Start-up Latin America Promoting Innovation in the Region

Transcription

1 Start-up Latin America Promoting Innovation in the Region The OECD Development Centre Annalisa Primi Economist, OECD Development Centre Buenos Aires, October 7 th, 2013

2 Summary I. Start-ups and the knowledge economy II. Promoting start-ups (WHY? WHO? HOW?) III. Some examples from OECD countries IV. What is Latin America doing? V. The policy mix for start-up promotion in Argentina, Brazil, Chile, Colombia, Mexico, Peru VI. Policy Recommendations and Next steps

3 Start-ups and the knowledge economy A changing economic landscape (global trends + LAC trends) A growing importance of innovation in national development strategies A renewed discussion on the role of the state in the economy (and its influences on development policy)

4 Start-ups: WHAT ARE THEY?

5 Start-ups: WHAT ARE THEY? Different definitions, based on: Performance(high impact, high growth, gazelles) Innovative content (new solutions, new demand, new business models) We refer to the new technological or innovation-intensive business for which support mechanisms are being designed in Latin American countries difficult to define Challenges in designing targeted policies

6 Promoting start-ups: WHY? Fostering structural change & enabling new sources of growth Positive externalities (experimentation, learning and knowledge flows) Competing globally in knowledge economy Creating synergies with new private sector trends (ex. New forms of FDIs, open innovation models, etc.) In certain cases, low-cost, high-impact actions

7 Promoting start-ups: WHAT TO DO? What role for public policies? Shifting up gears Financing Learning, Technology transfer & entrepreneurial capabilities

8 Promoting start-ups: WHO? National Governments Private-Sector Universities and Research Institutions State and Local Governments Need for: - Coordination - Spaces for dialogue -Good practice-sharing

9 Promoting start-ups: HOW? Promotion of the science and tech base Promotion of cluster development Promotion of soft&hard infrastructure... INDIRECT ACTIONS Financing Business Services & Entrepreneurial Training Regulatory Framework TARGETED ACTIONS

10 Promoting start-ups: HOW? FINANCING SeedCapital Angelinvestors/ Networks Venture Capital BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business Incubators Business Training Technology Transfers University Spin-offs Corporate Spin-offs Accelerators REGULATORY FRAMEWORK Fiscal incentives and special taxes Legislation SEED START-UP GROWTH EXPANSION Source: Based on: OECD(2011a), Financing High-Growth Firms: The Role of Angel Investors, OECD, Paris; INNO-Grips (2011), Policies in support of high-growth innovative SMEs, INNO-Grips Policy Brief, No. 2, June 2011; LAVCA (2012), 2012 Scorecard: The Private Equity and Venture Capital Environment in Latin America, LAVCA, New York.

11 Some examples from OECD countries Australia Finland Israel Incentives to push the private sector until it becomes autonomous

12 What is Latin America doing?

13 Latin America is increasing its investments in R&D but it isstill far from the OECD average R&D investment in Latin America (% of GDP) Source: Based on data from the United Nations Educational, Scientific and Cultural Organization (UNESCO), Red de Indicadores de Ciencia y Tecnología Iberoamericana e Interamericana (RICYT), theoecd smain Science and Technology Indicators (MSTI) database, Brazil s Ministry of Science and Technology, Mexico s National Institute of Statistics and Geography (INEGI), Chile s Ministry of Economy, Development and Tourism, the World Bank database, and Cuba s National Office for Statistics.

14 and private-sector commitment is still low Private-sector investment in R&D Israel Finland USA Australia Source: Based on data from UNESCO, Red de Indicadores de Ciencia y Tecnología Iberoamericana einteramericana (RICYT) and the OECD s Main Science and Technology Indicators (MSTI) database.

15 But despite this the wind is (slowly changing) and Start-ups are gaining momentum in Latin America innovation strategies Innovation policy evolution: Linear supply model Linear Demand model Combined supply and demand model Towards a new model? Variety in country approaches&strategies Argentina => a strong science base Brazil => a big push Chile => the global orientation Colombia and Peru => emerging efforts Mexico => improving the regulatory framework

16 What are L.A. countries doing to promote Start-ups? Implemented In development Recently created Need to be created or reformed Cat. Tool Argentina Brazil Chile Colombia Mexico Peru Financing Seed capital Angel investors Venture capital Business services an nd Regulatory entrepreneurial train ning framework Incubators Accelerators Corporate spin-offs Technology transfer and university spin-offs Business training Ease of founding or closing down businesses Taxation and special legislation Note: This table is not meant to present an international classification. It is based on qualitative information gathered in the country case studies in Chapters 4 to 9 of this report. The goal is to summarise visually the variety of tools created to support innovative entrepreneurship and how developed they are in the countries in the region. Source:BasedonthecountrycasestudiesinChapters4,5,6,7,8and9ofthisdocument.

17 Argentina,2012 FINANCING Seed capital Grants to FONSOFT entrepreneurs EmpretecnoTechnology-Based Businesses (FONARSEC) Entrepreneurial Activity Support (SePyME) Angel investors/ Networks* Venture capital PROFIET (MCyT) Technology transfers: Technology Platform Projects(FONCyT); Non-Repayable R&D Grants (FONTAR) University spin-offs: Science and Technology Research Start Up Projects; Technology Platform Projects (FONCyT) Corporate spin-offs: Public-Private Consortia (FONARSEC) BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business incubators Results-based support system (federal and provincial) Business training Training Programmefor Tech. Transfer Managers and Specialists (FONARSEC) Empretecno Project Flow Facilitators (FONARSEC) Highly Qualified Human Resources (FONTAR) Entrepreneurship Learning Programme (Ministry of Industry) Accelerators* REGULATORY FRAMEWORK Fiscal incentives and special taxes Tax incentive (one-year exemption) for investment in tech start-ups (PROFIET programme, MCyT) SEED START-UP GROWTH EXPANSION Source: Based on official information from Argentina and interviews conducted in Argentina with experts and policy makers.

18 Brazil,2012 FINANCING Seed capital PRIME INOVAR Semente(FINEP) Criatec(BNDES) Juro Zero (SDS/BADESC) Angel investors/ Networks INOVAR Semente(FINEP) Criatec(BNDES) Start-up Brasil (MCTI, in collaboration with private accelerators) Venture capital INOVAR Fund Incubator (FINEP) CRIATEC + CRIATEC II Funds (BNDES) BNDESPAR emerging enterprises capitalisation Programme(BNDES) Business incubators PNI (MCTI-FINEP) Accelerators CRIATEC (BNDES) BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business training FINEP forums for seed and venture capital and for business start-up SEBRAE SENAI system Technology transfers SIBRATEC innovation centres network (FINEP) University spin-offs: No information Corporate spin-offs: No information Legislation to start businesses; institutional conditions to foster stock-exchange listing; M&A; long amount of time needed to start and close a business REGULATORY FRAMEWORK Fiscal incent. and special taxes For foreign investors (no tax on financial operations); Supersimples Programme(Ministry of Finance) SEED START-UP GROWTH EXPANSION Source: Prepared by the authors, based on: OECD (2011), Financing High-Growth Firms: The Role of Angel Investors, OECD, Paris; INNO-Grips (2011), Policies in support of high-growth innovative SMEs, INNO-Grips Policy Brief No. 2, June; LAVCA (2012), 2012 Scorecard: The Private Equity and Venture Capital Environment in Latin America, among others.

19 Chile,2012 FINANCING Seed capital Flexible Seed Grant (SSAF) Start-up Chile (Innova-Chile-CORFO) Angel investors/ Networks (CORFO) Venture capital Long-term loans to investment funds for early stages and expansion (CORFO) Chile Global Connection (CORFO) Business incubators (InnovaChile-CORFO) Accelerators Contact-Chile (Pro-Chile-CORFO) BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING REGULATORY FRAMEWORK Business training Entrepreneur Environment Support Programme(PAE) (InnovaChile-CORFO) Technology transfer: Technological Packaging (InnovaChile- CORFO) University spin-offs: Go To Market (InnovaChile-CORFO); Commercial Exploitation of University; Research (VIU) (CONICYT) Corporate spin-offs: Innovation Management programme (InnovaChile-CORFO) Legislation: New law (2011) reduces business start-up time from 22 to 7 days, but closing a business still takes a long time Fiscal incentives and special taxes More flexible legislation for company R&D SEED START-UP GROWTH EXPANSION Source: Based on official information from Chile and interviews conducted in Chile with experts and policy makers.

20 Colombia,2012 FINANCING Seed capital Enterprise Fund (SENA) Angel investors/ Networks Multilateral Investment Fund of the Inter- American Development Bank (MIF-IDB) Bavaria project Venture capital MIF-IDB Investment Fund Project MIF-IDB Bancóldex project Private equity Bancóldex Capital innpulsa: Innovative Dynamic Entrepreneurship Business incubators Incubation Programme(SENA) Accelerators No information BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business training SENA. Example: Bogotá Emprende Technology transfer: No information University spin-offs: No information Corporate spin-offs: innpulsa Entrepreneurship and Innovation in Large Companies REGULATORY FRAMEWORK Legislation: Decree for setting up funds; Law for promoting an entrepreneurial culture; Law for formally registering a business and hiring staff Fiscal incentives and special taxes No information SEED START-UP GROWTH EXPANSION Source: Based on: OECD (2011), Financing High-Growth Firms: The Role of Angel Investors, OECD, Paris; INNO-Grips (2011), Policies in Support of High-Growth Innovative SMEs, INNO-Grips Policy Brief, No. 2, June 2011; LAVCA (Latin American Private Equity & Venture Capital Association) (2012), 2012 Scorecard: The Private Equity and Venture Capital Environment in Latin America, LAVCA, New York, among other documents..

21 Mexico,2012 FINANCING Seed capital FINNOVA México Emprende AVANCE ntrepreneurs fund (discontinued) Startup Factory Angel investors/ Networks IDB Project Angel Ventures México Venture capital Enterprise Capital Fund (NAFIN) Technology Innovation Fund Innovation Stimuli Programme (PEI) Gazelle SME Fund BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business incubators National Business Incubation System Network of Technological University Incubators Business training AVANCE Business School (discontinued) ADIAT* FIT Modality c, FINNOVA FUMEC Technology transfer: FINNOVA University spin-offs: No information Corporate spin-offs: No information Accelerators TECHBA (Advanced manufacturing, ICTs, life sciences) REGULATORY FRAMEWORK Legislation: Major reforms have significantly reduced administrative and regulatory restrictions on starting and expanding companies in Mexico Fiscal incentives and special taxes No information SEED START-UP GROWTH EXPANSION Source: Based on LAVCA (2012), 2012 Scorecard: The Private Equity and Venture Capital Environment in Latin America, LAVCA, New York; OECD (2012), Evaluation of the Mexican Knowledge-based Start-up Sector Diagnosis and Policy Recommendations, OECD, Paris.

22 Peru,2012 FINANCING Seed capital No support to date *Wayra Telefónica Angel investors/ Networks * Peru Capital Network * Business Angels Club of Peru Venture capital *Trans-Andean Fund Peru *Enterprise Capital Fund *Latam Peru Fund Startup Perú(launched in 2013) BUSINESS SERVICES AND ENTREPRENEURIAL TRAINING Business incubators New Business Initiatives (PRODUCE) Vamos Perú(Ministry of Labour) Business Development Centre (COFIDE) Technology transfer University spin-offs Corporate spin-offs No support available Accelerators No direct support mechanisms exist REGULATORY FRAMEWORK Fiscal incentives and special taxes Tax incentive available for R&D business activities (from 2013) SEED START-UP GROWTH EXPANSION Source: Based on LAVCA (2012), 2012 Scorecard: The Private Equity and Venture Capital Environment in Latin America, LAVCA, New York; OECD (2012), Evaluation of the Mexican Knowledge-based Start-up Sector Diagnosis and Policy Recommendations, OECD, Paris.

23 Policy Recommendations Improving strategic planning Ensuring the availability of a balanced policy mix targeted to the different development stages of star-ups Designing and implementing more sophisticated policy tools in line with the emerging global trends: Update the legal framework Identify opportunities to promote business angels investments Invest in promoting the development of an entrepreneurial culture Introduce performance-based management in intermediary agencies like incubators, accelerators Design more integrated tools that combine finance options with advisory and entrepreneurial skills development services Take advantage of emerging private sector open innovation strategies, corporate venture capital and knowledge-sharing practices Evaluate programs and adjusting incentive schemes based on performances

24 Next Steps Can we better understand the role of big companies in enabling the development of start-up hubs? Can we assess the impact of new open innovation strategies in contributing to innovation and productivity gains in Latin America? Can we map the profile of start-uppers in Latin America?

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