SPOTLIGHT ON LATIN AMERICA

Latin America: Investing in innovation

Countries across the region are coming up with smart ways to turn science into innovation for the benefit of society

Bigger countries in Latin America are recognizing that they have to invest in science and technology to create a core of innovators. Johanna Mendelson Forman, Center for Strategic and International Studies

WHEN BIOLOGIST Luis Rafael Herrera Estrella first became interested in the bacteria that live in Mexico's Cuatro Ciénegas desert, his aim was to answer an academic question: whether that valley had been a sea 90 million years ago. But his studies led to something much more practical – an agro-biotech company, which could help reduce the worldwide use of toxic phosphorus fertilizers, of which reserves are much depleted.

By sequencing the DNA of Cuatro Ciénegas microbes, Herrera and his team confirmed their marine origin. They also found that some had a gene which made them particularly efficient at extracting food from environmental phosphorus. A renowned expert in transgenic plants, Herrera introduced the bacterial gene into tobacco, corn, and soy, and found that the plants became better at extracting phosphorus, boosting the efficiency of phosphorous fertilisers. Keen to exploit this discovery into a viable business, Herrera co-founded the Stela Genomics company in 2012.

Herrera, director of the National Laboratory of Genomics for Biodiversity (Langebio) in Irapuato, Mexico, is one of a growing number of Latin American scientists bridging a long-standing regional gap between basic research and its social and commercial applications.

Latin America ranks only second to Africa in number of patent files – a proxy measure for innovation capacity – according the World Intellectual Property Organization. And data from the Ibero-American and Inter-American Network of Science and Technology Indicators (RICYT) suggests R&D expenditure of companies in the region has changed little in recent years.

Dr. Roberto Tapia-Conyer, CEO of the Carlos Slim Foundation in Mexico.

Yet change is underway. “In bigger countries, like Chile, Brazil, or Mexico, there is a growing recognition that they have to invest in science and technology to create a core of innovators,” says Johanna Mendelson Forman, senior associate of the Center for Strategic and International Studies, a non-profit organization in Washington DC. Jesús Sebastián Audina, at the National Council for Scientific Research in Madrid, agrees. “Until now, most of the innovation has been based on buying foreign technology, rather than on local research,” he says. “But the culture of getting closer to companies has grown in universities in the last few years.”

Brazil is taking the lead in the region, investing the highest proportion of GDP in research, especially the state of Sao Paulo, which publishes around half of Brazil's research papers. The state constitution stipulates that 1% of revenue must be earmarked for the Sao Paulo Research Foundation (FAPESP). In 2012, the Foundation had a budget of US$559 million, and funded 11,000 graduate students and postdocs. It places importance on translating that research into innovation, explains Carlos Henrique de Brito Cruz, FAPESP's Scientific director. “In all our calls [for applications to funding schemes] we make clear that we expect scientists to be alert about opportunities to transfer knowledge to society,” he says.

The Sao Paulo Research Foundation (FAPESP).

This expectation is also reflected in the funding opportunities offered by FAPESP. The University-Industry cooperative research program co-finances applied science projects with more than 100 companies, including the aircraft manufacturer, Embraer, Agilent, which makes Scientific measuring equipment, the car makers Peugeot Citroen, and Microsoft. The Small Business innovative research program has funded 15,000 small companies since 1998. Each year since 2000, FAPESP has also financed a number of Research Innovation and Dissemination Centers, which bring together around 600 scientists from Brazil and around the world. The research centres, which are often co-hosted by several universities, focus on translating knowledge from a broad range of scientific disciplines into practical applications. In its second funding round this year, FAPESP selected 17 RIDCs, which will collectively receive US$370 million for up to seven years.

Start-up smarts

Innovation efforts extend beyond Sao Paulo; this year the Ministry of Science, Technology, and Innovation launched Startup Brasil, which matches young tech start-ups with accelerators – private companies with investment capacity. The program aims to incubate 150 start-ups over the next three years, and encourages foreign companies to apply, as a quarter of those selected will be international.

Brazil's programme mirrors a similar scheme, Start-up Chile, which was set up in 2010 by the Chilean Economic Development Agency (CORFO) – a public organization devoted to steering innovation – with the ambition of making Chile the innovation hub of Latin America. CORFO lures foreign start-ups to Chile with the offer of US$40,000 of equity-free seed capital and a temporary visa. Now in its eighth year, more than 750 companies have been selected for the program, with most foreign entrants coming from the US, Argentina, and India.

Dubbing 2013 as Chile's “Year of Innovation,” the government is also channelling unprecedented funds into innovation – almost US$ 1 billion in 2013 compared to US$300 million in 2005. In 2012 it also updated its tax credit laws allowing companies to claim a 35% tax credit on all R&D expenditures.

Innovation for health

Healthcare is one sector benefiting from Latin America's innovation push. In Mexico, the Carlos Slim Foundation – a charitable foundation for science and education, created by the billionaire owner of the business group Carso – has set up a health institute which focusses on kick-starting innovations that translate research into material benefits for people, says the foundation's CEO Roberto Tapia-Conyer.

For instance, the Institute's Genomic Medicine project has budgeted US$139 million dollars to find genes associated with diabetes and breast cancer in the Latin American population, and has fled six patents concerning the research. To help meet its aims, the institute has paid for 9500 student fellowships in the past five years and has set up a virtual Center for Health Education that provides free online courses to scientists and doctors.

In 2006, the Uruguayan Pasteur Institute was set up in Montevideo as part of a network of 32 independent centres under the auspices of the French Pasteur Institute. By the end of 2014, the institute, with 150 employees plans to open the first Good Manufacturing Practices (GMP) plant for academic-industrial codevelopments in South America: a 200 square meter laboratory for the production of small lots of recombinant proteins for applications in human and animal health.

In November the institute also plans to open a bio-incubator with space to host eight start-ups and 15 potential entrepreneurs who will be mentored. “According to the last census, there are only 60 biotech companies in Uruguay, so the bio-incubator will trigger a significant increase,” says Atilio Deana, head of the institute's technology transfer unit.

Applied research is also an integral part of the Cuban Neuroscience Center (CNEURO), in Havana, which promotes the use of computers to improve the brain's health. “We evaluate our scientists not only through the h-index, but also through indicators of their impact on public health,” says Pedro Valdés Sosa, the institute's director.

Seeding business

The National Laboratory of Genomics for Biodiversity (Langebio) in Irapuato, Mexico Credit: LANGEBIO-CINVESTAV

At Langebio, the discovery of the phosphorus processing gene that led to the foundation of Stela Genomics is just one innovation successes. Created in 2005 as a branch of Mexico's Center for Research and Advanced Studies of the National Polytechnic Institute (CINVESTAV), with the remit of studying Mexico's biodiversity, its plant genetics research has attracted US$2.3 million in investment from the seed company, Pioneer Dupont.

To capitalise on these innovation successes, Latin America now needs to refine its strategies, says Sebastián Audina, by establishing priorities “on a few, strategic sectors in which each country has chances to be competitive in the short or mid-term.” Key goals which must now be met are “better fiscal policies to collect funds for research, a better public-private partnership, better protection of intellectual properties, and a better knowledge of English,” says Mendelson Forman. “It's a generational change and it will not be overnight, but I am hopeful,” she says. “In 30 years in the field I had never heard so much talk about science and technology in the Americas as now.”

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