Slide1: SECOND INTERNATIONAL CONFERENCE ON THE PROCESS OF INNOVATION AND LEARNING IN DYNAMIC CITY-REGIONS Costa Rica, a Dynamic City-Region INNOVATION AND DEVELOPMENT IN COSTA RICA ROGER S. FORBES A. BANGALORE, INDIA JULY 14, 2005


Costa Rica Introduction:: Source: http://www.crwflags.com/fotw/flags/geo-worl.html Costa Rica Introduction:


Slide3: COSTA RICA


Slide4: Costa Rica: A country in harmony with nature


Slide5: A country with no artificial ingredients...a necessary condition, but not enough for the country’s sustainable development...


Slide6: ... The increase in secondary school education coverage and the attraction of high-technology enterprises are contributing to promote the country’s sustainable development and its position as a knowledge-based economy... Source: Estado de la Nación, UNDP and European Union, 2004.


Slide7: GENERAL INFORMATION ON THE COUNTRY Name: Republic of Costa Rica Independence: September 15th, 1821 Population: 4,016,173 (July 2005 est.) Labour force: 1.81 million (2004 est.) Official Language: Spanish. Territory: 51100 km2 (19,700 Sq Mi) Costa Rica is the only nation in America without an army


Slide8: SOCIAL EQUITY AND INTEGRATION Public social investment = 30% between health, social security and education. Investment in education = 6% of the GDP. Public education = 90% (Elementary and secondary school) Literacy rate = 95,2% (2001) Pre-school education = (90%), English (64%), Information systems (49%) 4 public universities, 50 private universities Source: Estado de la Nación, UNDP and European Union, 2004.


Slide9: STABILITY AND ECONOMIC SOLVENCY GDP purchasing power parity - $37.97 billion (2004 est.) GDP - per capita purchasing power parity - $9,600 (2004 est.) GDP Composition: Agriculture: 8.5% Industry: 29.7% Services: 61.8% (2004 est.) GDP - real growth rate: 5.2% (2003 est.) Source: Estadísticas del Gobierno de Costa Rica . and CIA World Factbook


Slide10: STABILITY AND ECONOMIC SOLVENCY Growth of GDP in spite of the adverse international environment During the last two decades, the government has modified its policies and action instruments on the economy, leaving more space to the market forces, domestic and international: emphasis on financial sector and exports. Economic liberalization = 73% GDP (1991) to 95% GDP (2004) Free trade zones = 3,6% GDP (1991) to 30% GDP (2004). Sustained increase of foreign investment Export agriculture and tourism (opening up of skies, tax incentives and Caribbean Basin) Growth of Latin America’s highest GDP 1993-2004 (4.3%) Source: Estado de la Nación, UNDP and European Union, 2000.


Slide11: Modular circuits Textile Banana Equipment of Infusion of serums Pineapple Integrated Circuits Medications Coffee Food TV, radio parts Palm oil Tires Electrical materials Ornamental foliages EXPANSION AND DIVERSIFICATION OF COUNTRY’S EXPORTING AND PRODUCTIVE BASE: MAIN PRODUCTS AND MARKETS Source: PROCOMER, 2005


Slide12: EXPANSION AND DIVERSIFICATION OF COUNTRY’S EXPORTING AND PRODUCTIVE BASE Surface cultivated with pineapple, orange, mango, melon and papaya exceeds in almost 50% the area dedicated to banana-growing. Sales from free trade zones to foreign countries = from 6% (1991) to 40% (2003) Tourism in 2003: 1200 million dollars (20% of exports) Sales of high-technology industry were higher than that of tourism Exports= from $1899 million (1991) to $6102 million (2003) Direct foreign investment = from $178 million (1991) to $587 million (2003) Bank deregulation = private attracting of funds of 36% per year Strengthening of public banks. Source: Estado de la Nación, UNDP and European Union, 2000.


Slide13: EXPANSION AND DIVERSIFICATION OF COUNTRY’S EXPORTING AND PRODUCTIVE BASE Foreign investment directed to electronics Primary products to North America = 65 % (1985) to 24% (2002) High-technology products (computers and semiconductors) passed from 1% in 1985 to 35% in 2002. Export Commodities includes: coffee, bananas, sugar; pineapples; textiles, electronic components, medical equipment, food processing, construction materials, fertilizer, plastic products Source: Agencia EFE, 2002


Slide14: CR/Mexico N./Mexico CA/R.D, CR-ES/Chile CR/Canada T.N./Mexico CA/U.S. G4/Canada R-CA/Panama ALCA CR/Caricom Current: Negotiation Ratification ES/Canada G/H/N/Chile Source: “Política Económica de Centroamérica” de Doris Osterlof Obregón


Slide15: STABILITY AND ECONOMIC SOLVENCY Economic policy emphasizes macroeconomic stability in last 20 years Inflation= 10% Minidevaluations policy = benefits exports and prevents excess in imports Source: Estado de la Nación, UNDP and European Union, 2000.


Slide16: STABILITY AND ECONOMIC SOLVENCY : Challenges and risks Breaking up of dynamic sectors with the exception of tourism 1990-2003: 5.3% increase in tourism and 1.5% in industry Free trade local purchases = 2.4% of exports (2000-2003) Credit portfolio in dollars = 4.4% (1990) to 56% (2003) Tax burden and public debt Road infrastructure Simplification of procedures = support from university Source: Estado de la Nación, UNDP and European Union, 2000.


Slide17: HARMONY WITH NATURE 25,6% of the country’s surface has government protection to some extent. 8% has private protection. 48% has forest coverage 45 signed international environmental agreements (1990-2003) 18 environmental organisms (last fourteen years) Environmental laws SINAC (National System for Conservation Areas) Volunteer groups from the civil society (180 Natural Resource Vigilance Committees – COVIRENAS, as abbreviated in Spanish) Source: Estado de la Nación, UNDP and European Union, 2000.


Slide18: HARMONY WITH NATURE Fifty local initiatives for biological corridors that cover 23% of the country’s surface. The civil society is also involved in discussion processes related to law and strategy designing, as well as in conservation area management through regional boards and the co-management experience. Environmental Services Payment Program (PSA) and recovery of forest coverage in 325,000 hectares in a period of ten years. Forest-grown wood = from 5% (1995) to 45% (2003) Diversification of wood products Source: Estado de la Nación, UNDP and European Union, 2000.


Slide19: HARMONY WITH NATURE Valuation of biodiversity on land = description of 17% of Costa Rica’s species (90000) In 2003, Costa Rica became the first Latin American country with official regulations for the access to genetic resources. CARTA mission, mapping and gathering of information on atmospheric, environmental and land use with high-precision instruments (NASA, CENAT) Reduction of organic contamination in rivers generated by improvements in coffee farms. Source: Estado de la Nación, UNDP and European Union, 2000. .


Slide20: HARMONY WITH NATURE : Challenges Limitation of resources. Decrease of tourists in national parks = 60% (1993) to 38% (2003) Fishing in general and shark slaughter (fins-cartilage) In the industrial sector, only 8,5% of the enterprises have some kind of sewage treatment Use of prohibited pesticides (decreasing in exports sector such as in ornamental plants and fruits) Air pollution and vehicle revisions (RITEVE) Environmental impact studies for productive activity (SETENA) Source: Estado de la Nación, UNDP and European Union, 2000.


Slide21: HUMAN DEVELOPMENT 2004 Human Development Index (UNDP) = 0,834, in which Costa Rica ranks in the 45th position among 177 countries, and as a country with high human development (above 0.800). Life expectancy = 78 years of age. Social security system Access to education. The index is a competitive advantage Demographic structure of a developed country Existence of a demographic bonus Source: Estado de la Nación, UNDP and European Union, 2000.


Slide22: THE GOVERNANCE SYSTEM: RESEARCH AND DEVELOPMENT, INNOVATION AND TECHNOLOGY TRANSFER IN KNOWLEDGE-BASED ENTERPRISES IN COSTA RICA Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide23: GENERAL ASPECTS OF KNOWLEDGE-BASED ECONOMY Innovative enterprises with high levels of productivity, technology, investment in human resources and search of new opportunities Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide24: Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 COSTA RICA Innovative country?? Technological transfer country?? Does it generate knowledge or does it absorb knowledge?? INDICATORS 49th country in technology index and in facility to establish new enterprises 28th country in innovation index Surrounding environment does not facilitate innovation, but...


Slide25: Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 KNOWLEDGE-BASED ECONOMY Macroeconomic stability Education coverage, but must extend coverage and studies in science and technology Highly qualified labour Tariff policy propitiates technology transfer Policy on attraction of foreign investment Enterprise link-up programs Research and development


Slide26: Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 KNOWLEDGE-BASED ECONOMY Diversified productive sector Large amount of high-technology multinational companies Intellectual property regime Risk capital and interests that facilitate productive activity are weak


Slide27: RESEARCH AND DEVELOPMENT IN COSTA RICA Research and development is important in Costa Rican enterprises Particularly in the services sector Investments are made on personnel, and to a lesser extent, in private organizations and universities. Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 INVESTMENT IN RESEARCH AND DEVELOPMENT Costa Rica 0,35% of GDP United States 2,67% of GDP Canada 1,5% of GDP Mexico 0.34% of GDP Chile 0.63% of GDP Argentina 0.47% of GDP


Slide28: ENTERPRISES WITH INNOVATION AND DEVELOPMENT AgrIculture (54%), includes ornamental plants, seeds and fruits Industry (32%), includes chemical, textile, paper industry and others Services (60%), includes software, banks, consultancy services and others Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 SUB-SECTORS WITH MORE RESEARCH AND DEVELOPMENT Software ( 95%) Banks (70%) Consultancy services (60%) Seeds (60%) Ornamental plants (58%)


Slide29: INNOVATION IN COSTA RICA Enterprises that invest in training are innovative Improvements in product, package design, or new products are generated Improvement in quality, productivity, sales and export Few enterprises patent their products Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide30: TECHNOLOGY TRANSFER IN COSTA RICA Costa Rica adopts and adapts technology The creation volume is not very significant yet, with the exception of software United States is the business partner, but maintenance is taken on by Costa Rica University-enterprise link is slow Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 ATTRACTION OF INVESTMENTS Government programs attracted 50 high-technology enterprises Link-up programs (2 years) have produced 32 links and 80 projects in progress


Slide31: UNIVERSITIES AND INNOVATION The system is not demand-driven; instead, it is a university initiative (53% of services linked to research and development) There is access to information technologies but human resources are scarce Existence of brain drain Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 RESEARCH UNITS IN UNIVERSITIES Exact and natural sciences = 20 Agricultural and livestock sciences = 9 Engineering and technology = 14 Health sciences = 7


Slide32: UNIVERSITIES AND INNOVATION: FUNDS 64,1% = University budget 22,2% = Link with enterprise 13,8% = International cooperation Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide33: NATIONAL INNOVATION SYSTEM There are knowledge clusters with enterprising programs and business incubation programs An enterprise link-up program is running Costa Rica and Venezuela are the leading Latin American countries in the development of patents (World Bank) Costa Rica’s National Innovation System is part of the National Science and Technology System Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide34: NATIONAL INNOVATION SYSTEM Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004 Technology Metrology Children CEGESTI Health Universities Social Security Legislative Assembly President of Costa Rica National Plan of Development Ministries


Slide35: NATIONAL SCIENCE AND TECHNOLOGY PROGRAM (2002-2006) OBJECTIVES Knowledge-based economy Poverty reduction and improvement in quality of life Economic growth based on research, innovation, adoption of technologies, process improvement Democratization of knowledge and environmental protection Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide36: NATIONAL SCIENCE AND TECHNOLOGY PROGRAM (2002-2006) KEY AREAS Advanced internet and better information technologies and infrastructure Strengthening of national science and technology system Strengthening and increase in human capital Promotion of a scientific and technological culture National Quality System External cooperation Investment in research Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide37: NATIONAL SCIENCE AND TECHNOLOGY PROGRAM (2002-2006) ACTORS Ministry of Science and Technology Public entities Private entities Universities Non-profit organizations (CEGESTI, others) Other actors Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide38: STRATEGY 21TH CENTURY-COSTA RICA The next 50 years Participation of diffrent stakeholders of Costa Rican society Source: Gobierno de Costa Rica, 2005 GROUPS Natural Sciences and Math Biodiversity and Ecology Health Education Economy Social Sciences Engineering Digital Sciences Agricultural Sciences Biotecnology


Slide39: STRATEGY 21TH CENTURY-COSTA RICA The next 50 years Participation of diffrent stakeholders of Costa Rican society GROUPS IT Telecomunication Electronics Space Sciences Manufacturing Systems Environmental Engineering Other Topics Source: Gobierno de Costa Rica, 2005


Slide40: FINAL REMARKS: COSTA RICA High social development index Population with high level of education Social and political stability Productive sector that carries out R/D and innovation activities Significant amount of multinational high-technology enterprises Commercial liberalization and technological transfer Biological richness Exploitation of environmental market niches, social responsibility and high technology Quality is the country’s main goal Still does not have a fully mature national innovation system Requires an educational policy more lined up with scientific-technological policy Must maintain national innovation surveys Needs to encourage greater link with universities Number of patents must be increased Source: CAATEC, Innovación y Tranferencia de Tecnología en el Sector Productivo Costarricense. 2004


Slide41: SECOND INTERNATIONAL CONFERENCE ON THE PROCESS OF INNOVATION AND LEARNING IN DYNAMIC CITY-REGIONS Costa Rica, a Dynamic City-Region INNOVATION AND DEVELOPMENT IN COSTA RICA ROGER S. FORBES A. BANGALORE, INDIA JULY 14, 2005