Wednesday, May 16, 2007

Science and technology development in Latin America

In 2006 the National Science Foundation published their science and engineering Indicators for 2006. There is little mention of Latin America, especially Venezuela, although the NSF does conclude that there are several nations that have made tremendous technological advances over the past decade and are positioning themselves for further technological development to become high-tech exporters.

Based on the four indicators below and looking at 15 countries they conclude that Mexico and Argentina are trending upwards in technology development to become new high-technology exporters. Even though Brazil declined in 2003 vs. 1999, seeing in 2005 a higher score vs. 1999, it is still the best positioned of the Latin American countries scored for technology development and eventual export. Venezuela, the only other Latin American country scored, saw a similar decline in 2003 raising in 2005 but still the it had lowest (along with Indonesia) score among the 15 countries studied.

Composite Score

Leading indicators used to determine the potential for 15 countries surveyed to become more important exporters of high-technology products during the next 15 years

National orientation— evidence that a nation is taking action to become technologically competitive, as indicated by explicit or implicit national strategies involving cooperation between the public and private sectors.

Socioeconomic infrastructure— the social and economic institutions that support and maintain the physical, human, organizational, and economic resources essential to a modern, technology-based industrial nation. Indicators include the existence of dynamic capital markets, upward trends in capital formation, rising levels of foreign investment, and national investments in education.

Technological infrastructure— the social and economic institutions that contribute directly to a nation's ability to develop, produce, and market new technology. Indicators include the existence of a system for the protection of intellectual property rights, the extent to which R&D activities relate to industrial application, competency in high-technology manufacturing, and the capability to produce qualified scientists and engineers.

Productive capacity— the physical and human resources devoted to manufacturing products and the efficiency with which those resources are used. Indicators include the current level of high-technology production, the quality and productivity of the labor force including the presence of skilled labor, and the existence of innovative management practices.

Raw scores broken up into the 4 leading indicators

The NSF cites Venezuela specifically for its low score:

"Venezuela received the lowest composite score of the economies examined. It was rated low for all variables, but mostly suffered because it was considered the riskiest or least attractive site for foreign investment. Indonesia and Argentina also received consistently low scores on each variable, but mostly were affected by the very low expert ratings of their national strategies for high-technology development."

The graph below shows the number of science and engineering publication each country has published in the according years. Supporting the above information we can see that Brazil is the leading Latin American country for S&E publications growing at an exponential rate. In addition, Mexico and Argentina are also steadily increasing their number of publications although in a linear fashion. The remaining Latin American countries (ie. Venezuela) have remained fairly steady since 1988, although Chile since ~2000 has been increasing it publication rate.

The graph below is one that I find rather disturbing, showing the number of first university degrees by region comparing 1997 and 2002. North America, Asia, Europe and Africa all show an increase in first university degrees in engineering, natural sciences and social/behavioral sciences. Central and South America is the only region that had an overall decline in first university degrees primarily due to a sharp decrease in engineering degrees awarded.

In summary, Brazil seems to be the best positioned to lead Latin America in science and engineering, and technology development. Venezuela on the other hand lags far behind with little hope of catching up as stated by the NSF report: [Venezuela] suffered because it was considered the riskiest or least attractive site for foreign investment. Since foreign investment in Venezuela has steadily declined there is little hope of significant investment in science in technology or its transfer to economically profitable products for the domestic or international market.

The Venezuelan Ministry of Science and Technology have now mandated that companies above a specific income level will have to pay a certain percentage "tax" that will be used for science and technology development. While at first this may seem a good idea there are a couple of potential problems with it. 1) The "taxed" money could be used by the company to invest in its own technology development improving its own efficiency and productivity instead it is going to the government. 2) Government officials will be responsible for allocating money for technology and science development, this increases the probability of corruption, misallocation of funds, and funding non-economic profitable technology. However, if administered correctly this "tax" may help S&E technology development, but so far the Venezuelan government has shown little capability of running things efficiently or effectively.