José Urquizo MaggiaMinistry of Production of Peru

XIII UNCTAD INNOVATION ANDTECHNOLOGY DAY

CHALLENGES, PUBLIC POLICY, PROPOSALS AND ACHIEVEMENTS OF INNOVATION IN PERU 

SUMMARY

•Competitiveness and FTA

•Challenges for innovation1.Heterogeneity and tradition

2.Productive inclusion and decentralization

3.Closing poverty gaps

4.Training of human resources

5.Diversifying production and exports

6.Overcoming productivity gaps

7.Speeding up innovation upgrade• Proposals

and achievements

Porter

PRODUCTIVITY AND GROWTH

PRODUCTIVEINCLUSION

ENVIRONMENTAL SUSTAINABILITY

“…Competitive advantage comes mainly from improvement, innovation and change "

COMPETITIVENESS

INNOVATION

QUALITY

ASSOCIATIVITY

GLOBAL INSERTION

…Opportunity and challenge ...3 BILLION POTENTIAL CUSTOMERS

European Union

MERCOSURAustralia

TPP - APEC

SINGAPUR

CHILE

CHINA

MERCOSUR

EUROPEAN UNION

EFTA

ANDEAN COMMUNI

TY

CANADA

UNITED STATES

After more than 10 years of growth higher than 6% per annum, Peru has improved its competitiveness position

* Source: WEF Global Competitiveness Report

... But if we look closer there are challenges that concern us

WEF Location  competitiveness rankings Peru and Latin America, 2008 and 2011

2008 20110

20

40

60

80

10083

67

86 88

PeruLatin Ame-rica

1 = Best

PUBLIC POLICY CHALLENGES OF INNOVATION IN

PERU

XIII UNCTAD INNOVATION ANDTECHNOLOGY DAY

CHALLENGE 1. Overcoming Technological Heterogeneity + Inclusion of traditional knowledge and biodiversity wealth

LandMachinery

Knowledage

Agriculture Revolution

First Industrial Revolution

Information

Society

Knowledge Revolution

Information

Strategic factors of

competitivenessManufactoring

MindfactoringICT’s

BiotechnologyNanotechnology

CHALLENGE 2. Decentralization and diversification of regional production

Source: SUNAT – Registro RUC 2011

Lima Otras Regiones0%

10%

20%

30%

40%

50%

60%

Percentage of total manufacturing firms

Total Manufacturing Enterprises:

136,129 = 55% in Lima accounts for 14.8% of GDP

55% 45%

Others Regions

(31.3%)(48.7%)(54.8%)

Source: INEI.

... poverty has declined over time  ...But there are still pending issues

CHALLENGE 3. Reduce poverty and competitiveness gaps between regions

17.64

21.36

23.17

23.54

24.42

25.18

25.7

27.15

27.22

29.8

31.66

32.68

32.99

33.01

33.16

35.46

36.64

40.45

41.27

41.4

42.63

44.49

45.32

73.57

0 10 20 30 40 50 60 70 80

Huancavelica

Apurimac

Cajamarca

Ayacucho

Amazonas

San Martin

Huanuco

Ucayali

Puno

Pasco

Junin

Madre de Dios

Loreto

Ancash

Cusco

Tumbes

Piura

Moquegua

Tacna

Lambayeque

La Libertad

Ica

Arequipa

Lima y Callao

Source: Centrum Católica

COMPETITIVENESS - REGIONAL INDEX 2010

The two poorest regions are the least competitiv

e

Innovation can reduce economic

and social problems

CHALLENGE 4. Promote human capital formation to generate value added

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Ingeniería y c ienciasnaturales

Medicina y biología Leyes, ciencias socialesy humanidades

Otros

1972

1993

2007

Source: INEI National Censum1972, 1993, 2007 (CEPLAN 2009)

Professionals according to field (%)

Engineering and Science

Medicine and Biology

Laws, Social Sciences and Humanities

Others

CHALLENGE 5. Diversify the composition of output

Source: INEI, BCR

% in Peruvian currency at constant 1994 prices

8%1%

7%

15%

2%

5%

14%

38%

10%

2005Agriculture Fishing MiningManufacturing Electricity and Water ConstructionCommerce Others Services Taxes

7% 0.4%

5%15%

2%

7%

15%

39%

10%

2011Agriculture Fishing Mining

Manufacturing Electricity and Water Construction

Commerce Others Services Taxes

Minning

69.3%

Agriculture

and Fores-try4.5%

Fisherie

s6.8%

Textiles

4.3%

Chemi-cals3.6%

Metalurgy

and Jewerly2.4%

Others9.1%

Exports structure in Peru2011 (46,270 MM)

CHALLENGE 5. Diversifing the export supply

Minning53.0%

Agriculture and Forestry

5.7%Fisheries13.8%

Tex-tiles11.1%

Chemicals2.7%

Met-alurgy and Jew-erly6.7%

Oth-ers

7.0%

Exports structure in Peru1990 (USD 3,280 MM)

Source: BCRP, SUNAT.

CHALLENGE 6.  Increase business productivity and reduce the gap between Small, Medium and Large Enterprise

Source: FOROMIC (2009).

10

20

30

40

50

60

03 6 9 12 15

Sale

s /

work

er(

thousa

nd U

S$

)

Employment (millons)

Microenterprises

3,150 USD

Small Enterprises 8,000 USD

Medium Enterprises

27,000 USD

Large Enterprises

48,000 USD

INNOVATION Brasil Chile Colombia México Argentin

a Perú

General 44 46 57 63 78 113

Entorno favorable

Competencia 132 23 128 103 141 59

Calidad de la educación matemática y de la ciencia 127 87 83 126 113 135

Calidad del sistema educativo 115 124 72 107 86 128

Uso de las TIC 63 56 78 73 55 82

Gasto del Gobierno en tecnología 52 47 45 75 127 98

Protección de la Propiedad Intelectual 84 63 86 85 128 122

Disponibilidad del capital de riesgo 52 34 49 78 129 38

Inversión

Gasto de las compañías en I+D 30 60 76 79 72 118Calidad de los científicos en las instituciones de investigación

42 51 69 54 41 109

Colaboración entre Universidad- Industria en I+D 38 44 43 45 48 103

Disponibilidad de Científicos e Ingenieros 91 29 77 86 75 102

Desempeño

Capacidad de innovación 31 66 59 76 77 99

Patentes utilizadas por millón de habitantes 60 53 76 58 55 83

CHALLENGE 7. Enhance innovation

Ranking of competitiveness: Innovation

Source: The Global Competitiveness Report 2011-2012.

1 = Best

PUBLIC POLICY PROPOSALS and

ACHIEVEMENTS FOR INNOVATION IN PERU

XIII UNCTAD INNOVATION ANDTECHNOLOGY DAY

SEVEN STRATEGIC PILLARS:

1. SCIENCE, TECHNOLOGY & INNOVATION

2. BUSINESS DEVELOPMENT, QUALITY & PRODUCTIVE TRAINING

3. INTERNATIONALIZATION

4. INFRAESTRUCTURE

5. INFORMATION AND COMUNICATION TECHNOLOGIES

6. FACILITATE BUSSINES ACTIVITIES

7. ENVIROMENTAL SUSTAINABILITY

COMPETITIVENESS AGENDA 2012 – 2013 February 9th, 2012

1. To invest in innovation (processes, products, services and new organizational arrangements). De 0,15% a 0,7% en 2016

2. To establish a multisectoral institutional framework to foster the development of Science, Technology and Innovation (STI). Sept,2012

3. To support industries to diversify production and promote new industries, generate more value added using traditional technologies and adopting new ones CITEs and FUNDS

4. To decentralize the productive structure and close productivity gaps

5. To promote the formation and improvement of human capital and more participation of the private sector in STI

¿ WHAT HAS PERU PROPOSED TO DO?

PROPOSAL 1 : Investment on R & D.GOAL: 0,7% del GDP- Regional average 0.6%

Source; CEPAL.

INVESTMENT ON RESEARCH AND DEVELOPMENT(2006)

Infrastructure and

Logistics

Technical and Professional Education

Innovation and

Quality

Market Orientati

on

PROPOSAL 2: INNOVATION AS A MULTI SECTOR RESPONSIBILITY. Institutional framework to link knowledge and technology to businesses

Purpose: Access to technology and promotion of innovation

Agents for Technological Transfer between enterprises and R&D institutions

Active presence of the private sector at the managerial level

Integrated in a NETWORK - RED de CITEs

Link between knowledge generation and productive activities

Strategic partner of enterprises

GOOD PERUVIAN PRACTICES TO PROMOTE INNOVATION

Innovation Technological Centers -

CITEs

www.cites.pe

Tacna: CITEagroindustrial

Piura: CITEAgroindustrial

Cajamarca: CITEminero

Loreto: CITEfrutas tropicales y plantas medicinales.CITEforestal

Arequipa: CITEconfeccionesCITEagrondustrial CITEindustria textil camélidos IPACCITEagroalimentario de Majes

San Martin: CITEcacao

Pucallpa: U.T CITEmadera

Lima:CITEmadera: Mueble CITEccal: Cuero-CalzadoCITEmetalmecánicoCITElogistico GS1CITEsoftwareCITEmarketing

Operatingin process

Promote regional development, productive value chains and competitive clusters Ica:

CITEvid

Network of CITEs according to the descentralization process

Lab testing

R&D+i projects

Promote the use of standards

Product Development and Design

Technical information

and Technological

watch

Training

Technical Assistance

Quality System

Pilot Plants

Market driven value chain

Logistics management and ITC

ROLE AND SERVICES OF CITES

ENTERPRISES &

MARKETS

Innovation

R&D+i

Technological Transfer

Productivity and Quality

improvement

QUALITY AND STANDARDIZATION FOR FREE TRADE AGREEMENTS COMMITMENTS

CITEs are part of Technical Standards ComiteesBesides, CITEs run labs to test for norms compiance e.g.:

Wood and furniture (CITEmadera).

Footwear and leather (CITEccal; ISO17025).

Pisco, wine, wineyard and grape(CITEvid; ISO17025).

Alpaca fiber - textile (CITEtextil de camélidos IPAC)- Arequipa.

R&D+i standards ( OTCITs).

GOOD PERUVIAN PRACTICES

Funds forInnovation

Co-financingCooperating to compete

PRODUCTIVITY AND COSTS QUALITY AND SAFETY DESIGN AND PACKAGING

QUALITY AND SAFETY STANDARDS

VOLUME DESIGN MARKET PRICES

Innovation funds

MARKEt

PRODUCERS, ORGANIZATIONS

& ENTREPRENEURS

TECHNOLOGY PARTNERS 

Technological Innovation

COMPETITIVENESS

SCIENCE AND TECHNOLOGY FUNDS

FINCYT I ( 2008-2012)36 million US dollars IDB Nº 1663/OC-PE

Funds granted since 2010:

US$ 62´000,000

Financing up to 75% of 2 different kinds of proyects

FINCYT II ( 2012-2015)100 million US dollars. Start : 2nd Half 2012

XIII UNCTAD INNOVATION ANDTECHNOLOGY DAY

Competitiveness ranking 2011: 67

Global Innovation Ranking 2011: 113

634 Patents4,965 researchers

2021 GOALSCompetitiveness ranking

2021: 40 Global Innovation Ranking

2021: 706,000 Patents

20,000 Researchers

THANKS

… Future depends on all of us

INNOVATION AND TECHNOLOGY DAY

José Urquizo MaggiaMinistry of Production - Peru