San José, Costa Rica, since 1956

Investment in Science and Technology Lags

Costa Rican ingenuity has designed advanced computer chips, software programs and more environmentally friendly building materials.

But funding for science and technology research and development (R&D) is falling, particularly in the private sector, and threatens any hope of Costa Rica becoming a developed country.

According to a recent report from the Science and Technology Ministry (Micit), investment in science and technology R&D decreased from $87.8 million in 2006 to $84.2 million in 2007.

That translates into just 0.39 percent of the gross domestic product (GDP) in 2006 and 0.32 percent of GDP in 2007, the Micit study said. No figures are available for 2008.

In his National Development Plan, President Oscar Arias pledged to increase the nation’s R&D funding to 1 percent of the gross domestic product (GDP) by the end of his term in May 2010.

“No country has become developed without investing in research and development, and we are talking about amounts that are much larger, of between 2 percent and 3 percent. The amount that Costa Rica is investing is much too little,” said Luisa Eugenia Castillo, the vice dean of research at the Universidad Nacional (UNA), one of Costa Rica’s principal public universities.

“If Costa Rica wants to be a developed country, with this level of investment, we are not even on our way,” she said.

In Latin American, Brazil spends the most proportionally on research and development, investing 0.9 percent of its GDP.

Chile and Cuba follow at 0.7 percent and 0.6 percent respectively, according to a 2007 report from the United Nations Educational, Scientific and Cultural Organization (UNESCO). Argentina and Mexico followed, investing close to 0.4 percent.

Countries typically classified as “developed” largely spend more than 2 percent of their GDP on research and development.

The United States invests 2.7 percent, according to UNESCO, while Korea spends 3.0 percent and Israel spends 4.9 percent.

In Costa Rica, spending on R&D actually increased in the country’s universities and government institutions, but fell dramatically in the private sector.

According to the Micit study, academic spending on science and technology R&D went from $28.6 million in 2006 to $38.1 million in 2007. In the public sector, it increased from $11.3 million to $13.4 million.

Businesses, however, lowered their investment in R&D from $43.6 million in 2006 to $27.7 million in 2007.

In their conclusions, the Micit researchers said, “such a large variation from one year to another seems to reflect project cycles, but we cannot be certain if 2006 is the high point or if rather 2007 is the low point.”

A quarter of the businesses that spoke with the Micit researchers said that they did not carry out R&D because of a lack of access to credit, and another 24 percent said it was because of a lack of support from the public sector.

Researchers noted that “very few businesses have relationships with international entities in order to promote processes of innovation,” and that a “relatively low” percentage of business – 32.9 percent – have relationships with universities or public research centers. The majority of those that did, however, the collaboration “has been successful in reaching their objectives,” the report found.

Castillo, of UNA, said the lack of private sector investment in R&D is nothing new. “There has always been a deficit in that field. Very little has been invested,” she said.

“The economic efforts have largely come from the universities, complemented with funds from the government.”

However, she acknowledged that some agriculture business organizations, such as the Coffee Institute of Costa Rica the National Banana Corporation and the Industrial Agriculture League for Sugar Cane (LAICA), have stood out for their investment in R&D.

Dagoberto Arias, the vice dean of research at the Costa Rica Institute of Technology (TEC), said that Costa Rican businesses need to realize that this sort of investment will end up benefiting their products and services in the long run.

“Many small and medium-sized businesses have not managed to quantify the earnings that they could make, or the increase in profits that come from an investment in science and technology.”

Within the Science and Technology Ministry, a special fund called the Fondo Prop yme makes grants and loans available to small and medium-sized businesses that do want to make the investment.

Arias also emphasized the importance of working with the country’s universities.

“Our doors are open to work on any problem that businesses want to present us,” he said. “But we need more private investment. We don’t need 100% of it to carry out a project, but we do need a counterpart.”

Arias said that, while universities have also seen some challenges – a change in retirement policy in recent years pushed many accomplished academics to retire at ages as young as 50 in order to not lose their benefits – government funding has at least been steady.

And, he added, the current economic crisis, rather than being a threat to R&D, could be an opportunity.

“In Costa Rica, we have set ourselves apart by greatly diversifying our exports.

This is very important for confronting this crisis,” he said. “We have yet to exploit all our potential to generate innovation in some products. Once we realize the benefits that we can gain through developing innovations in these products, we are going to have a very quick path to achieving greater development.”


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