Innovation Ecosystems in Latin America

Innovation is fundamental in creating solutions and advances that address current global problems. It also serves as a way to achieve greater social and economic well-being. By consolidating innovation ecosystems we can help regions to prosper and create opportunities at a local level, that will be key to post-pandemic economic recovery.

At Movement Health 2030 we promote the development of solutions that have an impact on communities, through co-creation with the health systems of Latin America. We seek to be a catalyst for innovation in health by integrating stakeholders and institutions from the public and private sectors, to collaborate and generate synergies that allow strengthening and consolidating ecosystems, and multiplying the impact without duplicating efforts.

There are many benefits of working at the ecosystem level because it facilitates the interaction, resources are used more efficiently and there is an exchange of strategies to develop and implement solutions that respond to current challenges and future needs of the population. Economically, ecosystems contribute to the generation of jobs, as well as to local and regional development.

In recent years important ecosystems have emerged, which have become key points for the creation and development of startups. This is the case of countries like the United States, the United Kingdom, Israel and Canada that have managed to successfully consolidate their ecosystems and transform their economies through innovation. These 4 countries are positioned as the best innovation ecosystems in the world, according to the 2020 Ecosystem Report from StartupBlink, a global startup research and innovation center that maps and evaluates ecosystems.

It is essential to understand the level of development of the innovation ecosystems in the region and in each one of the countries, in order to develop programs that adapt to the capabilities and close the current gaps.

What is the outlook for innovation ecosystems in Latin America?

StartupBlink's 2020 Ecosystem Report, which considers in its assessment the quantity and quality of startups and other support organizations, as well as the business environment, shows that the strongest ecosystems in Latin America are: Brazil in 20th place, Chile in 34th, Argentina in 38th, Mexico in 41st and Colombia in 46th place on a global level. In addition, Brazil ranks 30th among innovative countries, with solutions created specifically to address the Covid-19 pandemic, according to the same Ranking.

There are still various challenges and opportunities to boost innovation and entrepreneurial culture in the region, which have increased in the face of unprecedented times like during the pandemic. However, during the last few years, the ecosystems in Latin America have evolved and have become stronger and more reliable. Several Latin American countries have created favorable conditions, programs and incentives to turn innovation into an engine of growth. By doing so, they continue to encourage entrepreneurship, innovation and collaboration, which is essential to face current and future challenges. 

According to LAVCA's annual report on technology investment in LatAm, investment in Latin America has doubled year over year, from 2016 to 2019. In countries like Mexico, Colombia and Argentina there was a significant increase in investment in Seed startups between 2018 and 2019 (Mexico: from 32 to 50 deals; Colombia from 10 to 23; Argentina from 9 to 18), which shows that the ecosystem in the region is thriving and being supported by governments, investors, accelerators, and corporations. The main opportunities for innovation in the region are in the health, education and logistics industries, as a response to the new global reality.

Let's review some of the countries with the strongest innovation ecosystems in Latin America:

Brazil

Over the last 20 years, Brazil has established several public policies to finance and support innovation. The government has created credit programs, tax incentives, research projects in companies, and equity investments in startups. The reduction of bureaucracy has also been beneficial for the innovation ecosystem in the country.

In terms of investment, in 2019 Brazil had 50.5% of the deals in the region, with US$2.49B invested in 222 deals, according to LAVCA's annual technology investment report.

Brazil is currently the country with the strongest ecosystem in Latin America. Thanks to the quantity and quality of startups, its good environment for business and the ecosystem, it climbed 17 positions in Startupblink’s ranking (2019 to 2020). Sao Paulo is the leading city for startups and has become a global hub for innovation and the only city in LatAm in the top 40 innovation ecosystems.

Chile

Over the last 10 years, the public and private sectors have supported the growth of innovation startups, with the goal of generating an impact on employment and economic growth in the country in the long term. In addition, Chile is the country with the most entrepreneurs in the OECD and seeks to become the innovation and entrepreneurship Hub in the Latin American region. They have government-funded programs such as Start-Up Chile; one of the world's leading accelerators that has also attracted foreign entrepreneurs.

LAVCA 2020's annual report on technology investment in LatAm shows that in Chile during 2019 US$63M were invested in 40 startups, which represents 9.1% of Latin American deals.

The city of Santiago dominates as the country's core for startups and Startupblink’s report considers it important that more cities in the country also aim to meet the conditions to create successful startups and thus be able to maintain the leadership position in the region. Child fell 4 positions in its 2020 report, compared to 2019.

Argentina

In the last two decades, the innovation ecosystem in Argentina has been strengthening. Public tools to promote activity, such as the Entrepreneurship Law and the Knowledge Economy Law have been of great help. However, as in other countries in the region, it is necessary to continue strengthening the interaction and joint work of key stakeholders.

Most startups are engaged in innovation in AgTech, BioTech, FinTech, HealthTech, Machine Vision, and Telecom.

It is one of the fastest growing ecosystems in the region. According to LAVCA's technology investment report, in 2019 US$290M were invested in Argentine startups, with 29 deals representing 6.6% of the region. And from 2019 to 2020 it climbed 6 positions in Startupblink’s global ranking.