Growth demands more than promises: the paradox of cutting innovation in the 2027 Budget

Chile's most important economic challenge is raising its capacity to grow in a sustained manner beyond the swings of the cycle (trend growth), which the Central Bank currently estimates at just 1.8% per year for the coming decade. International experience is eloquent: countries that managed to sustain their growth and extend prosperity to their entire population did so by strengthening their productive capabilities, with innovation and technological adoption as pillars. That challenge is more urgent today. Artificial intelligence is transforming the way nearly every sector produces, and the energy transition demands new technologies in energy and mining—precisely where Chile has advantages to play a relevant role. Yet we invest only 0.41% of GDP in R&D, a fraction of the OECD average (2.7%), and with very low private participation. That is why it is paradoxical that a government that came to office promising to make Chile grow proposes, in its first Budget Law, to eliminate the Sustainable Productive Development program (DPS) at Corfo and the Ministry of Economy. This amounts to roughly 150 million dollars a year to finance and coordinate initiatives that seek to improve the competitiveness and sustainability of various productive sectors through the incorporation of technology and innovation: more than a hundred projects, several of which mobilize more than one private peso for every public peso. The DPS program has financed science oriented by productive challenges, science-based entrepreneurship, innovations developed by private actors in a wide range of sectors, and scientific-technological capabilities for the piloting, testing, and early development of new technologies. Some examples: the Cobalto Verde project, which seeks to recover cobalt—key for batteries in electronic devices and electric vehicles—from mining tailings through biotechnology; the Shipbuilding Strategy, a strategic and employment-intensive sector with broad civilian and military support; the Circular Economy Technology Center of Los Lagos, which will generate value from the region's industrial waste; the Advanced Manufacturing and Industry 4.0 Technology Center, which will drive the reindustrialization of Biobío; the NOVA-AI Technology Program, which seeks to transform the food industry through artificial intelligence; and the Public Procurement of Innovation pilot at Las Higueras Hospital, which incorporates artificial intelligence to reduce hospitalization waiting times, among other major projects. It is true that some of these initiatives will continue to be funded through specific channels. But what matters is not only what is saved today, but also what we will fail to fund tomorrow without this program. Moreover, its design solved a problem Chile has dragged for decades: the fragmentation of the public offering with a productive orientation. Under the aegis of a committee of ministers, DPS organized the efforts of different ministries, Corfo, and other public agencies around common challenges. There is an additional argument. DPS is financed with part of the revenues the State receives from lithium. Lithium is a resource that runs out: what is extracted today will not be available for future generations. The only responsible way to use that rent is to transform it into capabilities that endure, such as knowledge, technology, human capital, and new industries. Eliminating DPS is not saving; it is giving up on converting a transitory wealth into permanent development. Promising economic growth while cutting innovation and productive development policies is no minor contradiction. Economists Aghion, Howitt, and Mokyr received the most recent Nobel Prize in Economics for explaining how innovation sustains long-term growth and why societies that institutionalize the creation of knowledge prosper. It is difficult to reconcile that evidence with the decision to dismantle one of the few instruments Chile had built in that direction. We know the program is improvable, and that is precisely what the budget discussion that is just beginning is for. Tying it to verifiable goals and periodic independent evaluations are concrete ways to strengthen it. Eliminating it, on the contrary, points in only one direction: giving up on the economic growth that was promised. José Miguel BenaventeFormer Executive Vice President of CORFOJaviera PetersenFormer Undersecretary of EconomyAintzane LorcaFormer Head of the Sustainable Productive Development DivisionNEWSLETTEROpinionSaturday, AMTense ideas, opposing views, and clear analysis: elements to reveal the issues that divide opinions and will shape the agenda. By subscribing you are accepting the Terms and Conditions and Privacy Policies of La Tercera.