Libro Blanco Vol I en Ingles

TOWARDS A NATIONAL INNOVATION STRATEGY FOR COMPETITIVENESSVOLUME 1economy. [see Figure 2]As a starting point on this journey –which is without a doubt more demanding– we propose combining theadvantages of the natural resource export model with the abilities created by a growing endeavour in thecreation of human capital and knowledge, which, applied to the transformation, extension and linkage ofproduction processes, allows taking the leap to sectors based on competitive acquired advantages, as well asthe development of service businesses or the externalization (outsourcing) of highly specialized functions.The Council therefore reaffirms its certainty that the synergy between high level human capital,technological innovation and natural resources will permit Chile to successfully face the tough internationalcompetition, to continue growing in the global market and to each day create more and better jobs for a moreskilled labour force. However, before making any other analysis, it is essential to present the foundations thathave led to the conclusion that this path to development is the right one for Chile to focus on over the nextyears.Historically Latin America and Chilehave turned their backs on naturalresource intensive industries, in thebelief that they do not have a strongdynamism in terms of Total FactorProductivity, which is that part ofgrowth that is not accounted for by theaccumulation of production factors(capital and work) but instead byelements such as the quality of humancapital, technology and knowledge.Two conflicting visionsIdentifying the best formula for growth has surely been the most recurrent discussion in Chile and aroundthe world, particularly in the last 60 years. In this respect, two sharply differing visions have confronted eachother: one, that holds that countries abundant in natural resources must base their growth on the rentsgenerated through this advantage; and another, that claims that betting on development based on this system isa sure path to stagnation, because manufactured products have a greater possibility than natural resourceintensiveindustries of adding value to products through the addition of knowledge and technology. The latestevidence indicates that an increasingly significant part of the growth of countries cannot be explained by thesimple accumulation of production factors (capital and work), establishing the idea that this difference –termedTotal Factor Productivity or TFP, in which human capital, technology and knowledge are fundamental – tends tobe greater when the productive range of a country is more intensive in industrial activity than in the productionof commodities.Thus, the presumption of a greater potential for technical change in manufacturing activities linked tothe great volatility of commodity prices between the First and Second World Wars, led many natural resourceabundant countries, especially in Latin America, to commence a period in which protectionist policies – basicallythrough import tariffs – were used to foster the development of local manufacturing industry that initially arose24