Missed Opportunities : Innovation and Resource-Based Growth in Latin America

Latin America missed opportunities for rapid resource-based growth that similarly endowed countries - Australia, Canada, Scandinavia - were able to take advantage of. Fundamental to this poor performance was deficient technological adoption driven by two factors. First, deficient national quot;learningquot; or quot;innovativequot; capacity, arising from low investment in human capital and scientific infrastructure, led to weak ability to innovate or even take advantage of technological advances abroad. Second, the period of inward-looking industrialization discouraged innovation and created a sector whose growth depended on artificial monopoly rents rather than the quasi-rents arising from technological adoption, and at the same time undermined resource-intensive sectors that had the potential for dynamic growth.This paper - a product of the Office of the Chief Economist, Latin America and the Caribbean Region - was prepared as a background paper for the region's flagship report, From Natural Resources to the Knowledge Economy (2001)