sustainable development 20 years on from the ... - José Eli da Veiga

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The second productivity feature distinguishing the Latin American and Caribbean from the
developed economies is the internal gap, which refers to productivity differences between and within
different sectors. Again, the experience in the United States serves as a comparison. The structural
transformation of the past few decades increased productivity throughout the United States economy.
Conversely, Latin America witnessed no structural shift towards knowledge-intensive manufacturing
sectors between 1990 and <strong>20</strong>07. In Latin America, both in 1990 and <strong>20</strong>07 the highest-productivity sectors
and those that added the most manufacturing value were natural-resource-intensive (ECLAC, <strong>20</strong>10a).
The productive structure post-<strong>20</strong>03 is qualitatively different from that of earlier decades, with
import coefficients rising faster than export coefficients in the manufacturing sector. Although in several
countries of the region technology-intensive sectors have grown faster than other branches of industry, they
have not recovered the relative weight they had in previous periods. In addition, spending on research and
<strong>development</strong> and other public policy efforts essential for leveraging <strong>development</strong> had already weakened and
the public sector’s institutional capacities for developing manufacturing had atrophied before <strong>20</strong>03. In some
cases, industrial policy had been abandoned altogether (Katz and Stumpo, <strong>20</strong>01).
The sharper increase in import than in export coefficients in manufacturing underscores the
difficulty of the industrial productive apparatus in competing in most sectors. As a result of this weakness
and given the sustained increase in domestic demand, industrial trade balances are either running higher
deficits or posting waning surpluses. The trade balance deterioration has been offset in recent <strong>years</strong> by
high prices for the region’s agricultural and mining exports, heightening the economies’ specialization in
the export of primary goods and increasing pressure on natural resources and land-use changes which
threaten forest cover and biodiversity (ECLAC,<strong>20</strong>10a).
The expansion of natural-resource-intensive sectors has few positive effects on overall
technological capabilities. These sectors undoubtedly adopt technology, but mainly imported technology,
and their lack of an endogenous capacity to innovate minimizes the catalytic role of learning. These
sectors are, moreover, characterized by continuous-production processes which, by definition, are more
difficult to break down into discrete spatial and temporal phases. Hence, they offer far fewer opportunities
for generating subcontracting linkages with other firms and therefore for transferring know-how and
technology to other activities and enterprises (for example, to SMEs). Natural-resource-intensive sectors
also have less capacity to generate backward and forward linkages, owing to the “technological
strangeness” between existing activity and the new activities that are to be generated.
Patterns of research and <strong>development</strong> are a key factor in this scenario. But not even the most
advanced countries of the region have reached the level of investment in relation to GDP of European
countries, Japan or the United States (see chapter V).
It is clear that technological change in Latin American industries has been limited and inadequate
in light of the challenges posed by a production structure that is more open and more integrated into
international trade and by the objective of achieving <strong>sustainable</strong> and inclusive <strong>development</strong>. The situation
may become even more difficult in an international context in which, for several <strong>years</strong>, technologies and
production processes have been changing in response to increased ICT use in production processes. Yet
the expansion of the global economy has opened up opportunities. Inasmuch as external conditions are
more favourable than they were in previous decades, the countries of the region which export primary
goods should be able to tap the revenues from higher international prices to boost policies on learning and
investment in research and <strong>development</strong>.