PROMOTING INNOVATION TO COMPETE IN...

PROMOTING INNOVATION TO PROMOTING INNOVATION TO PROMOTING INNOVATION TO PROMOTING INNOVATION TO COMPETE IN GLOBAL MARKETSCOMPETE IN GLOBAL MARKETSCOMPETE IN GLOBAL MARKETSCOMPETE IN GLOBAL MARKETS

Claudio E. Maggi Claudio E. Maggi Claudio E. Maggi Claudio E. Maggi

CEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFO

Porto Alegre, Nov. 2009

•• To continue with strong growth (at least 5% annually), which is sustained and balanced, To continue with strong growth (at least 5% annually), which is sustained and balanced, until we are a until we are a developed country.developed country.

Years taken to double GDP

End yearStart yearPer capita GDP US$ ppp

• The first step:

Double our per capita

income in the next 15 years

(app. 2025)

• In the light of our history this is a very challenging goal…

Chile`s middle term growth goal

“The World Economy: Historical Statistics”. A. Maddison, 2007

Estonia (17,802)Lithuania (15,443)Argentina (14,838)Latvia(13,875)

Malaysia (11,915)

Singapore (29,743)Taiwan (29,244) Spain (27,542)New Zealand (25,655)

Slovenia (23,159)Korea (21,887)

CHILEUS$ 12,737

6819881920From 2,769 to 5,781

4319201877From 1,325 to 2,768

5718771820From 694 to 1,325

1620041988From 5,781 to 11,520

US$ 25,000

Cifras de PIB per cápita en dólares ppp. FMI, sep. 2006

Chilean competitive performance: selected factorsWEF GCI 2009-2010 (Overall Ranking: 30th)

Basic Requirements:Basic Requirements:Basic Requirements:Basic Requirements:Institutions

InfrastructureMacroeconomic Stability

Health and Primary Education

Efficiency Enhancers:Efficiency Enhancers:Efficiency Enhancers:Efficiency Enhancers:

30

32

35

19

69

33Efficiency Enhancers:Efficiency Enhancers:Efficiency Enhancers:Efficiency Enhancers:

Higher Education and TrainingGoods Market EfficiencyLabor Market Efficiency

Financial Market SophisticationTechnological Readiness

Market Size

Innovation and Sophistication factors:Innovation and Sophistication factors:Innovation and Sophistication factors:Innovation and Sophistication factors:Business Sophistication

Innovation

44

42

32

41

26

45

33

49

39

43

Spending on R+D as % GDP 2008: Chile still

invests 0.7% of GDP

in R+D (in OECD

countries the average

is 2.2%)

37% of the R+D

spending in Chile is Czech Republic

Australia (2000)

EU

OECD

United States

Korea

Japan

Finland

Source: OECD Economic Survey of Chile (2005)

spending in Chile is

financed by the

private sector. In

OECD countries, this is

more than 65%.

0 1 2 3 4

Argentina

Mexico (1999)

Slovak Republic

CHILE (2002)

Hungary

New Zealand (1999)

Brazil (2000)

Ireland

Czech Republic

%

Private Spending

Public Spending

Is this a good indicator to

measure innovation?

Number of Triadic* patents per

million inhabitants

Registered Patents.International Comparison.

16,18

16,36

37,52

52,61

83,05

92,25

Australia

Ireland

OECD

United States

Finland

Japan

*Patents registered

simultaneously in the

USPTO, JPO and EPO (2001)

Source: OECD MSTI (2004)

0,15

0,15

0,21

0,74

1,30

2,84

8,94

10,57

0,20

0 30 60 90 120

Brazil

Mexico

Chile

Argentina

Slovak Republic

Czech Republic

Hungary

New Zealand

Korea

NATIONAL SYSTEM OF INNOVATION

STRENGTHS WEAKNESSES

• The income coming from the exploitation of natural

resources exceeds that which is expected from the

majority of the innovations.

• System of innovation centered on basic

investigation.

• Very low R+D+i on the part of the companies,

• Stable Macroeconomic context and markets

working well.

• International openness

• Reliable regulatory and legal frameworks.

Source: OECD Reviews of Innovation Policy, Chile (2007)

• Very low R+D+i on the part of the companies,

including foreign companies.

• Weak institutionality for innovation.

• A limited market for knowledge.

• Weak infrastructure for the dissemination of

technology.

• Little support provided by seed or venture capital.

• Difficulties for mobility of human capital in science

and technology.

• Political commitment to increase support for

innovation.

• Industries with strong export orientation and based

on natural resources.

• An important nucleus of dynamic companies and

business people with innovative models of business.

• Groups of excellence in scientific investigation

Evolution in the development of Evolution in the development of innovation policiesinnovation policies

Learning Curve

?

Initial phase

(1990-1995)

Institutional Differentiation

(1995-2000)

Mixed Policy of Differentiation

(2000-2005)

Profundización: Políticas para dar el salto al desarrollo (2005+)

Threshold of systemic efficiency

WHAT TYPE OF POLICIES ARE REQUIRED?

Institutional improvements focusing on the governing of the SNIC (Chilean national service for innovation); Selective policies complementary to the former “neutral “ones;

Policies to permit the “inflection” of the SNIC

Inst. of Innovation in

Chile

PCT program (1992) FONDAP (1997)

New bases for funds for public laboratories (1996, 1997)

Millennium Initiative (1999)

PBCT (2003)

Chile Innova (2001)

New agenda for National economic development (2001)

Regional S&T Centers (2000)

National Council of Innovation for

Competitivity (2005)

FONTEC (1992)FDI (1995)

Innova Chile (2004)

Committee of Ministers for Innovation (2007)

Fuente: OECD (2007), Banco Mundial, CNIC

Towards a National Innovation Strategy(White Books I and II (2007 - 2008)

� To continue growing based on “more of the same” will not be enough

� Competitivity and innovation are systemic problems that must be addressedthrough a joint effort from the State and private sector.

INNOVATION STRATEGYINNOVATION STRATEGY

Quality Human

Capital

Quality Human

Capital

Base sciences

with strategic

orientation

Base sciences

with strategic

orientation

Business

Innovation

(creation of value)

Business

Innovation

(creation of value)

Efficient institutionality for innovation

(Long term vision, “accountability” in the implementation)

S E L E C T I V I T Y

Focus on clusters with potential and latent competitive advantages

COMPETITIVITYCOMPETITIVITY

� Copper Mining

� Global Services

(Offshoring)

Clusters

Chile`s Innovation Strategy: Prioritised

Clusters 2006-10

10

(Offshoring)

� Financial Services

� Livestocks – Meats Chain

� Fruits & Wines

� Processed Foods

Industry

� Aquaculture

� Focused Segments

Tourism

• To boost productivity and growth in Chile.

Infrastructure and Infrastructure and

resourcesresources

Normative, legal and Normative, legal and

political frameworkpolitical framework

• Generation and supply of energy

• Supply of water and availability of natural resources

• Infrastructure for transport and/or distribution of natural resources

• Infrastructure for telecommunications

•Logistics

• Rule of Law and ownership rights

• Regulation of competition for a market economy

• Transparency in the private and public sectors

Key PlatformsKey Platforms

political frameworkpolitical framework

Finances and Finances and

CommerceCommerce

Crossover Crossover

TechnologiesTechnologies

• Transparency in the private and public sectors

• Government policies of support for the private sector and investment.

• Employment and environmental regulation

•Intellectual ownership

• General access to national and international financing system

• Efficiency of financial market

• Commerce and access to markets

• Biotechnology

• Information and communication technologies

• Food chemistry

• Nanoscience and Nanotechnology

Strategy of Multilevel Institutionality

GENERAL COORDINATION ENTITIES

EXECUTIVE ENTITITES

National Council of Innovation

for CompetitivityCommittee of Ministers for Innovation

Regional Agencies for

Economic Development

SECTORIAL AND REGIONAL ENTITIES

Public-Private Strategic Councils

Of Clusters

CONICYTCORFO

InnovaChile FONDEF FONDECYT

OTHER

Created in march 2005, InnovaChile is theGovernment Innovation Promotion Agency,dedicated to support Chilean firms to improve theircompetitiveness in national and internationalmarkets, by promoting the development ofinnovative initiatives, new ventures andtechnological upgrading processes.

InnovaChile provides matching funds to support

Samstag, 28. November 2009, 13/29

InnovaChile provides matching funds to supportindividuals, single firms, consortia, universities andtechnology-related institutions wishing to undertakean innovative enterprise.

CLIENTS:Firms

Entrepreneurs

Technological Institutes

Universities

SERVICES:

Grants (shared costs, risk, apropiability)

Expert assessing in the innovation cycle

Development of innovation support networks

InnovaChileInnovaChile: Budgetary Evolution: Budgetary Evolution

US$95 millons

FIC

11.957

FIC

20.104

FIC

25.127

FIC

31.610

30.000

40.000

50.000

60.000

Aporte INNOVA CHILE - FIC

(MM$)

Aporte INNOVA CHILE-

REGULAR

(MM$)25%

MM$ 50.734

MM$ 39.582

26%

MM$ 57.681

MM$ 33.573

36%

18%

28%

14%

• Between 2006 and 2009, more than 12.000 entrepreneurs, companies, and technological centers have been supported by mean of matching grants. In addition, since 2007 more than 14,000 SMEs per year have acceded to technological assistance through the tech-nodes network.

REGULAR

24.724 REGULAR

21.616

REGULAR

19.478

REGULAR

25.607

REGULAR

26.071

0

10.000

20.000

2005 2006 2007 2008 2009

(MM$)

68%

25%

-10%

31%

2%

Curva Evolución Ppto. REGULAR

Curva Evolución Ppto. FIC

Curva Evolución Ppto. TOTAL

Main Innovation Areas


PUBLIC GOODS AND

CAPACITY BUILDINGINNOVATIVE

ENTREPRENEURSHIP

CORPORATE INNOVATION

TECHNOLOGY

TRANSFER

Public Goods and Capacity BuildingPublic Goods and Capacity Building


Public Innovation Assets

Pre-competitive R&D

Strengthen of Regional Capabilities

SOLE REPOPULATION : A TECHNOLOGICAL SOLUTION FOR LOCAL FISHERMEN IN

THE IV REGION

Institution: Fundación Chile

Participants: Syndicate of diving fishermen and similar independent local branches in Tongoy, Granjamar, Tongoy Bay S.A.

To confirm the feasibility of sole repopulation in order to increase sole fishing in the Bay of Tongoy, through the liberation of more than 5 thousand sole.

Results:

High level of post liberation survival, increase in capture, industrialization of the product, alternative economic income for local fishermen in Tongoy.

Bay S.A.

InnovaChile Contribution: $123 million

Project Total: $177 million

Agronomic Evaluation Of Jatropha Curca, Used To Produce BiofuelUnder Edafoclimatic Conditions Of Chile

Public Innovation Assets


To evaluate the agronomic adaptation ofthe Jatropha Curcas to the edafoclimaticconditions in the semi-arid region of Chile.

A short-term objective is to introduce a newtype of cultivation into the semi-arid region.

A long-term objective is to establish amanagement plan to achieve better growand production of this plant, in orderproduce Biofuel.

Company name: INIA

InnovaChile:US$320.000

Total cost:US$980.000

Regional R+D Centers (Capacity Building)

CENTER OF TECHNOLOGIES IN WATER RESOURCESIN ARID ZONES

• Alliance between Grupo Luksic, the Universidad• Alliance between Grupo Luksic, the UniversidadCatólica del Norte and the Antofagasta Association ofIndustries.

• With an investment of US$ 2.8 million, it develops toolsfor the rationed use of water.

• Its research leads to savings in water costs andoptimization of its consumption in rural zones.

R+D Centers

CENTER OF MATHEMATICAL MODELLING

• Alliance between the Universidad de Chileand CNRS (France), the Universidad deConcepción, Codelco and Dassault Aviation.

• With an investment of US$ 34 million, theCMM carries out studies for the French railindustry, research into improving salmoncultivation and grape quality, and developssolutions for problems in the miningindustry.

INSTALLATION OF THE FRAUNHOFER INSTITUTE IN CHILE

• The fifth largest research institute in theworld will develop systematic biotechnologyin Chile, focused on the aquaculture, food andagriculture, forestry, energy and health

Attraction of international R+D centers

agriculture, forestry, energy and healthsectors.

INSTALLATION OF SYNGENTA

• R+D center in Arica for theimprovement of seeds for export.

Corporate InnovationCorporate Innovation

Single corporate innovation


Single corporate innovation

Technological consortia

Internationalization of innovative effortsBusiness platforms for innovation

Support to technological business development

Support to patenting process

Support to innovation management platforms

R&D Tax incentive

Technologies to identify, follow and evaluate the cathodes used in Electro-Winning

To reduce production costs and to increase productivity in the Electro-Winning process through the evaluation of cathodes the evaluation of cathodes quality and its influence on the production levels and the quality of the obtained metal.

Aplik S.A

InnovaChile: 76 MM$Developer: 83 MM$

BIOGAS PRODUCTION USING POULTRY MANURE

Individual Corporate Innovation

Company name: INGENIERIA INDUSTRIAL SAME LTDA.




The aim of this project is to reduce the hydrogen sulfideconcentration by developing a new anaerobic biodigestiontechnology to treat poultry manure produced in small andmedium size farms.

A new business division is expected to be created. The Biogasproduced may be used for both, commercialization orelectricity production.

Consortia, unprecedented alliances

• Three years ago, no business technological consortium existed in Chile.

• Today there are 22, thanks to the unprecedented alliance between companies and researchcenters, promoted by the government.

• Their investigations cover areas such as genetics, biotechnology, genómica forestal, roboticsolutions, among others.

• The investment from combined public andprivate contributions, reaches US$ 123million.

• 47% of the total comes from privatefinancing.

Company: Sixtra S.A. – Sixbell Nekotec Solutions, Intel through Commlogik Corporation and the Universidad de Chile through the Foundation for Technological Transfer (UNTEC)

InnovaChile Contribution: $ 1,304

SixLabs Consortium(Support to Tech Consortia)

To create a specialized unit in the development of products and servicesof high added value for the Telecommunications industry and its users inLatin America.

The products: IMS Charging Platforms, Business Application Server (BAS),Signaling Application Server (SIgAS), Media Server (MS) and ServiceCreation Environment (SCE).

InnovaChile Contribution: $ 1,304 millionTotal Cost: $ 2,612 million

Since 2008: Tax incentive for contract R&D

• Aimed at increasing theinvestment of companies in R+Dand improving their connectionwith research centers.

• For every $100 invested in• For every $100 invested inresearch, up to $46 will besubsidised.

• Places Chile in line withinternational practices, creatingthe most generous tax exemptionin the world (OECD).

• Permits diversification in sourcesof financing.

International expert advisory

Technology TransferTechnology Transfer

International expert advisory

Technological internships for professionals

and technicians

Technological SMEs missions abroad

Technology dissemination programs

Specialized labor competencies programs

RETScreen Software Training Program(Expert Advisory)


Company name: FUNDACIÓN CHILE


Total Cost:US$7.000

Train FundacionChile and other ESCOS engineersin the use of RETScreen, which is a software than toevaluate the energy production, savings, costs,emission reductions, financial viability and risk forvarious types of Renewable-energy and Energy-efficient Technologies.

Biodegradable ContainersIn search of organic plastic

(Technological Dissemination Program)

Project: International tendencies in eco-sustainable container and packaging technologiesInstitution: Fundación Chile

InnovaChile Contribution: $ 60 millionmillionTotal Cost: $ 80 million

Fundación Chile took “a sustainable” line of thinking, in order to develop aproject to introduce a different concept: that of containers made withorganic materials.

Project: Development of containers and packaging with biomaterials. Thisis a big challenge, given that today it is the plastics industry whichdominates the market.

Design and Innovation SME´s Technological mission to USA

Participants: 12 design companies (graphic, industrial, furniture, among others).InnovaChile Contribution: $ 14.5 million

Mission to the most important event of the industry “CONNECTING ’07” in San Francisco and visit to the companies Autodesk and Ideo. Organised by Icsid (International Council of Societies of Industrial Design). It represents more than 150,000 designers in the whole world.

millionTotal Cost: $ 20.7 million

Innovative EntrepreneurshipInnovative Entrepreneurship


Seed Capital: Stage 1: business plan appraisal

Stage 2: start-up

Business Incubators

Support to Business angels networks

Spin Off

IC2 U.Texas Program (Offset)

Five years ago, no support capacities in Chile for innovative entrepreneurship.

Today, through various CORFO instruments and programs, Chile has:

• More than 20 business incubators (since 2005,

Support for innovative entrepreneurship

• More than 20 business incubators (since 2005, 1,200 entrepreneurs have been supported)

• Financing through seed capital (more than 500supported since 2005)

• Three networks of investment angels

• 20 funds of venture capital, 6 of which havebeen created in the last 2 years, with a public-private contribution of US$ 100 million tosupport innovative entrepreneurship.

Rethink Biotechnological Packing Seed Capital, Stages 1 and 2

Company: Rethink S.A.Sponsor: OCTANTIS, Univ. Adolfo IbañezInnovaChile Contribution: $ 40 millionTotal cost: $ 44.6 million

Rethink seeks to strengthen its business plan, size up the target market and commercially validate its product Siempreverde, which permits a prolongation in the quality of table grapes, and diminishes the harm produced by storage and transport.

Market: Producers and exporters of export table grapes, reserve grapes, and markets such as Asia..

The AnemixChile in Harrods’ shop windows

Seed capital, stage 2

Entrepreneurs: Ximena Muñoz and Paula VillalobosInnovaChile Contribution: $ 40 millionTotal cost: $ 50 millionTotal cost: $ 50 million

theANEMIX, is a lighting system which creates a three dimensional effect, based on two concepts: fluorescence and reflection. It uses LED technology, which is long lasting and which has a low energy consumption (7W per lineal metre).

It was presented at the Milan 2007 Furniture Show . Today, it can be seen in “Harrods” shop windows, in London. One m2 of this product costs up to US$1,500. This year, they expect to sell more than 100m2 in the whole world.

Implementation of Public Lightning Equipment Using Solar Energy

Seed Capital, Stage 2


Achieve a competitive production cost ofpublic lightning equipments based onsolar energy.

Increase CHISOL’s market participation.

Company name: CHISOL S.A.



� Copper Mining

� Global Services

(Offshoring)

Clusters

Chile`s Innovation Strategy: Prioritised

Clusters 2006-10

37

(Offshoring)

� Financial Services

� Livestocks – Meats Chain

� Fruits & Wines

� Processed Foods

Industry

� Aquaculture

� Focused Segments

Tourism

Clusters Strategy: example projects

EVALUESERVE

• Indian company of commercialservices, financial and legal, with

Global Services (Offshoring)

More than 50 multinationals already located in Chile

services, financial and legal, withoperations in Chile since 2007.

Turnover of US$ 1,300 million globally.

• 120 high level Chilean professionalswork in CORFO’s Technological Buildingin Curauma, sending information in realtime to clients in the United States.

DEVELOPMENT OF HYDROACOUSTIC TECHNOLOGY FOR THE SOUTHERN FISHING AND SALMON FARMING INDUSTRY

• The project will strengthen the infrastructure,equipment and level of specialisation of human

Aquaculture: Cutting Edge Hydroacoustic Technology


equipment and level of specialisation of humanresources at the laboratory of hydroacoustics at theUniversidad Austral de Chile in Coyhaique, creatinga new operative unit (program), to monitor andstudy marine ecosystems of the deep, known as theLaboratory of Marine Biology and QuantitativeEcology (BIMAC).

• CORFO InnovaChile financing of $111 million pesos,out of a total of $445 million.

CONSORTIUM OF MINING ROBOTICS

• Made up of High Service, Codelco, NipponMining Metals and Kuka Roboter

Mining: Technology for the Future


Mining Metals and Kuka Roboter

• Pioneer in a sector where there iscurrently no significant supply at a globallevel

• It will create a Technological Center forApplied Robotics in Calama.

Wine

VINNOVA: BUSINESS TECHNOLOGICAL CONSORTIUM FOR VINEYARDS AND WINE

• 55 vineyards (80% of the industry) associated with the universities Católica del Norte and


with the universities Católica del Norte and Concepción.

• Focused on research into genetic improvementand the diversification of products.

• Total investment of US$ 5.5 million.


Tourism

STANDARDS OF QUALITY TOURISM

• In order to provide transparency in the assessment of real quality in tourism products, the National Normalisation Institute (INN), supported by SERNATUR Institute (INN), supported by SERNATUR and together with the tourism industry, implemented a project establishing 50 standards indicative of good tourism.

• The pilot project was carried out in the X Lake District Region.

INCREASING COVERAGE

Beneficiarios 2008:

Directos: 3.139

Indirectos: 14.000 (vía red de Nodos Tecnológicos)

SUPPORTING CLUSTER

INNOVATION AGENDASAGENDAS

InnovaChile: Modalities

for project financing

2007-2010V: Ventanilla abierta

C.A.: Convocatoria Abierta

C.T.: Convocatorias Temáticas

P.I.I.: Programas integrados de

innovación (modalidad TEKES)

2010*:

V: 40%

C.A.: 18%

C.T.: 30%

P.I.I.: 12%

innovación (modalidad TEKES)

2007

V : 63%

C. A.: 25%

C. T.: 12%

2008:

V: 54%

C.A.: 24%

C.T.: 22%

2009:

V: 40%

C.A.: 24%

C.T.: 36%

Category / Function 2006 2009

Incubadoras NT* 23 18 (+ 14)

Nodos de Articulación Tecnológica**

0 99 (+ 5 CET)

Plataformas emprendimientocorporativo (corporate spin offs)

0 5

Fostering a Local InnovationEcosystem

corporativo (corporate spin offs)

Plataformas de Intel. Competitiva en mercados externos

0 10

Plataformas Gestión de Innovación en Empresas***

0 12 (+15)

Redes de Inversionistas Ángeles 1 4

Fondos de Capital de Riesgo 12 20

Innova ChileAiming to improve its performance and impact

• Efectividad en la asignación de recursos

•Converger hacia un modelo balanceado entre demanda inducida (programas integrados de innovación y convocatorias temáticas) y demanda abierta (ventanilla).•Robustecer (mediante incentivos por desempeño asociado a métricas de impacto) y promover modelos de operación sostenibles para las entidades y plataformas intermediarias. (WB*)

•Alineamiento con la Estrategia Nacional de Innovación para la Competitividad

•Potenciar agendas estratégicas de los clusters, a escala nacional, meso-regional y •Potenciar agendas estratégicas de los clusters, a escala nacional, meso-regional y regional.•Profundizar la oferta de apoyo para el entorno al emprendimiento dinámico (WB*)

(incubación, aceleración de negocios, spin-offcorporativo, financiamiento temprano)•Fortalecer sistema de extensionismo y transferencia tecnológica (WB*)

•Apoyar la internacionalización de negocios innovadores•Atraer entidades de I+D+i de clase mundial

•Asociados a capacidades y procesos internos

•Mejorar tiempos de respuesta y alivianar protocolos de seguimiento de proyectos•Establecer, en coordinación con MINECON y CNIC, la capacidad de monitoreo y evaluación de impactos asociada a la gestión de la cartera de proyectos (WB*)

Visit us!Visit us!Visit us!Visit us!www.corfo.clwww.corfo.clwww.corfo.clwww.corfo.cl

Claudio E. Maggi Claudio E. Maggi Claudio E. Maggi Claudio E. Maggi

CEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFOCEO, InnovaChile @ CORFO

Porto Alegre, Nov. 2009

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