Against the Odds. Innovation in Latin American SMEs

The popular expression “Necessity is the mother of invention,” means that it may trigger new ways of doing things, in a more economical, faster or easier way. Most innovation theories in the academic and business literature come from advanced countries and examples usually derived from multinational companies. There is little evidence from emerging economies, such as Latin America. This chapter will focus on how innovation may arise even in highly restrictive environments, especially in small and medium-sized enterprises. For the OECD Oslo Manual 2005, there is the innovation of products, processes, business practices, workplace organization, and social improvements. The data of some international and regional indexes were consulted at the country, city, and personal level. They evaluate competitiveness, creativity, human development, and even happiness. Emerging economies that want to get out of the middle-income trap need to have an innovation-driven economy, despite the current constraints. The situation is of lights and shadows; nevertheless, a brighter future is ahead. Latin America is indeed innovating in its own way, sometimes not captured with the traditional indicators.