National Innovation System in Columbia Sample

INTRODUCTION on National Innovation System in Columbia

In this paper the Main features of Columbia’s business environment and the role of national innovative system is discussed. Then the government component of the NIS in Columbia is evaluated. After that the finance components of National innovative system of the country is analyzed and discussed. The role of Scientific and Technological institution, as well as the Education components of the NIS is discussed. The industry component of the NIS in the Columbia is explained. In the end conclusion is given about the importance of the national innovative system for the prosperity of the country.

Business environment of Columbia and national innovative system

Business Environment of Columbia

The Columbia business environment has improved tremendously from the past few years due to the new programs run by the government. In the present condition the inflation rate is under control and there is economic stability which is attracting the investors to invest. Columbia has an advantage of being located in the middle of South and North America. The country has a population full of young and qualified people. Thus it has become a new investment place for the international investors. Before the investors had concern about the devaluation of the Columbia currency, but now it has been strengthening its currency value against dollar and Euro, which is clear sign of stability and growth of the economy .

The government of Columbia has simplified the tax rules and regulations which have led to increases in the tax base and reducing the tax benefits. The Judicial system of Columbia is very weak and hence the government needs to pay attention on that aspect. The main trading partner of Columbia is the United States to which it has done free trade agreement . If all the reforms and efforts taken by the Columbia become successful then for sure Columbia can become one of the major players of Latin America (Cardenas, n.d). Although it is not that Columbia does not face threats, it faces major challenges with the natural calamities like flood which has damaged the infrastructure, roads, buildings etc of the country.

National Innovation System

The NIS stands for national innovation system, which is a system that supports innovation from the institutions, people, enterprises etc at the national level. It is a system which makes the institution change, modify the rules or technologies in order to bring prosperity . This system believes in identifying the pot holes and then improving it through innovations and new technologies. The innovative performance depends upon the people who can bring changes in it. It reflects on the attention that should be given for the enhancement of the economy.The four major aspects of the national innovation system are as follows:

  • Movement of personnel
  • Interactions among enterprises
  • Diffusion of knowledge and technology to organizations
  • Interactions and communication among ventures, public research laboratories and universities.
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Columbia government role in national innovation system

The Columbia government has done lot of reforms in policies and decision in order to survive and enhance the economy.

The following are the few reforms the government of Columbia has done:

  • The government now focuses more on the equitable growth and the macroeconomic stability.
  • For the recourse to precautionary IMF funding the outer vulnerabilities were reduced.
  • The Columbian government has recently brought a new innovative fiscal rule to security against unstable use of the predictable higher supply revenues and to support and balance the fiscal responsibility law .
  • It has simplified the tax compliance, by doing major reforms in the tax rules as it realized that most of the tax revenue was left uncollected. It introduced the electronic payment system in order to reduce the tax evasion.
  • In 2009, it introduced online payment for social contribution, which reduced the complication o f tax payment and the corporate could pay tax in a single online payment. It even reduced the corporate income tax rates.
  • It made legal reforms for improving the investor protection. In the year 2005, Columbia government enacted the law 964 for the better disclosure and transparency of the corporate practices. This would help in fair disclosure of the corporate hence protecting the investor .
  • In the year 2007 the government amended and enhanced the securities regulation of the country and in the year 2010, it further reformed its rules by amending the company law, in order to increase the protection of the investors and build trust, confidence of the investors and encourage investment. Hence all this reforms has helped Columbia to enhance in both the extent of disclosure index and director liability index.
  • The Columbian government also did reforms in the insolvency procedures by giving chance to both the debtors and creditors to resolve their disputes before the Superintendence of companies, which helped in reducing the burden on the judicial system .   
  • Hence these are some of the reforms done by the Columbian government which proves that the government is doing a great job to foster innovation in the nation

The financial status of Columbia is improving but there are still some problems which the country has to face and they are as follows:

  • The reforms done by the Columbian government has improved the stability of the economy but the income per capita of the country is still below the OECD level.
  • Due to the huge number of the differential value added tax rates it contributes low to the efficiency of the system.
  • Rising population of Columbia has increased the pressure on the government for the improvement in the quality of the environment.
  • The education system in Columbia is not playing an important role in the national innovative system; the government needs to pay attention on that.
  • The tax system of Columbia has improved tremendously but still it does not contribute much to the growth and has done very little improvement in income distribution (Fagerberg and Srholec, 2007).
  • The financial condition of the Columbia can be known through the various graphs. From the below graph it can be seen that how the Columbia has improved in the field of exports, FDI (foreign direct investment) and tourism.
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Industry components of the NIS in Columbia

The industry plays an important aspect in the national innovative system, as due to the reforms and changes in policies and procedures the industries of Columbia gets affected and has a major impact on it. Through the innovation and new technologies the industries can be benefited and boosted.  Due to the changes made by the government of the Columbia.

It has affected the industries in many ways that is the employment opportunities have increased, the corporate tax is simplified which has become a relief for the organizations. The export has increases tremendously due to the national innovative system in Columbia.

The export industries have benefited a lot due to the increases innovative system as a resulted the Columbia has tripled its export from  2003 to 2009 by US$ 13,129 million in  to US$ 32,852 million. The industry which has the potential of growth and innovation is the oil and gas industry. Through the national innovative system it has managed to reduce the cost and find innovative solutions. It has developed its new subsidiary Calgary which can help in developing good relations with the clients.

The national innovative system has helped the country in getting the 3rd position in Latin America for the most business friendly country by the World Bank. It has also been recognized by the World Bank has the best country in Latin America and in 5th position in the world for the protection of the investors. The industries of the nation are getting benefited from the innovations and it also plays an important role in the linkage of the national innovative system. Due to the progress of the industries and its role in the linkage of the national innovative system the Columbia has able to manage the stability of the economy and enhance the GDP growth.

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National innovative system is a system which supports and encourages reforms, innovations and new technology at national level. National innovative system is gaining popularity among different countries in order to introduce new technologies and enhance their economy. Columbia is one of the countries which have done reforms in its policies and procedures significantly in the past few years which have resulted in the increases stability of the Columbia’s economy.

It is a leading example of the national innovative system . Through the innovations in polices and tax procedures, it has managed to control inflation and as not been much affected by the recession. It is in 5th position in the Latin America in terms of the Nominal GDP, but it continues to do reform and enhancement it can come in 1st position in Latin America. Due to the National innovative system in Columbia the Exports in the past years have tripled. The international visitors and the foreign direct investment in Columbia have also tripled in the past 6 years. Education and training institutions and the industry sector play an important role as a linkage in the national innovative system. Hence it is clear that National innovative system should be implemented by all nations in order to improve their economy.


  • General Accounting Office, 2004. District of Columbia status of reforms to the district’s mental health system.
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  • Nelson, R. and  Phelps, E. S., 1966. Investment in humans, technological diffusion, and economic growth. American economic review, 56, pp.69-75.
  • Nelson, R., 1993. National innovation systems: a comparative analysis. 1st ed. New York: Oxford university press.  
  • Pavitt, K., 1984. Sectoral patterns of technology change:  Towards taxonomy and a theory. A research policy, 13(6), pp. 343-373.
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