By Adrian Gonzalez.
Can Latin America be a leader in cutting-edge technologies? The answer is clear: hardly. In fact, the region accounts for less than 2% of the world’s patent applications; of these, less than a fifth are filed by Latin Americans. Latin America imports about eight times more intellectual property than it exports, the second-highest proportion in the world. As cutting-edge technologies like artificial intelligence (AI) multiply, there is a risk that the region could, once again, fall behind.
This situation is evident in the region’s balance of payments, where payments for the use of intellectual property (such as patents, trademarks, copyrights, and licenses) are often greater than revenues from such exports.
Reasons for the Trade Deficit in Industrial Property:
- Lower investment in Research and Development (R&D): Compared to developed countries, investment in R&D in Latin America tends to be lower. This translates into fewer new technologies, inventions, and creations that can be protected by industrial property and subsequently exported.
- Technological dependence: Many countries in the region depend on technology and knowledge developed elsewhere in the world, which requires paying licenses and royalties for their use.
- Productive structure: The productive structure of many Latin American countries focuses on the export of raw materials and products with lower added value, which require less intensive use of their own industrial property.
- Lower patent filings by residents: Statistics show that a significant proportion of patents filed in Latin America are filed by non-residents, indicating less protected local inventive activity.
- Challenges in the commercialization and export of intellectual property: Even when intellectual property is generated in the region, there are challenges in its commercialization and export to international markets.
Implications of the Trade Balance Deficit:
- Foreign currency outflow: License and royalty payments represent a foreign currency outflow for countries in the region.
- Reduced competitiveness: Dependence on foreign technology limits local companies’ ability to innovate and compete globally.
- Lower endogenous technological development: A deficit indicates a lower capacity of the region to generate its own technological development and to rely less on external sources.
Situation and Trends:
- Regional variability: The situation varies significantly across Latin American countries. Some countries, such as Brazil and Mexico, have greater activity in the generation and registration of industrial property.
- Growing awareness: There is growing awareness in the region about the importance of intellectual property for economic development and competitiveness.
- Increase in patent applications: While levels are still low compared to other regions, there is an upward trend in the number of patent applications filed in certain Latin American countries.
- Importance of trademarks: In the area of trademarks, the outlook is generally more encouraging, with a greater number of registration applications from residents. Trademarks play an important role in the identification and marketing of products and services, both nationally and internationally.
Argentine situation in this context:
While Argentina has a positive trade balance in the Knowledge-Based Services sector, indicating a capacity to export valuable intellectual property, indicators for patent and industrial design applications show significantly higher imports than exports in these areas. The situation with trademarks appears more balanced in terms of application activity.
According to the few available indicators, Argentina’s situation points to a general trend of greater imports than exports of industrial property, similar to that of other countries in the region, although with a growing knowledge-based economy sector that partially offsets this situation.
Conclusion:
Imports of industrial property are currently tending, as they have historically, to outpace exports in Latin America, reflecting lower investment in R&D, greater technological dependence, and a production structure that is less intensive in its own intellectual property. Thus, Latin America’s future will depend on its ability to continue integrating existing technologies and finding areas of opportunity to successfully advance its strategic growth.
