given the
state of development reached by each National System of Innovation, the future
state and dynamic of the system can be at least partially inuenced by purposeful
action. That is, the NSI is a policy subject. This does not mean that the whole
shape of the system can be purposefully designed, nor does it mean that whatever
policy or policy measure devised can be successfully implemented. Recognizing
that the NSI concept is a political concept and that the reality it describes can be
submitted to deliberate policy efforts towards change with a reasonable hope of
achieving what is intended is not a trivial matter, particularly in Latin America,
where science, technology and innovation have never occupied a high position
on the political agenda.
Summing up, when the NSI concept is looked at from the South, four aspects are
seen as essential for working with this approach: it originated in the central countries
as an ex-post concept, while in the periphery it is basically an ex-ante concept; it
carries a normative weight; and is ‘‘relational’’, and nally it can be an object of policy.
60 INDUSTRY AND INNOVATION
this, and from early on in this century; nowadays, the Uruguayan ‘‘innovation
institutional map’’, that is, the set of organizations that include in a way or another
goal related with innovation, is clearly much more dense when observed from the
agrarian side than when this is done from the industrial side, even if the degree of
innovativeness of the ‘‘agrarian system’’ is not particularly high.
sector needs knowledge suited to local conditions, and recognizes, rst, that there is
a need, and second, that local scientic and technological efforts must be undertaken
to t this need. The industrial sector—in Latin America—has not exhibited this type
of understanding. This is in part due to a general trend in developing countries: ‘‘In
general, it has been assumed that industries in developing countries can acquire new
technology fairly easy. For while the problems of transferring agricultural technologies
among countries has been widely recognised, the difculties of transferring industrial
technology have not’’ (Bell and Pavitt 1995: 69). More generally, knowledge was not
an important factor of economic growth in Latin America. We now turn to a brief
historical characterization of that process.
In the decades following 1850 Latin America was incorporated as a ‘‘periphery’’ to
the international economy which had its ‘‘centre’’ in the industrialized countries, thus
starting a period of outward growth based on the exports of primary products. The
ruling elite cared more about imitating the European elite way of life than of fostering
the technological basis of economic growth. Since then a relevant proportion of the
economic surplus has been dedicated to conspicuous consumption and related
imports. And it is hard to nd traces of the technological nationalism that was typical
of the Japanese elite at the same time (Odagiri and Goto 1993). In Latin America this
was also a golden age for foreign capital. It was easier to buy modern productive
methods abroad than to promote endogenous generation of technical knowledge; in
the long run this was perhaps the main drawback of the period of outward growth
(Bethel 1991: 3). The ofcial culture has, historically, marginalized science, except
biomedicine and some other branches of biological sciences, and practically ignored
technology; the ‘‘wedding of science and useful arts’’ that characterized the Second
Industrial Revolution was scarcely noted in this continent.
Nevertheless, the fast growth of some Latin American countries around the turn of
the century opened some opportunities for an incipient industrialization, specially
when it was fostered by the rising consumption capacity of the middle classes. This
was the situation in some regions where European immigration was very important,
as in the basin of the Rõ´o de la Plata and San Paulo. This immigration promoted the
industrial innovation and the industrializing ideology on which economic progress
was based when the world crisis of the 1930s led Latin America into a period of
inward growth fostered by the Industrialization by Import Substitution (IIS). This was
the main period of development in Latin American contemporary history: roughly
between 1940 and 1980
62 INDUSTRY AND INNOVATION
traditional elite fought against the IIS policies and a cultural disregard of technology
prevailed. Consequently, although the states protected national industries, protection-
ism was not selective nor oriented to ‘‘learning’’; generally speaking the states did not
back rmly the upgrading of technological capacities and industrial activities in order
to reach the level that is needed for the production of means of production. The
result was ‘‘the truncated industrialisation of Latin America’’, as it is described in a
fundamental but widely ignored book (Fajnzylber 1983).
It must be stressed that during the IIS period, technological innovation probably
took place throughout the continent in a wider scale than after 1980 (Katz 1994).
But, as suggested by the former considerations, it was highly informal and of an
incremental or minor type. In Latin America, technological innovation has been
undervalued by dominant cultural patterns, scarcely studied by mainstream develop-
ment economists, and almost ignored by public policies; thus, it was and still is a
phenomenon of ‘‘interstitial’’ nature. When we use this word we are thinking of the
characterization due to Michael Mann (1986: 15–16) of the interstitial emergence of
new processes between the ‘‘pores’’ of institutionalized networks of social interaction.
Something similar happened with endogenous generation of scientic and techno-
logical knowledge. Technical change consisted overwhelmingly of imports of capital
goods; as Celso Furtado stressed 30 years ago, the ‘‘peripheral condition’’ was
fundamentally related to the ‘‘technological dependence’’ from the ‘‘centre’’. It still is.
The East Asian experiences regarding knowledge, learning and innovation could
not be more contrasting from the one just depicted. These experiences are well
known (Johnson 1982; Amsden 1989; Hou and Gee 1993; Kim 1997). Less known is
how were they presented, particularly by nancial international institutions, as a
model for Latin American development: without a word about knowledge and
education, the transmitted recipe was the total opening of the economy, the reduction
of public intervention and the massive foreign investment (Fajnzylber 1983: 80).
However, the East Asian policies—especially the way of coming to grips with the
knowledge produced wherever, the emphasis on the most ample reach of education
at all levels, the constant raising of R&D spending and the institutional setting to
pursue technology upgrading and innovation were thoroughly studied by Latin
American scholars. One of the important points of comparisons referred to the
industrial protection issue: in the words of Fajnzylber, while the Latin American
protection was a ‘‘frivolous’’ one, the East Asian policies were ‘‘a careful, selective
LOOKING AT NSIS FROM THE SOUTH 63
and lucid protection directed to the national industry process of learning’’ (Fajnzylber
1983: 116, our translation).
Looking back to the main period of growth from the point of view of Sabato’s
triangle of entrepreneurs, government and academia, we may conclude that only the
‘‘segment’’ State–Industrial Sector really existed, with those connected with academia
being mainly virtual. In some sense, the interactions between state and industrial
entrepreneurs were ‘‘systemic’’, and undoubtedly they had a ‘‘national’’ focus. The
state was seen as the main actor involved in national development, and development
was equated with industrialization; a public infrastructure was built and national
private industry was highly protected; in such context entrepreneurs carried on the
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IIS, incorporated new technology mainly by buying machinery abroad and asked for
more protection from the state. The relationship between the state and the industrial
sector was important, but it was not focused on innovation.
So at most we can think of ‘‘National Systems of Industrial Growth’’. Strictly
speaking, during the fast industrialization period, in Latin America NSIs were not built.
innovative rms within each country sample. They are also diverse, but in all
the surveys the core of this question has been addressed through the internal
R&D activities. The Colombian analysis concludes that for the innovative rms
in their sample ‘‘the implementation of R&D projects is the most important
element in the innovative process’’ (Durán et al. 1998: 89). This is a fairly
common pattern and that is why analysing how Latin American industrial rms
perform R&D becomes a central element for the study of the really existing
innovation.
(iii) The main conclusion we get from the surveys is that industrial innovation in
Latin America is still highly informal. That is, even if a fair proportion of industrial
rms perform both product and process innovation, R&D activities are not
clearly and formally articulated with the enterprise strategy. We can use two
indicators to support the above statement. The rst is the difference between
rms declaring innovative activities and rms reporting formal R&D departments
or laboratories; the second one is the percentage of rms that report doing R&D
and also know how much they spend on those activities (Table 2). As for
spending, in Argentina about 25% of rms were able to declare the amount of
TABLE 2: FIRMS WITH INNOVATIVE ACTIVITIES AND FIRMS WITH FORMAL R&D
LABORATORIES AS A PERCENTAGE OF THE ENTIRE FIRMS IN EACH SAMPLE
Source: INDEC, Argentina (1998); Dto. Nal. de Planeacion, Colombia (1988); Conacyt,
Mexico (1998); CONICIT, Venezuela (1998); Argenti et al., Uruguay (1988).
LOOKING AT NSIS FROM THE SOUTH 65
clear in all the surveys. In the Colombian case, for instance, ‘‘the most striking
relationship (between variables) indicates that the more qualied the staff the
more innovative the rms’’. Moreover, ‘‘the only indicators related to level of
innovativeness, besides size, are the number of qualied personnel and their
salaries’’ (Durán et al. 1998: 57). In Uruguay the analysis gave a similar outcome:
the statistical correlation between level of innovativeness and number of engin-
eers was highly signicant.
(vi) That rms need qualied personnel to be able to innovate may not seem a very
unexpected result, but nevertheless it is surprising how accurately this fact can
be revealed by empirical ndings. Table 3 clearly shows that from 50 employees
upward there is a sharp drop in the average number of high level technical staff
when passing from the rst level to the second level of innovativeness, while
for the smallest rms this drop is very small. This suggests that there is indeed
a minimal threshold under which innovation is almost not attainable.13
(vii) That trend points to a difcult situation for Latin American small enterprises in
the globalized, knowledge-based and innovation driven economy. But perhaps
this is a premature conclusion: there are technical advice and research capabili-
ties outside firms that could be mobilized to overcome the innovative weakness
of such rms. The data from innovation surveys suggest that this is hardly the
case, for in most countries the utilization of external technical advice by small
rms is well below 30%. On the other hand, case studies on university–enterprise
relationships show that the bulk of these relationships are established between
university trained employees and faculty colleagues (Hein et al. 1996); even to
know what to ask and how to ask it, some level of training is necessary. It is
more than possible, then, that the small rms asking for advice detected in the
surveys are not precisely the ones that need to compensate their technical
weakness through external help.
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The assertions outlined above are the main conclusions that can be established
when comparing the ‘‘innovation part’’ of industrial innovation surveys in Latin
America. Nevertheless, there is one more aspect that can be compared, namely, the
‘‘innovation system part’’ of the surveys. This part gathers information about the
organizations with which rms interact in the innovation process and will be briey
addressed in the next section.
much too general view to build a thorough picture of national situations regarding
innovation, so national case studies are indispensable. Now as previously noted,
surveys can be compared even if they do not include exactly the same questions, but
it is more difcult to make comparative analysis with case studies, if they are not
based on a previously agreed upon methodology, because often the main issues under
consideration and even some basic denitions are not the same.
Specically, when analysing the question if NSIs really exist in given countries, it is
necessary to decide what exactly will be studied in order to obtain sufciently
accurate answers. The idea is to focus the attention on different issues, each one able
to shed light on an important aspect related to innovation, be it in the present or in
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a prospective view, and then try to combine what is seen from those different points
of view in a global picture of the innovation landscape.
National Systems of Innovation are ‘‘endlessly in the making’’. Two factors are
always broadening their scope in the midst of the dynamics of the system: variety
and interdependency. That means that new actors, new functions and new inter-
relations are always appearing and changing. When some actors, some functions and
some interdependencies are missing, the co-evolution of them, which is at the very
centre of the dynamics of transformation, gets blocked. The combination of different
approaches points, rst, to the identication of the variety of the system; the systemic
character of the ensemble of innovation related processes can be thus estimated
by the degree of interdependency between the aspects brought about by such
combination.
We are sketching a type of NSI analysis that starts by dening, in the case or cases
under consideration, which elements should be specically studied in order to
construct with them a global picture. In the following an example is presented.
respect are the ‘‘high-tech’’ sectors, like electronics, software and biotechnology.
In the case of electronics, for instance, where a direct exports strategy has been
very difcult to implement, an ‘‘internal market’’ strategy related to the solving
problems needs of different exporting rms was put forward, based on the good
capabilities of the Uruguay electronic rms to give creative answers to those
needs.
(ii) The relations between rms and knowledge production institutions is a key
aspect of the innovative landscape. Moreover, the educational/skill/research
situation is fundamental to understand the dynamics of such relations and its
possible evolution. ‘‘Research relations’’ between rms and university teams have
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been only recently fostered by university policies: it is not surprising then that
the bulk of the demand for such policies came from the agronomic sector, which
has the strongest tradition of relationships with private productive sectors. The
engineering faculty, that exhibits a good record of relationships with state
enterprises and ministries—particularly electric power, telecommunication and
transportation and public construction—is entering slowly into systematic
research interactions with private rms.15 The Uruguayan research system pre-
sents several worrying problems, many of them issued from the low level of
spending. One of the consequences, derived from low salaries and poor research
infrastructure, is the migration trend of the best trained —the ‘‘brain drain’’
phenomenon—that recent research has shown not to have diminished during
the 1990s, quite the contrary, in all Latin America (Massey et al. 1998).
(iii) Through the third approach, the whole set of public and private institutions
related in one way or another with innovation is identied and some of its
characteristics are studied. In this way, an ‘‘institutional map’’ for innovation is
constructed. A key question concerning each institution is the ensemble of
national institutions with which it maintains some type of working relations: in
Uruguay, the only public university was the institution most frequently mentioned
in this respect. The vast majority of the institutions were mentioned only by two
or three other institutions, showing a low degree of connectivity for the whole
map, or, in other words, a rather isolated institutional setting.
(iv) Inspired by the user–producer interaction conceptualization, the ‘‘innovative
circuits’’ approach consists of the identication and analysis of situations in
which: (1) pressing problems of production were solved by the encounter of
actors having the problem with ‘‘knowledge’’ actors, be they faculty teams,
public laboratories or high-tech rms, and (2) the learning process led to research
on related problems, in a sort of growing spiral. These situations, studied at the
micro level, are very instructive concerning the reasons why these type of
encounters take place, the type of difculties that appear once the dialogues
began, the ways in which they were mastered and, particularly, how the diffusion
processes of the related innovations occur—if they occur at all.
15 Regarding the educational/skill/research situation, Uruguay is a country with a relatively high proportion of its
corresponding age group going into third level education (29.4%), while countries like Mexico and Brazil only
has 16.1 and 11.7%, respectively, in the same situation; nevertheless this gure is not at all high when compared
with South Korea, which has a corresponding gure of 60.3% (L’Etat du Monde 2000).
70 INDUSTRY AND INNOVATION
The diffusion process is central to this approach, for the very idea of an
innovative circuit is associated with the spread out of the innovation to other
rms or even other productive sectors; it is also associated with the upgrading
of the capabilities to solve problems, for example by using the accumulated
knowledge derived from the obtained innovation to go further in more sophisti-
cated technological directions. An interesting innovative circuit detected in
Uruguay was developed around the foot and mouth disease, relating cattle
producers and a biotechnology laboratory; others have developed around prob-
lems solved through automation, microelectronics and molecular biology. Barriers
to the diffusion of many of these innovations were seen as a major problem. On
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the other hand, there are sufcient success stories of industrial technical innova-
tion (related to problems that are ‘‘country specic’’, in the same sense as
agrarian problems) to support the idea that an innovation policy makes sense.
(v) The collective visions approach was based on a national opinion survey and a
Delfos type prospective exercise. The survey posed several questions concerning
research, innovation, competitiveness and the future of the country. For example:
does research stimulate economic growth, damage the environment, improve
the quality of life, promote unemployment, contribute to the export capacity of
the country, foster dependence from abroad? Answers were related to several
features of the respondents: age, socio-economic level, education, ideological
self-identication, etc. A huge amount of information was collected. In order to
be very brief, we shall point out only two particularly interesting results. One
that surprised experts was that a majority believes that research widens the
dependency of the country from abroad; analysing age, educational level, or
place of residence, we arrived at the following conclusion. Those persons who
are only slightly acquainted with the small but important research effort that has
been carried on in Uruguay since the end of the dictatorship, in 1985, answer
the question thinking primarily of ‘‘foreign science’’, and so they assume that it
widens the dependence of the country. On the contrary, more informed people
think in terms of ‘‘national science’’ and so have a different opinion. People were
also asked to choose between three ‘‘policy alternatives’’. These were: (1)
Uruguay can and must do research with public funds, because benets will be
greater than costs; (2) Uruguay can do successful research but must not do it,
because costs will be greater; (3) Uruguay cannot do successful research; 55%
of the population chose the rst alternative. Combining these results with other
information, and remembering that national research has been historically a
marginal activity in the country, with a small contribution to the quality of life,
we may conclude that there exists a strong social basis for the promotion of
science and technology—provided it is carried on in a way that does not neglect
some main concerns of the citizenry.
The Delfos exercise considered the opinions, on several subjects, of 60
persons: high public ofcials, relevant politicians of the main political parties,
entrepreneurs, trade unionists, economists and other academicians and inter-
national experts. Some kind of collective opinion emerged that stressed that this
small peripheral country can and should point to a new model of development,
LOOKING AT NSIS FROM THE SOUTH 71
people, rather than being hostile to research, think that the country should make an
effort in that direction. Weak institutional settings isolate and discourage innovation
initiatives. While there is only weak support for improving the country’s innovative
climate from the elite, there is also weak demand from the productive sector for
endogenously generated knowledge and innovation.
NSIS IN THE SOUTH: SOME LESSONS THAT CAN BE LEARNED FROM THE
NORTH
The innovation surveys analysis and the case study presented in this paper suggest
that, in general, Latin American NSIs are weak indeed. The reasons that they are weak
cannot be limited to failures within the components of the system: the social and
economic value historically assigned to endogenously generated knowledge and
innovation are explanations at least as powerful. The question is then: value assigned
by whom? As the Uruguayan case shows, there is not a unanimous ‘‘social subject’’
that speaks for the whole society: common people, technicians, elite, government
ofcers, have different perceptions on the matter. It seems that in the developed
countries, the picture we get of rather strong NSIs is the outcome of a widespread
social consensus on the economic and political importance of the nation related
capacities. The complex sets of organizations, relationships and beliefs that the term
NSI tries to capture have a macro policy expression, the innovation policies. These
polices provide for the integration of ‘‘weak actors’’, like small and medium enterprises,
into a more active innovative climate, thus expanding the social consensus. This is
not to say that there are no conicts: universities resent the push towards a more
entrepreneurial spirit and workers discuss how to share the social costs of the jobless
growth issued from actual technical progress. But there is still a strong consensus
about the importance of knowledge and innovation both for the identity and for the
future of the nation.
In this sense, to the four ‘‘Southern headed’’ remarks made at the beginning
regarding the NSI conceptualization—that is, its ex-post, normative and relational
character, and the fact that it is subject to purposeful action— must be added a
fth; its consensual nature regarding the social legitimization of knowledge and
innovation national efforts. This is not at all the case in Latin America, where ‘‘to
adapt and to learn by using’’ and ‘‘to develop endogenous technology’’ are more often
than not presented as contradictory rather than complementary, as they really are.
72 INDUSTRY AND INNOVATION
This false dichotomy is not without consequences, for it undermines the consensus
around the necessity to seriously perform scientic and technological research at
national level.
These remarks can be seen as ‘‘distances’’ between the Southern and the developed
situation in terms of their NSIs. In the rst place, those distances warn against
importing ‘‘turn-key’’ institutions and policies. The evolution of NSIs in developed
countries shows plenty of examples of successful copying and ‘‘importing’’ institu-
tions. That is not always the case when ‘‘Northern’’ institutions are copied in the
South: since the tacit assumptions about the framework in which the institutions
must operate are seldom true, the copy often generates an institution with the same
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name but with different real functions, or with no function at all. It is not surprising,
then, that importing generates a quite inefcient array of institutions.
But those ‘‘distances’’ also suggest some lessons that can be learned from the North;
perhaps the most promising are related to the ‘‘purposeful action’’ issue. They can be
summarized as follows:
(i) innovation policies are indeed a tool in the shaping of NSIs;
(ii) innovation policies are articulating devices;
(iii) success is dependent on taking into account an actor’s perspective when
designing interventions, that is, having in mind the interests, needs and possibili-
ties of the different actors of the innovation interplay.
These orientations for innovative actions, if applied in a systematic way, and with due
attention to the specic problems and strengths of each ‘‘Southern’’ country, would
be surely more effective than the extended practice, so common in Latin America, of
copying the form regardless of the specic problems at stake and the real context in
which they appear.
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