1 Joaquín Cordua Washington DC, February 2007 THE CASE OF FUNDACION CHILE 30 YEARS BUILDING INNOVATION CAPACITY IN THE NATURAL RESOURCE SECTORS

2 TOPICS  Chile  How Fundación Chile works  Selection of opportunities  Fundación Chile’s financing  Focus in key clusters (ei: Aquaculture)  Development of human resources  Impact evaluation of F.Ch.’ programs  Replicability of FCh.

3 CHILE: FREE TRADE AGREEMENTS (2006) Canada USA Argentina Brazil Mexico Uruguay Paraguay China European Union (25 countries) South Korea New Zealand EFTA: Suiza Noruega Islandia Liechtenstein India Japan Panama Brunei VietNam Singapur Bolivia Colombia Ecuador Perú El Salvador Costa Rica Honduras Nicaragua Cuba 54 countries : 86% of world trade

4 CHILE’S EXPORT DEVELOPMENT (in million US$ dollars of 2006) Innovation capacity has be key in the development of natural resources sector.

5 CHILE: SOCIAL ADVANCES

6 FUNDACIÓN CHILE Fundación Chile is a privately owned, non- profit institution, created in 1976 through an agreement between the Government of Chile and ITT Corporation. To add economic value to Chile’s products and services by promoting innovation and technology transfer activities, aimed at taking better advantage of Chile’s natural resources and human capital Mission

7 External Sources of Technology* Strateg. Alliances with Comp./ Partners Companies in Expansion Sales Tech. Licensing Wide dissemination Internal Sources of Technology Company scale-ups /Spin-offs Technology services and certification Management of Innovation * Universities, Research Centers, Sector Experts. Etc. Technology Center Business Units Final Clients Fundación Chile FUNDACION CHILE’S WORK PLAN

8 FUNDACION CHILE KEY AREAS AND PRODUCTS Agribusiness Aquaculture Forestry Education Labor Competences Biotechnology Environmental Technology Information Technology Human Capital Development Financial Engineering Management Technology Products  Technology broadly disseminate to multiple clients (as a technological antenna) through seminars, specialized magazines, internet portals, and technical assistance.  Technology sold to private & public clients in Chile and abroad.  Companies created to apply new technologies transferred or developed by FCH.  Standards and certification systems. TechnologiesSectors

9 FUNDACION CHILE’S FINANCING  Financing has a strong influence in performance.  An initial endowment of US$ 50 million (later additional US$25 million)  Actual self-financing: 88%  Project support from public and private sources  Sale of services and technologies  Additional contributions:  an annual contract to develop new capacities (10%)  profits from the sale of companies  Benefits of self-financing

10 SEARCHING FOR OPPORTUNITIES TO INNOVATE  Learning from other countries  Studying relevant markets  Analyzing value chains  Protecting infant ideas

11 THE DIFFUSION OF TECHNOLOGY  Replicability: achieving the social benefit of innovation  In addition to using traditional diffusion methods:  Organizing fairs and seminars  Publishing technical magazines  Providing consulting services  FCH developed an innovative diffusion instrument: creating companies that apply the new technology (70 companies since 1982)  Main benefits: risk reduction; investment recovery; prestige in the private sector  Example: starting the salmon industry in 1982, now second largest exporter: US$ 2.2 billion/year

12 DIVERSIFICATION OF AQUACULTURE

13 EDUCATION FCH’s contribution through better school management and use of ICT’s  School Management:  Has high impact on learning and allows fast improvements  A management model developed by FCH is used by more than thousand schools  Average learning improved 13% in three years.

14 EDUCATION  The use of ICT’s: A public educational portal Serving the educational community  60% of teachers registered as users in five years  More than 4 million visits per month International network of portals Seventeen Latin American countries agreed to a free interchange of contents (RELPE)  A US$ 2 million grant from IADB to develop the network

15 LABOR COMPETENCES Introduction in Chile of Labor Compentences approach for development and managemet of human capital (Supported by the Chilean government, IADB and WB) Achievements in seven years:  Definition of 200 standards for 10 sectors of the economy (mainly natural resources)  workers certified  Design of educational and training programs based on competences  A National System of Labor Competences Certification presented before Parliament

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17 IMPACT EVALUATION OF 7 PROGRAMS Fundación received only US$ 30 million. US$ 1300 million. US$ 430 million.

18 COULD FCH’S EXPERIENCE BE ADAPTED TO ANOTHER CONTEXT? Some success factors:  A non-profit public-private institution  Focused on:  Technological innovation by transfer of proven technologies  Development of human resources  Role of honest broker connecting technologies with applications.  Market oriented  Working always with partners (national/international)  With high level of self-financing  Protected from political pressures