TBY talks to Sandra Doig Diaz, Deputy Minister for MSEs and Industry and President of the Innovation for Competitiveness Project – FINCyT, on research funding and successful projects.

Sandra Doig Diaz
Sandra Doig Diaz studied law at the Pontificia Universidad Católica of Peru, and holds a Master’s degree in Public Policy from University College London in the UK, and a Master’s in International Cooperation and Project Management from the Instituto Universitario Ortega y Gasset in Spain. With over ten years of experience in public administration she has worked as executive director of the National Competitiveness Council and has provided consultancy services for the Inter-American Development Bank (IADB) and the United States Agency for International Development (USAID). Recently, she was in charge of the design of instruments for financing innovation and entrepreneurship for the Innovation, Science and Technology Fund (FINCyT).

What actions have been implemented to spread the culture of research and innovation among society?

The current government has put a special emphasis on the promotion of science, technology and innovation (STI), not only by increasing funding for existing funds, but also through the implementation of new funds for research and development, STI and innovation and innovative entrepreneurship. In all, the resources allocated to these funds add up to over $360 million, and several public entities are involved in their implementation and execution. Also, in a complementary effort, the government has also focused on strengthening human capital through scholarship programs for higher education and technical training.

What role does innovation and science play in the country's growth strategy?

In July 2014, the National Plan for Productive Diversification was approved. This plan aims to create new engines for sustainable economic growth, leading to productive diversification and sophistication and an increase in productivity. Innovation is a key element of the plan, which recognizes that without innovation it is not possible to diversify and grow. This is a lesson learned from the experience of more developed countries, where innovation explains much of their medium-term sustainable growth.

How have research and innovation funds evolved over time?

The Innovation for Competitiveness Project (FINCyT) was established in 2007 through a loan agreement between the government of Peru and the Inter-American Development Bank (IADB). Overall, $36 million was allocated to the fund, with $25 million coming from IADB and $11 million from the state. That was the first step we took in Peru to finance STI activities. In 2009, the government established the Fund of Research and Development for Competitiveness (FIDECOM) with almost $70 million to finance innovation projects for SMEs. In 2012, FINCyT was increased from $36 million to $100 million ($35 million from IADB and $65 million from the government), including funding lines for innovation and innovative entrepreneurship. In all, today there is funding available from the Peruvian government for up to $360 million for science, technology, and innovation funding lines, of which $151 million is assigned to innovation funds.

Could you talk us through some of the successful projects supported by the innovation program in recent years?

In terms of commercial success, an outstanding case is that of an agro industrial company in Piura which adopted several technologies from abroad and made their grape production much more efficient and able to yield at seasons in which the product is not available from regular providers. The company had commercial success as a result of this, and paid taxes worth up to 12 times the amount invested by the public fund. It was estimated that in the period 2013-17 this project will have contributed almost $50 million to the country's GDP. There was also a successful project related to seaweed in Arequipa where a new farming area was developed. The company extracts algae for commercial purposes, creating a product which is high in protein and exported to Chile. There is also a poultry project with a company called San Fernando and the Cayetano Heredia University in which they utilize waste to produce fertilizer and organic antibiotics.

What are your main goals for the future?

We are working toward identifying which sectors of the Peruvian economy have the greatest potential for growth or could be considered potential economic drivers, and which can lead our country to sustainable economic growth. This will allow the government to focus on and align innovation efforts from different actors, both private and public. In this way, these sectors should become the engines that will lead the Peruvian economy to growth in the medium-term. Results of our current innovation funds show that for every dollar invested in an innovation project, there is a return of $7 through the generation of employment or taxes. For the next five years FINCyT has a budget of $151 million, with $114 million for innovation and $24 million for entrepreneurship, and a further $13 million for complementary services, such as quality infrastructure and technology diffusion. The success of the program, and the contribution of innovation to achieving sustainable economic growth in the medium term, has to be ensured through appropriate funding, calls for projects, and dissemination nationwide.