Entrepreneurship and innovation in Chilean firms: an exploratory study

The Chilean economy has been recognised as the most competitive of Latin America. In the last two decades, the firms in this small country have been able to cope with a significant increase in foreign competition resulting from reduced tariff barriers and the arrival of world-class firms. These challenges have been confronted by a set of attitudinal changes, the creation of new firms that are started taking as a premise the increased foreign competition, and the creation of indigenous technology. This paper presents and analyses the current status of entrepreneurship and innovation in medium and large size firms in Chile, based on direct information about technological innovation and indirect information about entrepreneurship. Some of the topics covered include changes in the environmental conditions that have affected those firms, the effect of technology import vis-a-vis the capability to develop indigenous technology, product development with local technology, indigenous process improvement and development, and government incentives for the creation of new businesses. With respect to entrepreneurship, there is an important change in the origins of the firm founder and a shift from manufacturing to services firms. In innovation, most firms have focused on process improvements in order to increase production volume and reduce manufacturing costs.