Why Uruguay has the potential to be a benchmark in innovation

"We would like that when people think of Uruguay, they think of innovation," Flavio Caiafa, president of the National Agency for Research and Innovation (ANII), told El Observador. "As an Agency our mission is to make science and innovation key factors for the country's economic growth, social development and sustainability: this is the mission we set out in the board of directors. We want to position Uruguay as a synonym for innovation in the region and as a platform to innovate and grow from the region to the world and vice versa".

And he is not the only one who thinks like him. For Juan Ciapessoni, director of the Uruguayan Chamber of Information Technology (CUTI) and founder and Head of Innovation of The Electric Factory (THEF), among other projects, "Uruguay has everything to be an elite and model country in the world".

According to the multientrepreneur, "things are ready at local and international level for Uruguay to do, propose and innovate", but it is necessary to work more on the strategic, the emotional, to realize these favorable conditions and "believe it", to slowly see great changes and incorporate innovation in a natural way in organizations and people. "We have to be ahead all the time to become a role model, the country where things happen," says Ciapessoni.

Political stability (regardless of the governing party), legal certainty, a commitment to innovation, good connectivity, among others, are some of the conditions to which specialists refer and which are often taken for granted, but which other countries in the region do not have.

In addition, Uruguay has another advantage: a small size that makes it a good "laboratory" to test products, services and innovations, with potential for growth and scalability. "It is increasingly important to test, try and analyze markets and innovations in small-scale reduced environments in order to later scale them globally", says Ciapessoni, and in this sense Uruguay has proven to be a good "guinea pig" in recent years.

For Caiafa, innovation in Uruguay is at an "excellent moment", and businessmen, entrepreneurs and even scientists understand that innovation and entrepreneurship are necessary to grow, but also to survive. "Before innovation was something optional, today without innovation there is no productive sector that can survive."

More traditional sectors such as agribusiness are the ones that innovate, research and undertake the most (and also export the most), followed by emerging sectors such as information and communication technologies (ICT) and biotechnology.

In addition to supporting this type of sectors, the Agency is also interested in promoting innovation in industries that seem to be "lagging behind" or traditional, so that they can be reconverted.

An example given by Caiafa is that of the company Azurcalito, which, in a mature and consolidated industry such as the sugar industry but with few growth prospects, managed through research and the reconversion of its plant to start producing liquid sugar as a product for export, a syrup with which most soft drinks and packaged food are sweetened.

A question of spirit

As to whether companies are willing to invest in innovation, experts agree that "there is a bit of everything". "In my environment, the leader who was already innovating did not stop innovating because of the pandemic", said Emilio Oteiza, consultant and innovation instructor and professor in the Master's Degree in Marketing at the UCU Business School, in an interview with El Observador. In his company DVL, he has been advising on innovation for more than 15 years and he says that 2020, in terms of consulting, was his best year.

In this pandemic year he detected three needs in his clients when it comes to innovation: in the creation of new products and services, in the improvement of existing products and services and in opening new lines of business. "But nobody tells you, 'bring me innovation', just as nobody tells you 'bring me digital transformation', they tell you, for example, 'my business is very frugal and I want to do a kind of counter-business'," explains Oteiza.

Innovation, says the specialist, is a means to a specific business end, which can be anything from generating a new source of turnover or keeping the company relevant in the market, to an organizational development end, which involves innovating processes to improve the working environment or the motivation of the board of directors. "It's not all about money, in the same way that people are not in charge of organizations just for the money, there is a whole emotional commitment behind it. When you get into innovation, you are trying to build a future for people," he stresses.

Companies that are immersed in an international value chain necessarily have to innovate to maintain their competitiveness and are the most willing to do so, but there are also smaller companies that bet on innovating in the local market, according to the expert. "I have SME clients that what they do with me is innovation in business development or improvement of their business models and development of multiple billing lines. Even if you are in a small local market, you still need to innovate in order to survive and prosper," he says.

In the case of the ANII, where companies and projects approach in search of funds or support to innovate, the big question is who to help. "It is a doubt that we always have as a promotion agency about who we have to support, since there are two schools of thought: one that says that we should support the most innovative ones, because they will lead the way for the others, and the other that says we should support the others, because the most innovative ones will innovate just the same. The truth is that we still haven't decided which is best", admits Caiafa, although he personally believes that we must support innovators who are passionate about what they do, because "if there is no passion, no matter how much money you put into it, it is difficult, because all these paths are complex and laborious", he says.

To foster this spirit and promote opportunities for innovation, research and entrepreneurship as key job options for the country in the 21st century, ANII will launch a project called the School of Innovative Entrepreneurs in the second half of the year to train new entrepreneurs. "The school is going to have a content part, a workshop part and a community part," says the president of the institution. They hope it will be a place where the whole ecosystem collaborates and participates. "This is the way in which we are going to help those who apply for financing instruments to be well prepared and know what ANII will require of them".

Ciapessoni believes that innovation and technology go almost hand in hand. Although it is possible to talk about innovation in processes, designs, or resources, technology is present in almost all, if not all, economic activities, and it is impossible to talk about technology without talking about innovation. "Technology has permeated all industries, so a country that is technologically advanced in terms of resources and infrastructure is in a position to innovate in all its industrial lines, from telemedicine to banking", summarizes the businessman and adds, "I would love that just as before -and now- the role models are soccer players, tomorrow they will be programmers", and he states that it is necessary to demonstrate with concrete and successful cases that technology applied to innovation can be applied in all areas, from the field to the real state, and not only in the ICT area itself.

Limited budget

Although the focus is on promoting Uruguay as a benchmark for innovation, much has been said about the limited budget of ANII, the main promoter of innovation at state level. According to its president, "there was no budget cut", but rather, what happened is that in the previous administration there was an increase in the commitments assumed by the agency -the number of projects approved- and that the current adjustment has to do with being able to cover what the budget really allows.
"In the previous administration, projects were approved far in excess of the resources coming into the agency," he adds and gives as an example that in 2019, projects were approved for a value that exceeded the actual income by $95 million.
"For 2020, it was planned to approve projects for $ 455 million more than the income that was going to be there (...) The agency found itself with many more projects approved than it could pay," he explains.
According to the executive, in 2020 ANII had a higher budget than in 2019, but they had "to use much of that money to cover overcommitments and debts that had been assumed by the previous administration."
However, he assures that this is "going to be reversed". "We are working with the government to end 2021 with a budget in current pesos equal to that of 2019, with an income that has not suffered from inflation or devaluation."

Source: El Observador