Innovation and Competitiveness

Abstract

Abstract This chapter examines the role of innovation and technological capability in the context of Latin American regional development. Focusing on the Brazilian case, a comparative analysis is performed to identify the innovative potential of regions and its determinants. The analysis also seeks to understand whether spatial disparities in innovative potential are increasing or diminishing. It is established that important drivers of regions’ innovative potential include per capita income, the degree of industrialization, and the proportion of large companies. Perhaps surprisingly, the chapter finds that spatial disparities in terms of innovative potential have been falling in Brazil. This is largely due to the impacts of public policy, though progress has been very slow. Further pursuit of more spatially dispersed innovation could form an important contribution to resolving the middle-income trap.