The Potential for innovation in mining value chains. Evidence from Latin America
Michiko Iizuka, Carlo Pietrobelli & Fernando Vargas
#2019-033
This paper tries to broaden the scope and understanding of innovation in
the mining sector, with a focus on emerging countries based on the
experience of Latin America. It discusses the innovation processes that
are developing in the mining sector of emerging countries, and uses the
global value chains (GVC) approach to analyze the potential available to
local firms. The focus is on all forms of innovation, not only those
eventually subject to patenting, to include innovations in products and
processes, but also in business, marketing and organizational models and
practices. The new features of scientific knowledge applied to the
mining sector (e.g. ICT, new materials, biotechnology) open new
opportunities for new suppliers to enter and add value in mining GVCs,
and we illustrate this point with specific examples of Latin American
suppliers.
However, in developing this argument, we cannot forget that in most of
Latin American mining there is insufficient supply of local knowledge,
indicators of R&D expenditures and researchers involved show a
significant lag with respect to advanced countries. Multinational mining
companies have not traditionally conducted intensive R&D activities near
their operations, and local universities do not tend to specialize in
scientific topics directly linked to the mining industry. The paper
concludes by arguing that there is a need to rethink and innovate policy
approaches, if countries aim at scaling up and broadening the many good
examples of innovative suppliers.
JEL Classification: O13, O32, O43.
Keywords: Global value chains, Natural resources, Mining, Latin America, Innovation and learning, public policies