gtipa.org Latin American Subnational Innovation Competitiveness Index VIKTOR LAZAR, IAN TUFTS, STEPHEN EZELL, CAROLINA AGURTO, ALVARO MONGE, GERMAN LOPEZ, ANA SANCHEZ, VLADIMIR MACIEL, PABLO EGUIGUREN | SEPTEMBER 2023 For policymakers to bolster the global competitiveness of their nations and regions, they first must know where they stand. This report benchmarks the 182 regions of Brazil, Chile, Colombia, Mexico, Peru, and the United States using 13 commonly available indicators of strength in the knowledge economy, in globalization, and in innovation capacity. KEY TAKEAWAYS  The United States claims all the top 47 regions, with Massachusetts, California, and Washington ranking the top three.  Three states in the United States (Mississippi, Alaska, and West Virginia) rank lower than the very-best-performing Latin American regions.  The five best-performing regions in Latin America are Mexico City, Mexico; Sao Paulo, Brazil; Lima, Peru; Bogotá, Colombia; and Arequipa, Peru.  While Latin American regions lag behind U.S. regions in their overall scores, there is less variation in regional scores in Latin America.  Peruvian regions, along with many regions in Colombia, Brazil, and Mexico, lag behind U.S. regions most visibly in broadband adoption. U.S. regions also particularly excelled at venture capital and patent applications compared to their Latin peers.  Policymakers must open their regional innovation markets to both a continental and global scale to create internationally competitive ecosystems and accelerate development.  Policymakers must boost local research and development (R&D), entrepreneurship, and patent applications for a resilient economy with cutting-edge development opportunities. ITIF | CCIT | MACKENZIE | MACROCONSULT | FUNDACIÓN IDEA | LYD | SEPTEMBER 2023 PAGE 2 CONTENTS Key Takeaways ................................................................................................................... 1 Introduction ....................................................................................................................... 3 The Index .......................................................................................................................... 4 Results .............................................................................................................................. 5 Ranking List ................................................................................................................... 5 Index Scores................................................................................................................. 11 Knowledge Economy ..................................................................................................... 13 Globalization ................................................................................................................ 21 Innovation Capacity ....................................................................................................... 25 Policy Recommendations .................................................................................................. 39 Brazil ........................................................................................................................... 39 Chile............................................................................................................................ 40 Colombia...................................................................................................................... 41 Mexico ......................................................................................................................... 43 Peru ............................................................................................................................ 45 United States ............................................................................................................... 47 Conclusion ...................................................................................................................... 49 Appendices...................................................................................................................... 50 Appendix A: Composite and Category Scores Methodology ................................................. 50 Appendix B: Indicator Methodologies and Weights ........................................................... 51 Appendix C: Estimation Methodologies ............................................................................ 52 Endnotes ......................................................................................................................... 54 ITIF | CCIT | MACKENZIE | MACROCONSULT | FUNDACIÓN IDEA | LYD | SEPTEMBER 2023 PAGE 3 INTRODUCTION Despite Latin America accounting for only 8 percent of the global population and 6.5 percent of global economic output, the region possesses several characteristics that will be influential in the coming