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By: Dr. Arnold Encomendero Dávalos

SILICON VALLEY’s Technological and Financial uniqueness is such that the two most prestigious Venture Capitalists, John Doerr and the mythical Arthur Rock, have stated that Silicon Valley is unquestionably “THE BEST MODEL ever for the creation of wealth.”

Since figures say more than words, according to reliable surveys: “In 1975, the entrepreneurs of Silicon Valley managed to attract millions of dollars to invest in 51 technology start-ups; 20 years later, such figure was as high as seven billion dollars to be invested per year in 1,300 start-ups.

To discover Silicon Valley is a wonderful GOLDEN DREAM come true for those who think technological Innovation is a source of research and work, worthy of significant investment considering the future. It is located to the south of San Francisco, U.S.A. The 4,000 km2 of the valley encompass the counties of San Jose; Alameda, and Santa Cruz. Presently, it is home to the biggest technology companies of the world and thousands of start-ups. This is an amazing qualitative change, considering that it was first home to a high number of innovators and chip manufacturers. It is now used as a metonymy for state-of-the-art technology in the USA; it is the leading center for innovation and for the development of advanced technology, appealing to one third of the venture capital of North America

The technological development of Silicon Valley is so huge that it has not only been replicated in the main cities of the U.S.A., such as SILICON AKEY (New York), SILICON BEACH (Miami), SILICON CITY (Chicago), SILICON DOMINION (Washington) but also in the most developed and enterprising countries in the world, i.e.: SILICON FEN (UK), SILICON GLEN (Scotland), SILICON WADI (Israel), SILICON PLATEAU (India) SILICON BOG (Ireland), BIT VALLEY (Japan).
richard branson
For the most accredited researchers of the Silicon Valley Model, there are four pillars that characterize this city: 1- a new technology and industrial culture; 2- a new culture for business development with high growth potential; 3- a new networking culture; and 4- a new regional development culture.

Among the most renowned companies whose headquarters are located in Silicon Valley and which are listed among Forbes 500, we can mention: Adobe System, Apple Inc., Cisco Systems, Ebay, Google, Hewlett-Packard, Intel, Nokia, Oracle Corporation, Yahoo, and Facebook. There are also universities, such as: San Jose, Santa Clara, Stanford, Berkeley, which are located on the opposite side of the bay but invest significantly in research and technology.

Within this approach highlighting advanced technology, what can we learn from Silicon Valley?

The answer to this question, Professor Thomas J. Kosnik, Stanford Technology Ventures Program (STVP), provides the following insight: We can learn about its: Diversity; continued Dialogue on these issues; appealing to talents from other regions; and engagement of big companies in innovative projects. Ensuring optimum infrastructure to promote Science and Technology. Making sure that the most experience people meet with young people and that they learn from failure. With these lessons, Dr. Kosnik highlighted that “it is possible to create an ideal environment to foster entrepreneurial initiatives-this, in the long term, can benefit economic development”.

The dream of Innovation of the Latin American governments contradicts the poor investment in Science and technology, compared to the countries which have turned such an investment into an engine of growth and inclusive economic development. According to the World Bank, Chile invests in R&D 0.39 of its GDP, Costa Rica 0.40, Peru 0.15; hence, lagging far behind other countries like Ireland with 4,27 of its GDP, South Korea with 3,60, Finland 3,84, Sweden 3,62, Denmark 3,02. Further, considering developed countries: the U.S.A. invests 2.90 of its GDP, Germany 2.82, Canada 1.74. The outcomes of such good investments are exceptional.

On the other hand, according to RICYT studies, Latin American countries account for approximately 2% of the world investment in Research and Development (R&D), only ranking ahead of Africa (0.3%); ranking just like Oceania, and ranking below North America (39%), Europe (31%), and Asia (26%). In addition to the significant investment of Brazil, Chile implemented in 2010 a program called START-UP CHILE, bringing together local and foreign entrepreneurs. Their companies are driving intra-entrepreneurship in which workers create projects for their own companies and some companies have even implemented R&D Departments for workers to be exclusively engaged in INNOVATION.

Within this practical scenario aimed at promoting and investing in Science and Technology, the Chilean Administration has called 2013 as the YEAR OF INNOVATION and has passed a one billion Dollar Budget to implement an AGENDA considering 100 public and private activities focusing on three main areas: Science and Human Capital; Entrepreneurship and Competitiveness; and Enhancing the Quality of Life.

To conclude, the Lessons learned from SILICON VALLEY are already being echoed in Latin America. We hope to see new START-UPs in every Latin American country. This is a huge NEED that comes at a cost; however, the BENEFITS are overwhelming. As I mentioned to the prestigious Professor and Researcher at CARNEGIE MELON SILICON VALLEY, STUART EVANS PhD, when I first met him at the NASA Ames Research: at COOPETROPERU, - I proudly told him – the Financial Institution I manage, Innovation is a rule of life. We already have two Management tools which have enabled us to achieve higher ratings in efficiency and productivity, and in liquidity and solvency. Such tools are: LIDERPLAN SYSTEM, an effective Model for comprehensive planning and the “PETROSIS” SOFTWARE, a Comprehensive Financial System. They can both be used successfully by Businesses, Local Governments, and other Organizations engaged in funding sustainable Development, correlating human solidarity and economic efficiency. For more information visit: www.arnoldencomendero.com. Finis Coronat Opus.