Market-oriented reforms, globalization and the recent transformation of Latin American innovation systems

Market-oriented structural reforms were implemented in Latin America under the expectation that the transition from an "inward-oriented", "state-led" growth strategy to one which was more "market-led" and "outward-oriented" was going to be rewarded by a sustainable long-term improvement in the region's rate of economic expansion and productivity growth. The competitive discipline imposed by a more open and deregulated economic regime was expected to induce faster innovation and technological modernization efforts from firms and individuals and, thereafter, a gradual but steady "convergence" to world-wide income and productivity standards. A global look at the region's performance throughout the 1980s and 1990s tells us that such a priori expectation was far from realistic. The paper examines why this has been so.