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

  


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