Beyond the stories we are told and the movies we watch, it is worth noting that innovation, in its traditional conception, does not seem to benefit all enterprises, organizations or entrepreneurs that want to partake in it. This is due to a variety of factors, and, without oversimplifying, the most important of these factors is resources.
By resources we don’t only mean capital. Access to technology, markets, support and sponsorship networks, methodology and tools, access to people with knowledge and talent, science and time (which innovation requires a lot of) are all part of the game. The problem with resources is that they are not always available and often depend on the environment in which innovation takes place.
Access to these resources becomes especially complicated in developing economies, as capital, technology and time can be scarce. In countries such as Mexico, over 90% of human talent works in Small and Medium Business (PyMEs, for its Spanish acronym); this percentage does not change much in the rest of Latin America or the growing economies of Africa. It does not come as a surprise that these enterprises have limited resources to operate, compete and grow, and their government’s efforts tend to be focused on strengthening their capabilities, given a large percentage of these nation’s economies depend on these enterprises.
It is thought, not without reason, that innovation is a desirable path to bolster growth in developing economies. This is because, through innovation, businesses and organizations can create products, services, processes and results that allow them to access new markets, be more efficient, compete on more even ground and, thus, prosper. In truth, it is not a bad idea. Innovation seems like the best way forward, and this is why governments, international organizations and initiatives of all kinds have pushed for development focused on innovation across the world.
Economy is at the center of what all of this seeks to improve, given how important PyMEs are for it. Innovation presents itself as a good alternative so these businesses create new products, services, processes and results to make them more competitive and successful. However, if traditional innovation requires a lot of resources and an ideal environment, how can we expect businesses with limited resources to access this Holy Grail of competition that seems to only be within reach of large organizations with plenty of resources?
Here lies our paradox: several institutions in developing economies bet on an innovation model that is of little use for companies that make up the largest percentage of economic growth and only widen the gaps of accessibility to innovation given it is only accessible to the largest organizations. Can we make the claim that traditional innovation is only creating wider gaps in competition worldwide? yes. All you need to do is look at statistics such as the Global Innovation Index (GII) and identify which economies are ahead (those of the richest countries in the world). The smaller the economy, the lower its GII will be.
I do not want to villainize innovation, as I have previously spoken of its benefits. Besides, I believe it is a tool that can trigger the competitive processes that we desire in Mexico and Latin America. However, it is important to highlight the need to apply different innovation models that fit the different realities of these countries. I uphold the idea that developing economies do not need “unicorn” enterprises, as they only serve to show off. It is necessary that we apply models that support the creation of conditions that favor large-scale innovation and entrepreneurship in a logic of ecosystems, within which what benefits one will benefit others.
