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Today I´ll like to continue talking about our wonderful land of opportunities. Before I do so, I´d like to give a slight correction on last week´s presentation of Paraguay Today emphasizing my academic background.

I´m a Lawyer specialized in the field of Investments that has had the blessing of being part of some of the most prestigious schools in the country: the UCA, UAA, IAEE and recently finishing my Financial oriented MBA at the UNA-UBA (currently working on my thesis) I´ve been working as a Financial Advisor at a leading brokerage house here in Asuncion were on a normal basis I manage national and international based portfolios. This I quote because it was involuntarily mentioned that I was an Economist, well I was trained in many areas of Micro and Macro Economy at the MBA but no, I majored in Law in my younger years.

Now, I´ve been surfing the web, reading about what different sites related to economy, corporate venture and investment which give their insight about our country… well, I got to say that I was a bit disappointed with the so many called ¨specialized sites¨ that in a broad way belittles our reality and potental.

Unfortunately the concept that Paraguay is given abroad is very unfair to its true nature and reality, and well… I´ll be exposing just what the country is made of in terms of investments, economics and corporate venture. Remembering Catalino Nuñez, one of my teachers at the MBA who once mentioned in the class the book called “The Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne, …have you heard about the book? Well the book uses the Blue Ocean metaphor emphasizing a “virgin market” which is created rather than fought over. As consequence there is ample opportunity for growth that is both profitable and rapid. Our country can be labeled as a Big Deep Blue Ocean that just hasn’t been discovered.

In future presentations I´ll be talking about our financial market breakdown, main GDP drivers in and out of AgroBusiness, Multinationals operating in Paraguay, Full-fledged private companies as well as Business Tycoons with a long business tradition in our soil. Today the 2 main articles will be referred to how Paraguay is measured worldwide in areas such as Competitiveness and Innovation. Days back the Global Competitive Index 2012 was published as well as WIPO´s* Innovation Index. More detailed information below.
*WIPO World Intellectual Property Organization

Innovation: Paraguay seized position 6 at WIPO´s Innovation Efficiency Index

Well, Conacyt (National Science and Technology Board) deserves a standing ovation considering that we are an emerging economy and that there isn’t precisely (yet) a culture of hard R&D/Venture Capital investing from our private and public sector (specially public). Consider our profile: our population almost reaching 7 Million, a GDP of over $ 24 Billon, a GDP per capita that doesn’t surpass $5,000 …so being #6 is to be seriously taken into account because this shows that we do what to reach higher ground.

WIPO´s Efficiency Ranking breakdown goes like follows: 1 China, 2 India, 3 Moldova, 4 Malta, 5 Switzerland, 6 Paraguay, 7 Serbia, 8 Estonia,9 Netherlands, 10 Sri Lanka. The National Science and Technology Board has publicly stated that due to their budgeterial limitations only one part of the more than 4.000 projects can receive financial support. We need to jump from the average 40K per project to a 200K minimum per project to boost these think-tank’s projects. Now, the National Science and Technology Board is not alone , our academic community is also investing in innovative R&D among students…the UNA(National University of Asuncion) sets a clear example on this. So, ladies and gentlemen, we do have the initiative, the manpower, the thirst of knowledge and conviction of competing in our globalized economy put are yet striving for that so much needed Venture Capitalists as well as Angel Investors…anyone interested? One more thing I want to state… let’s not just rely on Venture Capitalists or Angel Investors, we need to apply PPP (Public Private Partnerships) or foster a hard mindset revolution on how the government allocates funding in its year budget for real high worth innovative projects.

Innovation should be seen as an investment that if wisely applied will start giving proceeds that will easily surpass an x50 ratio in an average timeframe. Consider this for a moment; Maybe the funds are there, and maybe there just isn´t a person that is “connecting the dots” between Entrepreneur/Researcher and the Capitalist, well, maybe some more legwork should be put into the equation. I´m sure that we´ll have big surprises in the years to come… we in Paraguay have what it takes.

George Horita a former teacher of mine at the MBA stated and I quote: “Innovation is a must if you’re trying to get in our challenging (and constantly changing) world” …this my dear reader, can be considered today as a motto in business and a governmental policy. Paraguay and Global Economy

Paraguay climbs 4 positions on the GDI. Can we be tagged as a “Blue Ocean Business Case”?

Before we enter and analyze Paraguay´s position in the Global Competitiveness Index -GCI- , first I´d like to explain in a nutshell how the study is broken down because not everyone is aware on how it works. The study analyzes 12 different pillars that are clustered in 3 different types of Economies in accordance to the GCI; these are: 1 Factor Driven , 2 Efficiency Driven and 3 Innovation Driven. According to the GCI , we in Paraguay have an Efficiency Driven Economy.

Factor Driven: the competition is based on factor endowments-primarily unskilled labor and natural resources. Companies compete on the basis of price and sell basic products /commodities, low productivity on a normal basis reflects low wages.

The 4 Pillars of this Economic Stage are: 1-Institutions, 2-Infrastructure, 3-Macroeconomic environment and 4- Health and primary education. Countries like Nicaragua and Nigeria are part of this cluster. Efficiency Driven: when the country becomes more competitive, productivity increases and wages rise with advancing development. In this scenario, more efficient production processes must be put in place as well as product quality enhancement because as stared, wages are higher and the product price can’t be increased.

The Pillars of this Economic Stage are: 5-Higher education and training, 6-Goods market efficiency, 7-Labor market efficiency, 8-Financial market development, 9.-Technological readiness and 10- arket size. Countries like Paraguay, Morocco, Switzerland and Costa Rica are in this cluster.

Innovation-Driven: wages are high as well as living standards and the only sustainable strategy is to compete with new and unique products. Companies compete only by producing new and different goods applying the most sophisticated production processes as well as product innovation. The Pillars of this Economic Stage are: 11-Business sophistication and 12-Innovation. Countries like Germany, the USA and Japan are part of this cluster.

Now, how is the region coming along? Well, Chile (GDP $248 Billion) holds position 33, Brazil 48 (GDP $2.476 Billion), Mexico 53 (GDP $1.155 Billion), Peru 61 (GDP $176 Billion), Uruguay 74 (GDP $46 Billion), Argentina 94 (GDP $445 Billion) and Bolivia 104 (GDP $24 Billion). Our position in the index is currently the 116 (GDP $24 Billion) showing that all the potential hasn’t been yet developed and exploded.

Each pillar scores from a range of 1 to 7. Our general score is 3.67 and contrasting with the best positioned country in Latin America: Chile (which is the has a 4.65) our gap is 0.98. The number 1 ranked is Switzerland with a score of 5.72, meaning a 2.05 gap.

Since Paraguay is an Efficiency Driven Economy in accordance with the Global Competitiveness Index, it has the opportunity to build on the 6 pillars stated above not forgetting that the main foundation of any economy is its existing infrastructure (point which we have enormous opportunities)… as we can see, we are a clear example of what W. Chan Kim and Renee Mauborgne would state in their book “The Blue Ocean Strategy” … I quote again, even though Paraguay is a landlocked country it is a huge deep Blue Ocean. If these infrastructure opportunities were to be jotted down as real investment projects, our position in the GCI will certainly excel… so Investors and entrepreneurs worldwide… Carpe Diem because good things are bound to happen in this Blue Ocean called Paraguay.

Por Stanley Canova
Fuente 5 días