What is expected from the new institutional framework?


The design of a new government department to oversee the sustainable development of science and investment in R&D+i lies at the heart of the debate. Authorities from across government, Congress, academia and the business world are making calls to prioritize the coordination of the ecosystem and the redistribution of responsibilities. Only then will attention turn to the role of Corfo in the wider process.

By Fabiola Venegas

It has been a long-standing objective to transform the idea of an entity dedicated to science, technology and innovation into a tangible reality and new legislation. But in January 2017, the executive branch of the Chilean Government submitted a bill to Congress which aims to enhance the links between universities, research centers, businesses and the State to that effect, as well as to narrow the gap between the worlds of academia and production.

The initiative establishes the future ministry as responsible for guiding nationwide scientific and technological development, including via local secretariats at the regional level. It will also be in charge of incentivizing dialogue to gauge the current requirements of Chilean society via a science, technology and innovation system. This ministry will fulfil its role by executing distinct strategic policies that will be set according to the guidelines of the National Council of Science, Technology and Innovation for Development. In addition, it will implement a series of short-term measures through the Research and Development Agency, which will replace the National Commission for Scientific and Technological Research (CONICYT).

An Interministerial Committee will also be established to advise the Chilean President on related matters. This Committee will be led by the new Minister of Science and Technology and will also include the participation of the Ministers of Economy, Education and Finance.

The new institution will have a number of objectives, one of which will be to generate the necessary conditions to enhance the quality and quantity of initiatives related to research and development (R&D). In 2015, such initiatives in Chile represented 0.39% of GDP (CLP$607.408 billion), which is far lower than the average of 2.38% among member States of the Organisation for Economic Co-operation and Development (OECD). This 2015 figure comes from the VI National Survey on Expenditure and Personnel in R&D compiled by the Ministry of Economy, Development and Tourism.

The challenge of increasing public expenditure is viewed as urgent, although while the executive branch aims to reach the figure of 1% within ten years, the Senate commission in charge of this particular topic of debate views the most adequate timeframe as closer to four years.

The bill to create the new ministry will imply a fundamental change to the current system. This system is primarily based on CONICYT promoting basic and applied sciences, although certain areas such as the Millennium initiative depend on the Ministry of Economy, while the development lines for productive purposes are overseen by Corfo. As a consequence, this institutional redesign is one of the key issues that will be subject to ongoing debate. Despite widespread consensus that the main responsibility for such areas should be adopted by the new ministry, actors from across the ecosystem hold different views on how to divide certain duties, especially in terms of the role to be played by Corfo.

Likewise, following the approval of the idea to pass legislation on this matter last May, the Senate’s Future Challenges Commission, which has led the Congressional debate, has submitted 155 amendments to the bill. These amendments have ranged from including the word ‘innovation’ in the title of the ministry, to the proposal of greater powers of promotion in this field.

Moreover, the executive branch has submitted 15 lesser amendments and discussion will soon turn to more in-depth measures related to innovation, resources and jurisdiction.

Expectations of ecosystem actors

In contrast to the current profile of CONICYT, front line academics and researchers hope that the future ministry will take on a long-term political dimension with guidelines that aim to resolve shortcomings in areas such as the reintegration of professionals returning to Chile from abroad.

“A generation of scientists is being produced from across all the disciplines, but they are harboring a sense of frustration for not being able to contribute to the country to which they are committed”, stresses María Teresa Ruiz, President of the Chilean Academy of Sciences.

Similarly, the Research Vice President of the Universidad Católica, Pedro Bouchon, agrees that the new ministry should support new ways of promoting young talent through a system of scholarships to finance doctorate studies for work undertaken in conjunction with industry. Accordingly, Ruiz highlights the importance of two key aspects: “technical training and doctorate training going hand in hand”, adding that the two together will “help Chile take the great leap towards development. Today we are in the middle, in the professionalization phase, and I think this is appropriate”, he states.

Towards that end, Bouchon also warns of the need to safeguard the sphere of action of the director of the agency that will replace CONICYT. He recommends that this position be accompanied by an advisory board to monitor its management on matters such as creating new competitions and reducing some of the challenges associated with such an approach, including the high number of rulings that are generated on an annual basis.

From the perspective of the business world, actors expect the new ministry to devise policies that stimulate conversation between all parties involved in order to drive R&D and innovation (R&D+i) forward. At present, “incentives for scientists are incorrectly aligned because they publish (their research) but do no patent. (In addition) they are not immersed in the reality of production and they do not believe that relationships with business are possible. (Consequently) their mental outlook towards development is very different to that of businesspersons”, says Raúl Ciudad, President of the Chilean Association of Information Technology Companies (ACTI).

“On the contrary”, he continues, “businesspersons do not believe that PhDs can be viewed as university services, but rather as doctorate degrees in themselves, and that doctoral researchers are not being recruited because large companies do not yet feel they need them”. To date, only 30% of R&D expenditure came from the private sector in 2015, a trend which has been consistent since 2009. As such, the trade association representative contends that the major challenge for businesses is to increase their overall percentages in areas related to innovation.

Despite such figures, there are positives in this field. In 2016, 195 projects were certified for CLP$76.4 billion from the Tax Incentives for R&D Act: a 28% rise on 2015. Corfo expects to exceed these levels for 2017, having set a goal to reach close to CLP$90 billion.

This discrepancy is precisely one of the key tasks facing the new ministry. It is also one of the challenges that the President of CONICYT and the leading proponent/architect of the bill, Mario Hamuy, sees as needing to be met. He claims this could be done via improved integration to resolve certain pending issues in relation to coordination between the responsible entities. This, he states, includes the key roles played by the new Council of Science, Technology and Innovation for Development, which will formally institutionalizes the current entity, the National Council of Innovation for Development (CNID).

Via an Interministerial Committee, this new entity will be responsible for transferring the long-term strategies to the new ministry for their execution through appropriate policies. “The body for coordination has been created and defined, and this Interministerial Committee will be in charge of drawing up the corresponding policy and action plans according to the tasks it is conferred”, clarifies Hamuy.

How much will be transferred from Corfo?

In conjunction with the central tenets of the new government department, one of the key questions being discussed relates to the role of the ministry in the field of innovation. The subsequent answer to that question lies in clarifying the future role of Corfo. In fact, the members of Congress involved in this discussion indicate that one way to streamline the Congressional process is to reassign the ministry certain responsibilities from Corfo. This could, they claim, include the transfer of instruments such as the Technology Transfer Hub, as well as the program for the consolidation of Offices of Transfer and Licensing, and the program for the training of Offices of Transfer and Licensing. In 2016, each of these programs oversaw a budget of CLP$2.628 billion, CLP$1.608 billion and CLP$520 million, respectively.

These and other proposals have been discussed by a technical working group composed of senators from the Senate’s Future Challenges Commission and the executive branch. Currently, spending on innovation driven by Corfo is delivered through its Technology Capabilities Office, the budget of which was CLP$36.831 billion across 11 instruments, and InnovaChile, which allocated more that CLP$14.9 billion to business R&D+i, with a total of 82 project beneficiaries.

Accordingly, distinct actors operating in this area point out the Corfo’s sphere of action regarding innovation has not been determined with sufficient clarity in the bill. “The bill says that all innovation based on science and research will fall under the ministry, but it is not clearly defined and is somewhat dependent on the goodwill of the individual running Corfo”, warns María Teresa Ruiz.

Raúl Ciudad, who is also a member of the Innovation Committee of SOFAFA, stresses the importance of the future ministry being obliged to oversee coordination between the field of science and the private sector. However, he believes that this area has not been suitably covered in the design of the new institutional framework. Despite his recognition of the scope of influence of Corfo, Ciudad questions the agency’s vertical nature, which is similar to that of CONICYT. Indeed, he contends that there has never been an institution based on an R&D+i model that is conducive to building a national development strategy.

“The Chilean President should lead the research, development and innovation of the country and create the institutional framework necessary for the design of a national development plan and strategy that consists of distinct, pre-determined measures for the next 10 to 15 years”, he underlines.

The Chair of the Senate’s Future Challenges Commission, Guido Girardi, warns that the structural design of the future ministry simply reinforces the dichotomy of the system, rather than “building an institutional framework that places science, technology and innovation at the service of the country”. While he is not in favor of dismantling the structure of Corfo that works in this particular area, he believes that an alternative would be to ensure its transfer to the new institution, and “that this is accompanied by an Interministerial Committee which includes the participation of the Minister of Economy and the Minister of Science and Technology”.

Girardi claims that the alternative option is to maintain two clearly defined agencies “in which one is in charge of the development of science, technology and innovation while the other adopts the more productive responsibilities of an agency, and whereby both are coordinated from this Interministerial Committee”.

Focus on innovation

One amendment to the bill that received unanimous approval by the Congressional committee was the inclusion of the word ‘innovation’ in the name of the ministry. A similar consensus was reached by the Council of Rectors of Chilean Universities (CRUCH), recalls Pedro Bouchon. Moreover, “I think the bill covers this area (innovation) to a certain degree and we have to be very emphatic in ensuring that it does indeed materialize”, he states.

For the presidential advisor, Mario Hamuy, it is far more prudent for the new ministry to take on the role of promoting innovation, especially that which relates directly to the field of science and technology, which is a task that is explicitly laid out within the bill. The key aspect, he adds, is to ensure ongoing coordination between the Ministry of Science, Technology and Innovation and the Ministry of Economy, with coherent policies that complement one another across the board.

According to Hamuy, the executive branch is reviewing the two sets of amendments received by the Senate’s Future Challenges Commission and is open to debate in order to reach a reasonable level of agreement, albeit one that conforms to the structure already submitted to Congress.

The development of science in Chile faces a number of challenges. Crucially, today it finds itself at an inflection point in terms of successfully achieving the new institutional framework that has been so long desired by actors from across the ecosystem. It is now the responsibility of distinct sectors to seek the required consensus that will best meet the needs of Chilean society in the 21st century.

 

More capital risk

Iván Vera, founder and President of INNSPIRAL, believes that the efforts to design a national system of science and technology in Chile are heading along the right path, with an emerging innovation blueprint, a growing risk capital industry and encouragement from Corfo. However, he warns that that major challenge is the lack of a strong risk capital industry such as that of other countries, including the United States, in Silicon Valley, and in Israel, which imported the US model to develop its own tech start-up industry.

Following the line of thought of Warren Buffet, Vera states that Chilean investors never invest in something they do not understand, opting rather for areas that they do, such as retail and construction rather than, for example, digital start-ups. For this reason, he believes that the role of the future ministry should be to promote technology transfer, as is the case in the ecosystem of the Massachusetts Institute of Technology (MIT). Before this can happen, he points out that the very first step is to reach a consensus in approving the new ministry’s framework, and to do so during this administration.

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