Abstract:
The service sector has become one of the most important economic activity in the
world economy in both developed and developing economies. Services are crucial
for further developing the Latin American and Caribbean countries, providing a
strong economic dynamism and creating the source for job creation and welfare.
Service innovation is incremental for ensuring strong and competitive growth of
services in the region. Agriculture and manufacturing industries also need service
innovation to become more competitive. Service innovation shows some
particuliarities, distinctive from innovation in goods, such as the relatively less
importance of R&D and patents. Service innovation policies are justified by a
wide range of reasons, including the existence of market and systemic failures. A
number of developed and developing countries have recently promoted service
innovation policies, following various strategies. Both horizontal and vertical
policies need to used, together with systemic policies to fully integrate services in
the existing innovation policies. The case studies coordinated by the Inter-
American Development Bank study on services and productivity in Latin
American and the Caribbean suggest the need for understanding the peculiarities
of different subsectors and countries to promote innovation, maximize its impact,
and face a wide range of obstacles hampering innovation in services. The first
policy priority would be to raise the awareness of the topic in the policy and
business agendas.
