Services and Innovation for the Competitiveness of the Ecuadorian Economy
Ecuador is one of the least diversified countries in Latin America and the Caribbean, depending heavily on oil and agriculture. This policy paper examines how services and innovation can play a role in transforming the Ecuadorian economy from one b...
| Main Authors: | , , , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/07/26597565/services-innovation-competitiveness-ecuadorian-economy http://hdl.handle.net/10986/24848 |
| Summary: | Ecuador is one of the least diversified
countries in Latin America and the Caribbean, depending
heavily on oil and agriculture. This policy paper examines
how services and innovation can play a role in transforming
the Ecuadorian economy from one based on natural resources
to one based on knowledge and services. The paper assesses
the performance of the services sector and its contribution
to other sectors. The paper shows that services make a
significant contribution to the country's economic
growth (albeit below the average for the region). However,
the services sector in Ecuador performs poorly in
productivity and trade competitiveness. Further, services do
not add enough value for export providers and users over
time. The deficit in the integration of business services,
especially knowledge-intensive business services, is
particularly high, affecting the competiveness of all
sectors and their value chains. Among the drivers of
productivity and competitiveness, innovation is the key
quality and differentiation factor (as distinguished from
price-related, regulatory, and competition factors).
Innovation in Ecuadorian services firms does not
significantly affect performance (for example, sales and
exports), although innovation in manufacturing does improve
the performance of manufacturing firms. Finally, the paper
provides some conclusions and meaningful crosscutting policy
recommendations for a services-related policy aimed at
fostering competitiveness and innovation. Services need
action in innovation policy (innovation programs could be
better adapted to services innovation specificities), but
also in areas such as coordination at the institutional
level; internationalization and foreign direct investment;
and quality, regulatory, and competition issues affecting
the investment climate. |
|---|