Applying comprehensive Neo-Schumpeterian economics to Latin American economies

The dichotomy of development economics between market-driven and state-leddevelopment approaches has recently been complemented by a third strand whichfocus on knowledge and capabilities-based development models. Our paper aims tomake a first step towards a Comprehensive Neo-Schumpeterian theory of Development(CNSD) allowing synthesizing the three mentioned development approaches andputting the agents into the centre of interest. The theoretical part of this paper identifies(i) freedom of the actors and social welfare (ii) the capacity to create, implement,diffuse and imitate knowledge and innovations and (iii) an open, efficient and futureoriented economic structure as mutual interconnected and reinforcing objective classesof development. In the empirical part we apply multivariate statistics to a data set with44 indicators representing the future orientation of 20 Latin American countries in thethree objective classes of CNSD. The results show that indeed different patterns and structural bottlenecks for development can be identified. While in some countriesknowledge is the main bottleneck for future oriented development, other countriessuffer from inefficient economic structures or the exclusion of large parts of the population from participating in development and innovation processes. It becomesobvious that just an appropriate combination of the interconnected and mutuallyreinforcing factors knowledge, freedom and future-oriented economic structure maylead to qualitative change and sustainable economic development in the long run.