- Latin America and the Caribbean have grown more innovative since 2018;
- Cash is being displaced faster than ever due to COVID-19.
The most innovative companies in Latin America and the Caribbean are based in Brazil: 43% of them, according to 2020: The rise of innovation in Latin America and the Caribbean. Lessons from Innovative Leaders Across the Region report by Visa and Americas Market Intelligence (AMI).
The report emphasizes that Latin America and the Caribbean have grown more innovative since 2018, with a 24% increase in the number of Advanced and Mature/Born Innovative companies (see the graph and the stages of innovation below).
Merchants, led by digital natives, showed the greatest improvement, and a drop-in businesses in the Developing and Intermediate phases signals a broad regional improvement.
At a high level, the most innovative companies develop twice as many proofs of concept, push new products to market 24% faster, form 60% more partnerships, and double the number of APIs. Besides that, 70% of their teams use agile methodologies and more than 80% use advanced data
analytics like machine learning.
Stages of innovation in Latin American and the Caribbean:
- Early – these companies may attempt to innovate simply to innovate, while lacking communication among teams, struggling to quickly launch ideas due to bureaucratic red tape, and failing to have a supporting structure that promotes a culture of experimentation.
- Developing – innovation is often siloed to a specific team and reactive to external shocks, a by-product of limited strategic partnerships, and a muddled focus on improving internal processes rather than creating new products.
- Intermediate – new products and services are fostered by the innovation team’s frequent interactions with other business units and a handful of partnerships, but they often lack both speed and strategic clarity, rarely making them disruptive.
- Advanced – a horizontal, highly integrated, and collaborative relationship between the innovation team, business units, and strategic partners, allows for a quick execution to market, creation of new business models, and the development of regionally innovative products.
- Mature/Born Innovative – innovation is an inherent part of the company’s culture that allows employees to constantly create added value to its customers while solving pain-points; through a fully integrated partnership model, a constant exchange of information via open APIs, and an agile working methodology that fosters experimentation and ideation, innovation is a means to an end and not an end itself.
Visa’s report also indicates that Latin America is passing through a strong digitization process. According to the report, smartphone penetration in the region is at its highest (70%), giving consumers a powerful tool to engage with brands. Furthermore, cash is being displaced faster than ever due to COVID-19 as consumers avoid it like the plague itself.