Innovation Capability Building, Learning and Institutional Frameworks in Latin Americas’ Natural Resource Processing Industries: Experiences from Argentina, Brazil and Chile: Forestry, pulp and paper

CLAUDIO BRAVO ORTEGA; FIGUEIREDO PAULO; ANABEL MARIN; 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

During recent years Latin American countries have become heavily dependent on their natural resources exports. This has raised the question on how to take advantage from these resources by increasing their technological dynamism. This study addresses this important topic by exploring the process of technological capabilities building in the forestry, pulp and paper (FPP) industries in Argentina, Brazil and Chile. The general objective of this study is to explain the extent to which and how technological innovation is taking place in the forestry, pulp and paper.  To achieve this goal, we explore the following questions: 1) which is the level of technological capability achieved by key players in Argentina, Brazil and Chile, 2) how different learning mechanisms and knowledge flows have influenced these levels of capability and the speed at which these have been achieved over time (to catch up with and/or overtake existing incumbents), and iii) how changes in some critical events relate to components of the institutional and policy framework have influenced the firm´s innovative behavior. Against conventional wisdom we find dynamic industries from an innovative perspective in Brazil and Chile. This result challenges the view that process industries based in natural resources are less dynamic. We find active participation of Brazilian and Chilean companies developing innovation through all the stages of the production chain. The Argentinean firms interviewed have lagged behind in this technological dynamism. The cases of Brazil and Chile show the importance firms give to the development of an optimized forest base, and where they put significant efforts. Thus companies have strong capabilities, either distributed or own capabilities, on genomics and operations research. On the pulp processing stage firms have also reached world-leading capabilities. Finally, Brazilian companies have reached world-leading capabilities in the paper production stage, whereas Chileans have been catching up lately. The Argentinean firms interviewed have remained at basic innovation capabilities level.