Development Centre Studies

OECD Development Centre

1990-0295 (online)
1563-4302 (print)
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This series of monographs from the OECD Development Centre covers development issues generally and in some cases issues in specific countries. It  includes Angus Maddison’s books containing long-term historical estimates of GDP for various areas of the world.

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Start-up Latin America

Start-up Latin America

Promoting Innovation in the Region You do not have access to this content

OECD Development Centre

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02 Sep 2013
9789264202306 (PDF) ;9789264202238(print)

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This report reviews the policy mix to support knowledge-based start-ups in six countries in Latin America, including Argentina, Brazil, Chile, Colombia, Mexico and Peru. It discusses role of public policies in supporting the creation of start-ups, it presents an overview of the rationale and scope of state intervention and it summarises the experience of OECD countries, focusing on Australia, Finland and Israel. The report provides a comparative assessment of the experience of the six Latin American countries. Following the literature and the experience of countries it develops a taxonomy of instruments targeted to promote entrepreneurship and it compares the policy mix available in the different countries in Latin America. It also identifies recommendations to improve the policy framework for start-up promotion in Latin America. Country notes are available for each of the six studied countries. The report has been elaborated in the framework of the Development Centre's policy dialogue on innovation policies in Latin America.

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  • Foreword and acknowledgements

    Supporting innovation and productive development is a key tool in the development strategies of open, global economies. Although developing countries still do not have the same capacities as OECD countries to introduce innovations into markets, they have become significantly more entrepreneurial over the last decade. This is partly because of their recent high economic growth, driven by China’s entry into global markets and the growing demand of their new middle classes. Amid renewed interest in innovation, these countries are seeing an upsurge of new technology-based companies with a high growth potential, which is leaving its mark on both private-sector initiatives and public policies. Nevertheless, there is still little evidence showing the speed at which start-ups are being created in developing countries and how they are being supported by public policy.

  • Editorial

    Innovation and the creation of new firms are essential to sustain medium- and long-term growth. In the global knowledge economy, countries’ capacity to grow sustainably while attending to the demands of the emerging "middle classes" depends largely on their ability to create new jobs, close the productivity gap and raise the competitiveness of domestic firms. Technologybased start-ups are essential to transform a country’s production and can boost and diversify the economy. But they must overcome major hurdles to get up and running and to expand, especially in developing countries.

  • Acronyms and abbreviations
  • Executive summary

    Promoting the creation of start-ups is gaining momentum in OECD and non-OECD economies. Nevertheless, there is still little evidence revealing the speed at which these new companies are being created and how they are being supported by public policy in developing countries. With the aim of identifying good practices and promoting knowledge-sharing among countries, this study analyses the role of public policy in promoting the creation and expansion of start-ups in six Latin American countries: Argentina, Brazil, Chile, Colombia, Mexico and Peru.

  • Assessment and recommendations

    Recently, start-ups have moved further into the media spotlight, attracting growing attention from innovation experts and policy makers. The spread of information and communication technologies (ICTs) and transformation of the organisation of production throughout the world, where firms increasingly work in networks, have helped generate growing interest in start-ups both in OECD and in developing countries. Start-ups can contribute to structural change by introducing new knowledge-intensive products and services. They also help sustain innovation, drive productivity growth and create opportunities for good-quality jobs.

  • Introduction

    Innovation and the capacity to introduce new products, processes, services and business models are recognised to be increasingly relevant to sustaining productivity and gross domestic product (GDP) growth in the medium and long term. Start-ups can help boost innovation in the economy and vitalise productivity (OECD, 2005, 2010a and 2010b; Stangler, 2010; Endeavor and GEM, 2011; INNOGrips, 2011). The most advanced countries show a strong correlation between a solid base of innovative entrepreneurs, greater leverage of the scientific and technological base, and productivity growth (OECD, 2005).

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  • Expand / Collapse Hide / Show all Abstracts Why and how to promote start-ups

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    • What can public policies do to promote start-ups?

      In OECD and Latin American countries there is a growing interest in start-ups. This chapter presents the different definitions of "start-ups". It highlights the challenges for the creation and expansion of these businesses and discusses the rationale for public policy. It presents a taxonomy of instruments to promote start-ups, focusing on financing, business services and the appropriate legal framework. Based on the experience of OECD and Latin American countries, it presents a taxonomy of direct-support instruments to promote start-ups, based on the firm’s development stage and on the type of support (financing, business training and legal framework).

    • The experience of OECD countries in fostering start-ups

      OECD countries promote innovative start-ups. These countries facilitate access to finance for start-ups, promote the creation of spin-offs from universities and research centres, and favour the commercial exploitation of innovations and the development of business skills. This chapter presents specific examples of start-up support programmes in Australia, Finland and Israel.

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  • Expand / Collapse Hide / Show all Abstracts Country profiles

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    • Latin America's experience in promoting start-ups

      Latin American countries invest a lower proportion of gross domestic product (GDP) in research and development (R and D) than OECD countries. At the same time, the private sector invests little in innovation and there is little co-operation between universities and enterprise. Founding a start-up in Latin America means overcoming greater regulatory barriers and financial obstacles than in OECD countries. However, this chapter shows that innovation policies are gradually becoming more prominent in the development strategies of countries in the region, and that start-ups are gaining momentum. The chapter compares the policy mix to support start-ups in six Latin American countries, based on the country notes of Argentina, Brazil, Chile, Colombia, Mexico and Peru, presented in the second part of this report.

    • Promoting start-ups in Argentina

      This chapter presents an overview of public policies recently introduced in Argentina to support start-ups. It highlights the growing role of innovation policies in the country and the creation of the Ministry of Science, Technology and Productive Innovation. It then looks at specific policies to promote start-ups. Argentina offers support for the seed and start-up stages; however, financing and the regulatory framework for start-ups’ expansion and acceleration are less developed. The country’s sectoral technology funds and solid scientific and research base in sectors such as software, design and biotechnology are important assets whose impact on start-up creation could be strengthened.

    • Promoting start-ups in Brazil

      This chapter presents a brief overview of public policies recently introduced in Brazil to support the creation and expansion of start-ups. The chapter highlights the growing role of innovation policies in the country and the increase in the innovation policy budget. Brazil has been fostering the creation of new firms since the 1980s. It has a well-rounded range of tools to support the creation of innovative firms, with mechanisms that provide support from the seed to the expansion phases. State and local governments are increasingly involved in supporting start-ups and have contributed to set up several successful technology parks that have acted as bridges between the scientific and business communities. Nonetheless, the regulatory framework and the limited availability of infrastructures still represent important challenges for start-ups to become a relevant source of growth in Brazil.

    • Promoting start-ups in Chile

      This chapter presents an overview of public policies recently introduced in Chile to promote start-ups. The chapter highlights the growing role of innovation policies in the country and the increase in the innovation budget. Like Brazil, Chile began to promote start-ups before other countries in the region. Chile has accumulated institutional knowledge in developing programmes to support start-ups. Its experience shows how important it is to have a chain of instruments targeted to the different stages of business development, from seed to expansion. Lately Chile has placed a growing emphasis on start-ups, reforming its existing support systems to match the country’s new vision focused on expanding the country’s role in the global economy.

    • Promoting start-ups in Colombia

      This chapter presents an overview of public policies recently introduced in Colombia to promote the creation and expansion of start-ups. It highlights the growing importance of innovation in the national development strategy. Promoting start-ups is an emerging priority in Colombia. In 2012 the country designed a new instrument, iNNpulsa Colombia, to provide seed capital and training to new entrepreneurs. Colombia’s regional governments are becoming increasingly involved in supporting start-ups to promote growth and employment in their territories. The national development bank (Bancóldex) is also taking a growing interest in supporting the venture-capital industry to facilitate these companies’ expansion.

    • Promoting start-ups in Mexico

      This chapter presents a brief overview of public policies to support start-ups in Mexico. It outlines the progress made in innovation policy, especially the improvements in the regulatory framework, the introduction of new sectoral funds and the measures taken to facilitate public-private co-operation in innovation. It shows that access to credit, especially in the seed and start-up stages, is still a considerable barrier to fostering start-ups in Mexico.

    • Promoting start-ups in Peru

      This chapter presents a brief overview of public policies recently introduced in Peru to support start-ups. The country is benefiting from high economic growth and is looking into how to channel part of its resources from the extraction of natural resources towards innovation and productive development in its regions. Start-ups are an emerging topic on the national development agenda. The country is working to create a new start-up programme, intended to offer seed capital and advice to new businesses. It is also adding new seed-capital budget lines to the national fund for innovation. Strengthening these initiatives, co-ordinating them better with other existing public and private initiatives, and supporting the regions as they develop their own programmes for innovative entrepreneurship are some of the future challenges for the country.

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