An investigation of the innovation performance in the capital goods sector in Colombia: using the System Dynamics approach

Abstract

The innovation performance of a firm within the capital goods sector inColombia is addressed using the System Dynamics method. The problemthat motivated this study can be stated as the lack of a comprehensivetheory that explains both the poor innovation performance of the Colombianindustry and its scarce level of the technological capabilities. Although thereare a number of attempts to explain the problem, their causal structuresare not fully specified and the results of these have not been evaluated withregard to whether they altogether constitute a coherent and consistenttheory of the underlying causes explaining the observed dynamics.Robledo’s (1997) research on the innovation process of the Colombiancapital goods industry is examined in detail. Robledo’s research isformalized to investigate how well the theory accounts for the phenomenaits author set out to explain. We tested that the dynamics that Robledo(1997) describes can be produced by the causal factors he postulates. Inparticular, we demonstrate that given the intangible nature of capabilitiesand its effect on the innovation process, the actors making up the system ofinnovation maybe reluctant to invest in R&D. This fact highlights thatindustrialists, academics and policy-makers need to do both acknowledgethat innovation is a learning process and estimate the intangible benefits ofR&D. In particular, academics and policy-makers should encourage theindustrialists to consider R&D investments at the core of its businessstrategy.