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If one had to choose a single word to summarize the causes of economic underdevelopment in Latin America, it might be “productivity.” On average, a Latin American worker in the 1970s produced 82 percent of the output of a U.S. worker; today, this ratio would be closer to 55 percent. The phenomenon of low productivity has been around for decades in Latin America, and no country—not even Chile—has been able to solve it definitively. 

Innovation is crucial to overcoming low productivity. But what type of innovation is required? Should it be left to managers to decide? Should governments intervene, and if so, what tools should they use?

In this report co-published by the Wilson Center’s Latin American Program and the Vidanta Foundation, 2017 Wilson-Vidanta Fellow Santiago Gutiérrez discusses how to make large Latin American firms more innovative and productive—and thus, better engines of economic and social growth. His research offers clues for how to spur a new wave of corporate success in Latin America and dispels common myths about innovation, including:

  • Misconception #1: Innovation = creativity.
  • Misconception #2: Innovation is some sort of miracle, not an everyday job.
  • Misconception #3: Entrepreneurial enthusiasm and optimism are enough to foster innovation.