Using Natural Resource Industries as a Platform for the Development of Knowledge Intensive Industries in Latin America: The Seed Industry in Argentina, Brazil and Chile

ANABEL MARIN; FIGUEIREDO PAULO; CLAUDIO BRAVO ORTEGA; YAMILA KABABE; EVA DANTAS

Rio de janeiro

Workshop; 3rd Workshop Project: Innovation Capability Building, Learning and Institutional Frameworks in Latin Americas’ Natural Resource Processing Industries: Experiences from Argentina, Brazil and Chile; 2011

Fundacion Getulio Vargas

This paper, explores the extent to which Latin American countries are taking advantage of the new innovation opportunities opened by Natural Resource activities, by analysing the development of technological capabilities and it sources in the seed industry in Argentina, Brazil and Chile. The research is based on an in depth study of a sample of nine private and public companies of the three countries, that were selected to represent the industry structure of each country. Our analysis suggests very interesting insights. First, we found that the agricultural sector in Argentina, Brazil and Chile is not only opening opportunities for innovation in the seed sector. The sector is also engaging itself in innovation in the seed industry through several initiatives of farmers. Second, contradicting most expectations, we found that domestic firms in the region are moving into world leading positions (they are doing R&D in genomics, in second wave GM, and opening new directions for innovation in the sector). On the contrary, the MNCs subsidiaries interviewed, are in less advanced positions, since they draw most of their technological assets from their corporations and are doing very little innovation in the region (with one exception). Third, movements into world leading positions are not all related to the use of transgenesis for the improvement of seeds. The more advanced firms, in effect, in responding to the new opportunities are directing their innovative efforts in more than one direction, including advanced ways of conventional breeding and non- transgenic genetic modification. These face less regulatory restrictions, and are more adequate for certain types of seeds such as fruits and vegetables. Fourth, all firms in the seed industry, independently of the level of capability, perform all forms of internal learning mechanisms. However, only the more advanced firms deploy certain patterns of external learning mechanisms. They do not tap into existing knowledge, they create new knowledge, often registered in publications and patents, and use complex interactive joint R&D projects, which in general include at the same time users, universities and other firms, in the same country or even abroad.  There are significant differences across countries regarding capability and structure. Regarding structure, in Argentina, the industry is much more dominated by private companies, both domestic and MNCs, than Brazil and Chile. Private companies carry out most investments in R&D and register most varieties. In Brazil this leading role is played by EMBRAPA (the public research institution linked to the agricultural sector), who seems to be taking advantage of its position as a regulator, to locate itself as an intermediary between the MNCs and the domestic market. In Chile the situation differs according to the market that is served, MNCs dominate the market for exports, that can use GM, while the INIA (the public research institution linked to the agricultural sector) has a leading role in the development of seeds for domestic consume, most for fruits and vegetables.