The governance system of Latin American innovation agencies

Innovation agencies are gradually gaining prominence in Latin America and the Caribbean. The issue of the capabilities of these innovation agencies in the region is of great importance and has been notoriously under-researched. IGL was commissioned by the Inter-American Development Bank (IDB) to characterise the innovation agencies that form the Latin American Network of Innovation Agencies (RELAI) by analysing and comparing its members' institutional and operational aspects through some key elements.

The study of innovation agencies aims to describe and analyse the current characteristics of the RELAI agencies and the context in which they operate, to understand the dynamics of these organisations and the opportunities and challenges they face to enable more effective peer learning and collaboration. The analysis helps to identify some of the current knowledge gaps and highlight competencies, services and skills that innovation agencies need to develop to operate successfully and support their clients effectively. 

We've observed some common challenges in most Latin American agencies: several have been formed in the last ten years and have a relatively similar institutional structure, with a certain degree of autonomy, where the agency is somewhat separate although still under ministerial control. However, the RELAI innovation agencies present significant differences: their historical development has not been homogeneous, and therefore it is easy to find a wide diversity of factors and challenges that influence their functioning.

Our research observed different factors that significantly influence how these agencies operate. Some are directly related to its way of working and internal determinants, while others are broader and have more to do with the agency's system in which the agency is immersed. Six factors stood out: 

1. The extent to which there is a harmonised ecosystem and standard definitions of innovation 

2. The existence of institutional safeguards to protect the agency 

3. The level of development and culture of learning to improve cultures and policies 

4. The degree of autonomy and influence to develop their plans 

5. The skills and talents that the agency has access to 

6. The networks and reach allow the agency's work to be expanded.

We've observed that funding processes are critical for any agency. They influence operations, activities and services, and sometimes autonomy, reporting and accountability requirements. All RELAI agencies have one-year budget cycles, which can limit their ability to develop long-term plans and programs. It is vital as political cycles do not necessarily coincide with the variables used in innovation policy.

Innovation agencies also need constant updating; they need to learn about new trends, methodologies and technologies, which implies knowledge that is often different from the rest of public servants. But we've seen that it can be challenging for an agency to acquire and retain that talent. 

The agencies' positions concerning each factor provide an idea of their current operations and main challenges. Some agencies operate in transformational mode, where they can fulfil their mission effectively and actively focus on strengthening their capacities. However, another group operates in an established mode, which generally has the capabilities required to succeed but does not always have the space to develop new areas of innovation. Finally, the third type of agency operates in a more unstable mode and lacks those essential elements of control over their strategic direction and impact. For this reason, each of these groups has different challenges, which we seek to explain in the report.

The RELAI network has the opportunity to create a space for relationships of trust to be built among its members. This research brings to light that there are several issues where RELAI agencies value further training and support. For example, many expressed a desire to improve their ability to conduct rigorous impact evaluations of their projects, so there are opportunities to expand RELAI's role on these specific issues.

The final report from this research helps to put Latin American innovation agencies on the map, both externally and internally, since there are times when governments themselves are not so familiar with the work that an innovation agency has to do. In addition, it provides meaningful recommendations for the future roles and direction of agencies. They should balance a clear mandate and organisational agility to ensure preparedness and resilience amid uncertainty.

In essence, the report is beneficial for the agencies themselves. Still, ideally, relevant ministries should also spend time and understand the priorities of the innovation agency in their country and what they can do to improve their functioning.