Nourishing innovation ecosystem in Ecuador: strategies for shifting from fast follower to first mover

Abstract

Since the arrival of oil in the 1970s, Ecuador aspired to an economic transformation based on industrialization and science. Despite a favorable context—high oil revenues, cheap labor, and the beginning of the Digital Revolution—the country failed to consolidate an innovative productive model like South Korea or China. Today, Ecuador still depends on oil and lacks a robust technological ecosystem.

With the Fourth Industrial Revolution (Industry 4.0), a new opportunity arises to develop strategic sectors through the strengthening of the innovation ecosystem. This process must focus on two key factors: knowledge and innovation.

Public institutions, such as the Ministry of Education and SENESCYT, are the main promoters of science, but investment remains insufficient. The university system prioritizes teaching over research. On the other hand, major Ecuadorian companies do not drive innovation, while promising startups have had to seek financial support abroad.

The country has few capital funding initiatives. The most notable are private incubators like Prendho or Conquito, and at the state level, the “Venture Capital Fund,” which offers limited funding to startups and SMEs.

There are favorable legal frameworks, such as the Knowledge Economy Code (2017) and the Organic Entrepreneurship Law (2020), aimed at promoting innovation and new financing methods, but their implementation is still limited.

Short-term strategies:

• Restructure university curricula to focus on applied research in agroindustry and renewable energy.
• Create a national incubator network with access to public capital.
• Encourage producers to adopt local technological innovation through tax incentives.

Long-term strategies:

• Support the creation of local tech companies (such as territorial search engines).
• Have the State take on the financial risks of early-stage tech ventures.
• Reform basic education to develop critical thinking, creativity, and digital skills.

International cases such as France and Finland provide successful models. France has led the agro-industrial transformation with an ecological focus, while Finland reformed its education system to foster innovation from an early age.

Ecuador must focus, in the short term, on sectors where it has natural advantages, and in the long term, on the development of its own technology. The State must lead this transformation through investment, training, and effective public policies.