Innovation, R&D and Productivity in the Costa Rican ICT Sector: A Case Study

This paper addresses the relationships between innovation, research and development (R&D) and productivity in domestic ICT firms in Costa Rica. Factors considered were the types of innovation outputs produced by domestic ICT firms, the relative importance of innovation inputs, the impacts of innovation on firm productivity, the protection of innovations, and impediments to innovation. While most firms engaged in all types of output and input innovations, they appear to be driven by retaining or increasing market share rather than increasing productivity. Half of firms do not formally protect the intellectual property created by their innovations, are not familiar with methods for protecting innovation or the availability of government grants for such purposes, and face barriers associated with the Costa Rican Patent Office. Other impediments include lack of knowledge about financial resources available and scarcity of human resources. There is also evidence of knowledge spillovers through worker mobility from multinationals operating in Costa Rica to domestic ICT firms.