Can artificial intelligence (AI) foster economic catch-up in Latin America? This is one of the central questions guiding the ongoing research on “Technological Upgrading and Catching-up Through AI: An Analysis of Brazilian Firms”, by UNU-MERIT researchers, Rafael de la Vega, Florencia Jaccoud, María de las Mercedes Menéndez, Cecilia Seri and Tommaso Ciarli. In this research, funded by the Inter-American Development Bank within the Call for Research Papers on the “Economics of AI. Quantitative Empirical Research on the Economics of Artificial Intelligence in Latin America and the Caribbean” and supported by the UNESCO Chair on Science, Technology and Innovation for Sustainable Development for Latin America, the UNU-MERIT researchers explore the catching up potential of AI focusing on Brazil.
Relevance of the topic
AI, like past technological paradigm shifts, has the potential to enable lagging economies to leapfrog stages of development. Such transitions can offer latecomer countries windows of opportunity to reshape their growth trajectories. However, the realization of this potential depends heavily on how broadly and effectively new technologies are adopted and diffused.
For Latin America, where stagnant productivity is a well known problem and firm capabilities are highly uneven, the ability to seize the opportunities open by this emerging and radical technology is especially critical. Whether AI becomes a force for inclusive development or further concentration depends not only on innovation of top firms, but on the capacity of broader segments of the economy to absorb and adapt these technologies. In this sense, to understand what capabilities enable the emergence of firms developing AI technologies or related products is particularly valuable to inform public policy in the region.
Brazil: A Regional Leader in AI Patenting
While AI production globally is dominated by high-income countries, Brazil is emerging as a regional leader in Latin America. When looking at the global AI patent landscape we observe that, while the United States, China, and some European countries are uncontested global leaders, Brazil plays an increasingly central role in AI innovation in Latin America.
The majority of AI patents in Brazil originate from medium-sized (37.1%) and very large firms (27.4%), particularly in sectors such as computer programming and consultancy (16.6%), the manufacture of computer, electronic and optical products (7.2%), and financial services (6.6%).
Since 2015, there has been a noticeable rise in AI patent filings in Brazil, indicating a growing participation in frontier technologies. Although the scale of this activity remains modest compared to global leaders, it highlights Brazil’s increasing relevance as a key player in Latin America’s AI landscape.
The ongoing research
In the ongoing research, we are exploring the implications on firms’ performance of such AI innovations in Brazil, to understand if they are reflected in increased productivity and efficiency and if these results are heterogenous across sectors. Moreover, we are investigating the role that the local innovation ecosystems plays in shaping the emergence of AI-related firms, which can have important implications for the region, even beyond Brazil.
Reflections from the RSA Conference
On May 6-9th, Cecilia Seri, (UNU-MERIT PhD fellow and member of our UNESCO Chair team) presented some early insights of this work at the 2025 Regional Studies Association (RSA) Conference in Porto. The RSA Conference offered an invaluable platform to engage with scholars working on digital transformation and regional development and strenghten ties with other researchers focused on Latin American development.
As was highlighted in the plenary session on “Regional Studies – Present Priorities, Future Directions and Policy Relevance,” achieving shared prosperity and sustainable development requires paying particular attention to left-behind places – especially in the face of emerging technological and socio-economic transformations, such as those driven by advances in artificial intelligence and digital technologies. As Professor Maria Savona (Department of Economics and Finance, Luiss Guido Carli and SPRU, University of Sussex, UK) noted during the session, it is crucial to adopt the perspective of developing countries and to incorporate the theoretical and empirical insights that emerge from research conducted in these contexts.
The LALICS UNESCO Chair special session
On September 10-12th, the UNESCO Chair members María de las Mercedes Menéndez and Cecilia Seri will have the opportunity to present advances of the research at the UNESCO Chair special session on “Digitalization and Artificial Intelligence: developments and implications for Latin America and the Caribbean” in the LALICS Conference 2025. The special session will gather paper presentations from early career and senior researchers from the region and beyond and will discuss the dynamics of new technological developments in Latin America focusing on the impact of digital technologies on productivity and on labour markets, the interplay of digitalization with national systems of innovations, the implications of digitalization and AI for power relations among countries and between governments and business actors and digitalization and structural change among other topics.
