Informal linkages and university contract research have grown substantially in recent years in Latin America. In part, this reflects efforts by universities to adjust to falling per student public subsidies and meet a rising demand for tertiary education. In Peru, for example, self-generated revenue in public universities rose from 16 to 38 percent of their budget between 1995 and 2003 while maintaining a policy of no tuition in undergraduate education. A significant proportion of this income was generated through contract research and consultants’ services (ANR 2005). A similar pattern is found in Argentina, Brazil and Mexico.

Strengthening cross-sectoral research collaboration in Latin America is a matter of building trust, improving communication and strengthening incentives. One of the key obstacles is lack of private sector confidence in the quality and the relevance of academic research. Stimulating excellence when funding research and, notably, changing incentives at the level of the individual researcher would go a long way in addressing this challenge. With few exceptions, universities and research agencies in Latin America have unrealized potential for changing personnel policies and practices to encourage faculty members to collaborate with external partners and pursue their entrepreneurial interests. Researchers associated with the National Council of Scientific and Technological Research (CONICET) in Argentina, for example, are evaluated by peers based entirely on traditional academic criteria such as publications and citations. Hence, a researcher working with industry risks not being formally recognized for this effort (Thorn 2005b).

# _4.1.2 Mobility of advanced human capital_

An effective way to boost the transfer of tacit knowledge and build company R&D capacity is to facilitate mobility and the exchange of researchers and company staff. Data from the 2005 Colombia innovation survey, for example, suggest that the presence that at least one PhD employee has a significant positive impact on company success in obtaining a patent (Mark et al. 2006). Nonetheless, the overwhelming majority of researchers in Latin America work in public universities and government research laboratories, spending their entire career in academia. Hence, stimulating the mobility of advanced human capital between sectors could lower barriers for cross-sectoral collaboration, increase the relevance of academic research, and boost the capacity of the private sector to absorb knowledge.

There are many reasons underlying low mobility of researchers in Latin America. Business careers are often not sufficiently attractive for young researchers, and industry does not perceive graduates as adding enough value. In addition, deep-rooted views that a career in industry is an abandonment of academic values still exist among academics in the region (Mullin et al. 2000). Hence, programs targeted at enhancing mobility, may be an effective mechanism for building mutual trust for further collaboration.

The most common approach is to encourage researchers to seek employment and work part-time in industry. For example, professors can be granted the right to remain on the faculty or have reduced teaching loads while working in industry. Another approach – currently used in Chile and Argentina – is to co-finance scholarships to young researchers working in industry. These scholarships are temporary and decline in value of time, with the company financing an increasing share of the researcher’s salary. A 2001 evaluation of a researcher insertion program in Canada – surveying 360 young researchers and 100 participating companies – found that 77 percent of scholarship holders were still employed in industry after the public support had ended (NSERC 2003), indicating that the program had long-lasting results.

Reverse mobility of advanced human capital – from industry to universities — could also bring benefits to both companies and universities in Latin America. Options include encouraging 14