The 7 Pillars of Innovation
“Innovation is seeing what everybody has seen and thinking what nobody has thought.”–Dr. Albert, Szent- Györgyi
Being part of the G20 does not guarantee that a country will be innovative and develop. An example is the case of Mexico. Most people see Mexico as a touristically attractive country with great natural resources, a privileged border with the United States and cheap labor.
Mexicans see themselves as creative, social, and entrepreneurial. However, the WIPO innovation index presents Mexico as a mid-table country in 55th place out of 131 despite being the 15th largest economy in the world.
The world of innovation requires several elements to be truly successful in driving economic development and the genuine well-being of families. The main elements to consider are:
- Institutions (Mexico ranks 74 out of 131)
Undoubtedly, public, and private institutions are a fundamental element to generate innovation and development. It is imperative that each country promotes positive political (Mexico 88/131), regulatory (92/131) and business (37/131) environments. Mexico will need to address endemic and structural problems of corruption and insecurity.
- Human capital and research (58th out of 131)
One of the main drivers of innovation is people; not only do people need to be creative by nature, but formal education (78/131), university training (77/131) and research and development (41/131) are required. Investment in quality education is a mechanism to generate social mobility and a better distribution of wealth. This is one of the major challenges facing most emerging economies; according to the OECD, only 17% of adults aged 25–64 in Mexico have a higher education degree.
- Infrastructure (59th out of 131)
Emerging countries like Mexico could learn from developed countries that invest substantially in information and communication technologies (50/131), technological infrastructure (78/131) and ecological sustainability (57/131). China and India set an example in terms of the technification of their populations, which is driving innovation and economic development. Currently in Mexico only 2.8% of GDP is spent on infrastructure whereas in economies such as China this represents more than 30% of GDP.
- Market sophistication (59th out of 131)
Access to credit (61/131), investment (113/131) and fostering trade, competition and having a large market (14/131) support a country’s development. Governments must cooperate with private initiative to foster a sophisticated market that translates into economic growth. In Mexico, private investment amounts to 17% as a proportion of GDP, which represents more than 87% of total investment in the country; however, it has fallen significantly in recent years.
- Business sophistication (59th out of 131)
Even though the Mexican population is very sociable, there is still a low propensity for teamwork, which can be exemplified by the lack of success of sports teams in international competitions such as the World Cup and the Olympics. It is imperative to develop intellectual workers (72/131), foster innovation links (89/131) and knowledge absorption (41/131).
- Knowledge and technological performance (55th out of 131)
We are in an era of knowledge, being able to create it (74/131) through patents and scientific articles that have a tangible impact (58/131) on new businesses and that can be disseminated (38/131) both within the country and internationally are essential factors for generating innovation. Unfortunately, these elements are not being promoted in Mexico as they are in other countries such as Israel.
- Creative outputs (54th out of 131)
Creative outputs through intangible assets (60/131) such as patents, global brand value and industrial designs of origin together with the creation of creative goods and services (17/131) such as films, entertainment, and artistic products, as well as online creativity (80/131) represented by the creation of mobile applications and websites are essential pillars that foster innovation and cutting-edge technological status in any country.
Mexico is a recipient of foreign innovation due to its large market size, proximity to the United States and lack of local innovation. That is why entrepreneurs from all over the world are coming to Mexico looking for success; for example, Kavak from Guatemala, UnDosTres and Oyster from India, Jokr from Germany, Gaia from Europe, Grin from Belgium, BNext and Cabify from Spain and Rappi from Colombia, among others.
To have a genuine culture of innovation with a real impact on the country’s economic development, a quantum leap is needed with the participation of all those involved in creating a new culture of innovation. Every country must recognize and learn from its failures, otherwise it will be destined to repeat them.
“The only way to discover the limits of the possible is to go beyond them into the impossible.”- Arthur C. Clarke
Note: please refer to the original publication at EL CEO: Los siete pilares de la innovación (elceo.com)
Hector Shibata. Director of Investments & Portfolio at ACV a global Corporate Venture Capital (CVC) fund and Adjunct Professor for Entrepreneurial Finance.
Ricardo Latournerie. VC Investor at ACV.
ACV is an international Corporate Venture Capital (CVC) fund investing globally in Startups & VC funds.
Stay updated about Venture Capital, innovation, entrepreneurship and more! Sign up for AC Venture’s monthly Newsletter.
Follow us on LinkedIn: ACV_VC
Follow us on Twitter: acv_vc
Follow us on Spotify: ACV_VC
