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April 13, 2016
The continued economic rise of Latin America and its strength during a world economic crisis has been termed by its inhabitants as ‘El Boom’. Usually recognised for its natural resources and exports such as oil and copper to Europe, China and the US, the region, realizing that it cannot rely on its raw materials forever has begun to search for other profitable avenues. In an unreliable, volatile world market and economy, Latin American leaders and politicians have started to look for alternative courses of action through entrepreneurship and innovation.
Innovation combined with the successful implementation of entrepreneurship and the creation of enterprises has been an important turning point for the economies and future of Latin America. This recent change has brought with it healthy results, creating a spread of wealth which in turn has reduced the poverty figures and raised the number of those in the middle-class. The push for innovation and enterprise has also created a growing job market, improvement to living standards and technological innovation. However, with a less than stable economic and political history it comes as no surprise that the very essence of entrepreneurship and risk-taking, goes against the instinct of Latin Americans. Trying to promote enterprise in a region with a risk-avert population that seeks careers and supports larger corporations instead of taking risks in the market by starting their own business or career within a new business start-up.
The emphasis on innovation and the future intentions of Latin American countries was made clear at the end of July 2013, when a group of innovation leaders from 18 countries, of which 12 were from South America came together in Santiago, Chile. This momentous occasion was the first ever Pan-Latin American Innovation Summit to be held and its importance warranted the appearance of the Chilean President and Minister of Economic Affairs. This move for the first innovation summit in Latin America comes on the back of a rapid increase in innovation taking place throughout the continent.
Not too long ago, Medellin, Colombia was once facing a large drugs trade problem but it has turned over a new leaf and at the beginning of 2013, the city was voted the most innovative city in the world. Today, the Colombian city is a centre for innovation, education and entrepreneurship. Schemes to promote social development and enterprise have been rolled out across the region such as Uruguay providing a laptop for every child in the country. The innovation boom taking place in South America has attracted attention from outside of the region with ‘The Economist’ naming Santiago, ‘Chilecon Valley’, the Silicon Valley of South America. Santiago has gained this reputation due to the entrepreneurial atmosphere established by the Chilean government that has laid out the grounds for innovation.
Due to developments such as those mentioned above as well as increased foreign investment in the region, Latin America is slowly redrawing the economic map of the world. In doing so, integration and alliances between South American countries has helped to further the development of their economies. In June 2012 an economic alliance known as, the Pacific Alliance was created between Chile, Colombia, Costa Rica, Mexico and Peru which included free trade agreements, the economic integration of services, capital investment and free movement of people. The importance of this alliancecan be seen with Australia, China, Canada, France, Japan, South Korea and the US all asking for observer status at the first meeting that will be taking place in November 2013.
The world outside of Latin America therefore needs to change its perception and stereotypes when looking at the region. South America is a region full of opportunities but there is no shying away from the need for political and business unison. With innovation driving today’s world economies, now is as important as ever for Latin America not to rely on only the extent of their raw materials but instead on creating a sustainable future through innovation and entrepreneurship.