The Organization for Economic Cooperation and Development (OECD) issued a stark warning to Chile this Thursday, characterizing the country's innovation landscape as severely limited. In its inaugural report, 'Foundations for Growth and Competitiveness,' the Paris-based body urged the government to overhaul its approach to research and development (R&D).
“The innovation remains limited, particularly among small and medium-sized enterprises,” the report stated. The OECD noted that business spending on R&D sits at just 0.3% of the nation’s GDP, a figure they describe as alarmingly low.
Data from the report highlights a significant gap between Chile and its international peers. Only 17% of Chilean companies reported introducing technological innovations, a rate less than half the OECD average.
Structural inefficiencies in public support
The organization also criticized the current framework for state-sponsored innovation. The report found that public programs are fragmented, often suffering from overlapping objectives and a lack of accountability across various government agencies. Furthermore, the OECD indicated there is little evidence that current state efforts are actually boosting corporate innovation.
Beyond R&D, the report identified digital infrastructure as a major hurdle. Despite Chile's membership in the OECD since 2010, the country continues to trail behind its peers in broadband penetration and the digitalization of small businesses.
“Gaps in digital skills limit the adoption and diffusion of technologies in companies,” the organization added. The report advised officials to accelerate the modernization of telecommunications licensing regimes to help close this divide.
The findings arrive as Chile grapples with broader economic headwinds. While the economy grew 2.5% last year and inflation stabilized at 3.5%—near the Central Bank’s target—long-term growth remains sluggish. Average GDP growth over the last four years has hovered at just 1.9%.
Chile, the world’s largest producer of copper, faces a difficult fiscal environment. The structural deficit reached 3.6% of GDP last year, marking the highest level seen in two decades. Policymakers must now balance these fiscal constraints against the urgent need for structural improvements in productivity and digital adoption.
