On March 27, SAIS MIPP student Exequiel Medina sat down with Claudia Stevenson to discuss Latin American development.
“I have always thought that one of the main challenges in our region is inequality,” said Claudia Stevenson, a Civil Engineer and Economist with more than 25 years of experience at the Inter-American Development Bank (IDB), who explored, from different angles, the challenges and progress in Latin America and the Caribbean. Stevenson served as Chief of the IDB’s Competitiveness, Technology, and Innovation Division, and as a specialist in the areas where she worked, which placed her in an exceptional position to witness the progress, challenges, threats, and opportunities facing the region.
The Observer spoke with her about her experiences in the region.
How did you begin your path in the field of development in Latin America?
My initial training was in civil engineering; later I studied regional and urban planning, and then completed a master’s degree in economics. Before joining the IDB, I worked in the public sector on planning, transportation, and infrastructure issues. That path gradually took me from a technical perspective to a broader view of development.
At the IDB, I began working in transportation and, over time, moved into regional integration, financing, competitiveness, and innovation. Having worked across several sectors allowed me to understand development from different angles and to always maintain a mindset of continuous learning.
From your experience, what are the main structural challenges facing Latin America in terms of economic and social development?
One of the main challenges in the region is inequality, not only in terms of income but also in access to opportunities, resources, and education. There is also a marked geographic inequality: the gaps between cities and peripheral territories remain deep.
I would also highlight insecurity and corruption, which affect investment, constrain business development, and reduce opportunities, especially for young people in more vulnerable areas.
How has the development agenda in Latin America evolved over the course of your career?
Infrastructure has changed tremendously and so has society. When I started at the IDB, the technical capacity of counterparts was not what it is today; people today are much better prepared. There has also been much greater access to scholarships, advanced training, and technology, and that has expanded access to knowledge and opportunities that did not exist before.
Let us think for a moment about geographic isolation and language isolation. For a long time, not speaking English placed many counterparts at a disadvantage in terms of access to knowledge. But that has also changed. Today there are many more people who have studied abroad than when I began.
What role does the CTI agenda at the IDB play in promoting sustainable and inclusive development?
For every private sector activity, there are market failures, and the role of the state, with the support of institutions such as the Bank, is to help resolve them.
One dimension has to do with legal and regulatory frameworks. In order to compete, nations need clear rules for exporting, investing, and doing business. It is also necessary that bureaucratic costs do not hinder private sector activity. Today, in addition, we face the challenge that technology is advancing faster than regulation.
Another dimension is quality and standards. Certifications, metrology, and quality standards are necessary for exports. If you do not know exactly what you are producing or cannot certify it, you cannot export goods or integrate them into value chains.
And at the firm level, a central issue is collaboration. This is where emblematic programs such as clusters and value chains come in. Because of economies of scale, companies and small producers are often unable to meet volume, quality, or price requirements on their own. They need to be associated with others. And sometimes that association requires public goods that the group cannot finance on its own, such as a collection center or a brand.
What conditions are needed to consolidate effective innovation ecosystems?
There must be interaction among business, academia, and the public sector. It is a helix logic. In addition, there are different types of innovation: innovation through adaptation, which takes something that already works elsewhere and applies it; and more disruptive innovation.
But one also must ask: innovation for what? That is where mission-oriented innovation comes in. If a country has a specific problem—for example, water—then it can organize its innovation effort around solving that specific problem.
Technology transfer is also important. In academia there is a great deal of research and many innovations that do not move forward, because those who develop them do not know whether they have commercial validation or how to take the next step. That is why we need incubators, accelerators, and mechanisms to help move those ideas toward concrete applications and, when appropriate, into firms.
Could you share a successful example?
I worked a great deal in the English-speaking Caribbean. In Jamaica, we implemented a series of policy reform programs between 2008 and 2014. That process began from a private sector diagnostic that was well received by the Planning Institute of Jamaica. That made it possible to begin with a clear reform agenda to improve competitiveness.
Over the long term, there were several results: it became much easier to do business in Jamaica, the time required to start a business fell sharply, regulations were introduced to allow mobile banking and expand financial inclusion, and reforms were also implemented to facilitate access to credit without requiring real estate collateral.
Then came the BIGEE program, focused on the innovation ecosystem, with the Development Bank of Jamaica as a catalytic actor. It included support for incubators, accelerators, technology transfer offices, firms, and innovators. It is a program that Jamaicans themselves consider successful and that is already in a second phase.
What message would you like to leave to current and future leaders of Latin America and the Caribbean?
If I were speaking with leaders in the region, I would insist on the importance of innovation and technological innovation. Latin America cannot be left behind. The region invests less than others in these areas, and it should give them much higher priority.
This is not to say that other things do not matter. Drinking water, roads, health, education: these all remain fundamental. But innovation and technology should be at the same level of priority, because they generate broader effects, including advanced human capital, productivity, and well-being.
And for colleagues, I would say that this is one of the richest and most diverse fields. We have to keep studying and always stay up to date, which makes it challenging. But it is also rewarding because we work with people who are thinking, innovating, generating employment, and promoting structural change.
I also learned about the importance of seeking out other people’s knowledge. As a team leader, I have never been the ultimate expert in everything. There is always someone who knows more, and I had to know how to rely on that knowledge.
Is there any issue we have not mentioned that you think is important to highlight?
One point I would like to highlight is the value of collaboration. In the division where we worked, the work has had a great deal of success and impact because everyone collaborates and does not compete. There is camaraderie, support, and recognition of each person’s work. Trust and respect have been fundamental in my work.