A bakery in Lima, founded in 2007, is redefining the perception of traditional industries by embracing innovation and growth. María Almenara, with its 22 stores across Peru and a client list that includes Starbucks, exemplifies how transformation can occur within established sectors. "Today, in a single day, we make the same as we did in our first year of operations," says Carlos Armando de la Flor, co-founder of María Almenara. He emphasizes that "a small business can be turned into something impactful."
This rapid growth is essential for Latin America and the Caribbean to move beyond decades of stagnant economic performance. The World Bank forecasts a modest regional growth rate of 2.6% for 2025, underscoring ongoing structural challenges that impede innovation.
William Maloney, Chief Economist for Latin America and the Caribbean at the World Bank, notes that "the returns on adopting technologies are extremely high," yet investment remains low. He describes this situation as an "innovation paradox." Investment in research and development is only 0.62% of GDP in the region—significantly below the global average—despite potentially high returns on such investments.
Maloney attributes this issue to historical factors: "The problem has much deeper historical roots." According to his team's simulations, most disparities between Latin American countries and advanced economies are due to slow technology adoption since the late 19th century.
Industries such as Chile's copper sector nearly collapsed without new technological processes from abroad. In contrast, Japan's embrace of innovation led to technological giants like Hitachi emerging from similar industrial contexts.
For businesses like María Almenara, competition demands constant adaptation. De la Flor states they must view themselves at "an intersection between mental health, entertainment, and convenience" to stay ahead of potential disruptors like delivery platforms.
In Argentina's automotive industry example with Ford's Falcon sedan production ceasing due to outdated technology highlights how competition drives innovation—a necessary force recognized by half of companies in competitive markets like the UK but only 10% in Chile.
World Bank experts stress preparing for innovative growth requires open engagement with global markets alongside strong financial systems allowing risk diversification: “All three elements are necessary," Maloney insists while advocating efficient public policies' support role too.
Entrepreneurial success stories illustrate broader lessons applicable across sectors; Marcela Meléndez from World Bank concludes increased efficiency via improved human capital plus better company support underpins Latin America's economic takeoff potential—not solely reliant upon specific industries or innovations themselves but rather systemic enhancements overall.