Costa Rica

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Costa Rica is known for its substantial export-led growth. In 2011 it was the second largest economy in Central America with GDP per capita of USD 12 157. The aim of the 2011-14 STI Strategic Plan (PNCTI) is to achieve further growth.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Improving overall human resources, skills and capacity building

Costa Rica has few top universities (Panel 1b). At 20.9%, the tertiary-qualified adult population is at the bottom of the mid-range of OECD countries (Panel 1t), and the performance of 15-year-olds in science is poor. The government therefore seeks to improve the country’s human resource by investing in education, boosting secondary school coverage, promoting entrepreneurship, developing skills that meet firms’ requirements, bringing ICTs to the education system, and matching the education programme with the needs of the private sector. It relies in part on aWorld Bank Higher Education Improvement Project Loan (see below). Following the recommendations of a 2010 assessment of the country’s STI strategic priorities by the Inter-American Development Bank (IDB), the government has decided to allocate 50% of its S&T funds to development of human capital.

Improving the framework conditions for innovation (including competitiveness)

To improve conditions for innovation, Costa Rica focuses on obtaining FDI in certain high-technology sectors. The Free Zone Regime (FZR) offers tax exemptions and other incentives to foreign companies that meet eligibility criteria, including specified investment targets in qualified priority industries. The Commission for Export Linkages promotes supply-chain links between domestic SMEs and MNEs through a matchmaking programme. It also helps identify and build capabilities in selected local firms to help them become suppliers to MNEs.

Strengthening public R&D capacity and infrastructures

In July 2013, the government approved a USD 286 million (CRC 14.4 billion) initiative, financed by a World Bank Higher Education Improvement Project Loan, to develop research in public universities, particularly in priority sectors and technology areas. The government has allocated 30% of its S&T funds to research projects based on the priorities identified in the above-mentioned IDB assessment.

Improving the governance of innovation system and policy

In 2010 the government created the Presidential Council on Competitiveness and Innovation (CPCI). Its objective is to co-ordinate public policies among the institutions involved in Costa Rica’s innovation system. The Council linked the different players to the priority sectors to contribute to the definition of the main strategies of the PNCTI (2011-14). The Council later established an inter-institutional working group on human capital for competitiveness. In defining the PNCTI for 2011-14, the Ministry of Science, Technology and Telecommunications focused on the following priority areas: human capital, innovation, productivity and the digital strategy. In 2011, a set of annually updated indicators was created to evaluate the achievement of the National Development Plan (PND) and PNCTI goals.

Country Charts

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Selected Highlights

New sources of growth

The PND emphasises seven technology areas: renewable energy, nanotechnology, biotechnology, health, biodiversity, ICT, and Earth and space sciences. Tax concessions are also provided for FDI projects in high value-added electronics, manufacturing, materials and electrical components; medical devices, equipment and supplies; automotive devices and supplies; high-precision machinery parts and components; pharmaceuticals and biotechnology; and renewable energy.

Innovative entrepreneurship

Since the 2000s, Costa Rica has made a number of reforms to the country’s intellectual property system. The Inter-institutional Commission for the Protection and Promotion of Intellectual Property (CIPPI) co-ordinates the introduction and enforcement of IP-related legislation. In 2011 it developed, with the support of the World Intellectual Property Organization, a national IP strategy. On that basis, Costa Rica is amending the patent law and has reinforced prosecution of IP violations. In 2012, the government’s Funding Programme for SMEs (PROPYME) started to support SMEs for obtaining and protecting IPRs. In addition to the funding programmes (see below) other support programmes include EXPOPYME, an SME forum, CREAPYME, a business consulting service, and diffusion of lectures and success stories about SMEs on PYME TV and PYME Radio.

Innovation in firms

Costa Rica’s BERD as a share of GDP was 0.08% in 2011 (0.18% in 2012 according to national source), well below the OECD median (Panel 1d), but similar to that of Latin American countries such as Colombia (0.05%) and Argentina (0.16%). The 2010-14 PND recognised the private sector’s weak performance in innovation and the need to provide further support. Over the last ten years, the government has shifted the emphasis of its policy mix from supply- to demand-side instruments. MINCITT has created and reinforced a set of promotional funds and non-financial programmes. PROPYME supports SME innovation in high-technology industries such as aerospace, automotive and electronics. A seed capital fund, managed by the Ministry of Economy, Industry and Commerce (MEIC), supports technology-oriented start-ups in conducting R&D and in commencing operations. Other funds include the Fondo de Incentivos, FINADE and FORINVES, which also supports business innovation through venture capital financing.

ICT and Internet infrastructures

In July 2013, the Ministry of Public Education announced a plan to increase the use of ICTs in public schools with an investment of about USD 28.4 million (CRC 10 billion). The value of this plan is clear from the low levels of fixed and wireless broadband subscriptions in Costa Rica relative to the OECD median (Panel 1l, m).

Globalisation

Costa Rica’s research and innovation are well connected internationally. International co-authorships account for 74% of S&T publications, and international co-inventions for 46% of PCT patent application, both well above the OECD median (Panel 1q, r). However, this also reflects the small size of the country’s innovation system. Connecting domestic business to foreign MNEs to boost local industry is also an important policy approach.

Recent developments in STI expenditures

While Costa Rica’s GERD was only 0.48% of GDP in 2011 (0.57% in 2012 according to national source), well below the OECD median, it grew at a rapid 9.9% annually over 2007-11. Publicly funded GERD increased from USD 118.9 million (CRC 30.7 billion) in 2008 to USD 225.5 million (CRC 79.4 billion) in 2012. At 0.40% of GDP, public expenditure on R&D is weak compared to the OECD median (Panel 1a), but is similar to that of Latin American countries such as Argentina (0.57%) and Mexico (0.25%). The government plans to increase the share by the mid-2010s.