For companies and countries, innovation is an essential part of sustainable competitive advantage, increased productivity and economic progress.
Innovation acts as a key determinant of long-term growth by improving ways of combining capital and labor.
About half of the disparity in income levels and growth rates between countries due to differences in total factor productivity.
Studies have concluded that investment in research and development explains up to 75% of the differences in total factor productivity growth rates.
A decisive factor for an economy based on knowledge is the exponential growth of information generated by the expansion of information technology and communications.
The Bank’s operational and knowledge-related tasks in this area will be based on:
-Boosting investment in key public goods for innovation, such as scientific infrastructure and research, technological institutes and certification institutions, the formation of advanced human capital, and the promotion of scientific and technological new ventures.
-Fostering an enabling environment for private investment in innovation and connectivity through improving access to relevant information, promoting competition policies, deployment of innovative public procurement mechanisms, strengthening the business climate, and supporting connectivity.
-Promoting actions to fix market failures, that limit business innovation, via financial and nonfinancial stimulus mechanisms for R&D activities in companies, increasing support for technological extension and adoption of technology. Increasing support for centers of excellence, technology consortia, incubators and accelerators, and financing of venture capital funds including cluster formation and the development of suppliers and value chains.
-Strengthening key institutions to drive innovation, such as building institutional capacity, rolling over challenge- and mission-based Science Technology and Innovation (STI) strategies, and promoting intellectual property.
-Implementing an advanced knowledge agenda seeking to increase knowledge on the supported programs and policies' effectiveness, complementing it with a knowledge agenda on a series of relevant issues on which there is insufficient information.