We Need to Defend Innovation in Latin America

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by Federico N. Fernández

We live in an era where great things have happened thanks to innovation. Everybody loves innovation and recognizes that is a force for progress. With the exception of maybe North Korea, no government in the world has an official policy to prohibit innovation or harass innovative people.

What’s more, innovation is so universally appreciated that even Venezuela’s dictator (and former bus driver) Nicolás Maduro recognizes its potential. In September 2019, his government conducted a census targeting innovators and scientists in order to find solutions for the country’s problems: the food and industry have collapsed. The government want to use the “creative capacities” and “genius” of the Venezuelan citizens, as the vice president Delcy Rodríguez said.

It seems that everybody loves innovation, right? In reality, things tend to be more complicated, though. Many times, appraisals for innovation are nothing but lip service. And the devil, as they say, is in the details.

The LatAm Scenario

A quick review of those details shows that many innovative ideas and projects are under attack in Latin America. For instance, Glovo, a very popular delivery app, has had its operations suspended twice in the city of Buenos Aires just this year due to alleged “traffic violations.”

Meanwhile, in Chile, a group of Senators has submitted a project to change the status of Glovo’s deliverers into full employees of the company. This regulation would destroy both the nature and business model of the company.

Vaping is another interesting example. There is a widespread prohibition on selling among most of the countries at the national level except in Chile and Colombia. In Argentina, as well as in Uruguay, Mexico, and Brazil, selling e-cigarettes is banned.

Nonetheless, the market is booming around the whole region. Why? Because these prohibitions are not usually enforced. However, prohibition hangs like the Sword of Damocles over the heads of everyone involved. Consequently, the situation of sellers and consumers is precarious. As in any other grey market, the lack of coherent rules and regulations distorts what could be a thriving economic activity and deprives consumers from proper supply.

The sharing economy is also a usual target. This year, Uber has been forced in Mexico City to establish minimum prices for its rides and not to charge in cash. These two things are a great threat to the company which claims it could lose up to 40,000 drivers as a consequence.

The legal status of Uber in Colombia is still grey. What’s more, the Constitutional Court recently overruled a norm that established a 25 years driving prohibition for Uber drivers…

Finally, in Chile brand violation has hit rock-bottom and one can find the world’s first faceless, plain-packaged Easter bunny. This is one of the biggest monstrosities ever witnessed by mankind. How joyless can you be to take away the beauty of chocolate for children? To add insult to injury, one of the ideologues of Chile’s extreme plain packaging policies was awarded for contributing “to world food security” by the UN’s Food and Agriculture Organization (FAO).

In spite of all these challenges, innovation must be embraced

Meanwhile, innovation is how people take matters in their own hands. And when we create new technologies or new business models they should be permitted by default. Unless a very strong case can be made against a new invention, innovations should be allowed to exist and be tested on the market by consumers. Doing the opposite is the real catastrophe, because, as Adam Thierer explains, “trying to preemptively plan for every hypothetical worst-case scenario means that many best-case scenarios will never come about.

This is, in a nutshell, why we’re launching the Latin American Alliance Somos Innovación (SI). We want to foster innovative solutions in our countries. We want to see them applied. We are the voice of a thriving civil society which wants to progress through innovation, the adoption of new technologies and human creativity.

Our vision is a Latin America turned into a fertile land for innovation and testing of innovative solutions. A continent where there is a generalized disposition of both the population and the governments in favor of the experimentation of new alternatives for the resolution of problems.

This is going to be a results-oriented organization (we want to provoke change and improvements in the issues we touch) and we want to emphasize positive messages and human stories.

In order to do this, we need your help. Visit our website at www.somosinnovacion.lat, join us on social media, and let’s unleash innovation together!

Federico N. Fernández is Executive Director at Somos Innovación (a Latin American pro innovation alliance), Senior Fellow with the ​Austrian Economics Center (Vienna, Austria) and Founder and President of ​Fundación Internacional ​Bases ​(Rosario, Argentina). He is also the Chairman of the Organizing Committee of the ​International Conference ​“The Austrian School of Economics in the 21s​t Century.”



The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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