FELIPE GAJARDO, PROCHILE: "We need to develop a culture of innovation in Chile"

• Interview with Felipe Gajardo, Trade Director of the ProChile Promotion Office of Eastern Europe

Reporter: What is the "Start-Up Chile" program?

Felipe Gajardo: "Start-Up Chile" represents an invitation which the Chilean government makes to young entrepreneurs from all over the world to come to Chile and to try to develop their business ideas there.

What does the program consist of exactly? The Chilean Economic Development Agency (CORFO) offers entrepreneurs who get selected 40,000 dollars and a visa valid for one year, and they are expected to live in Chile for at least six months. If they wish, they can leave for more than one year, their right of stay can be extended. Aside from working on the business project, they have the ability to participate in various events, seminars, workshops, where they can interact with other people who are doing similar things.

The Chilean government does not take a stake in the company, in exchange for the amount granted, nor does it require the reaching of performance targets. What the government wants is for the chosen entrepreneurs to share their expertise with the young Chileans, to inspire them to start their own businesses.

The goal of the "Start-Up Chile" program is to develop an entrepreneurial culture in the country. We want the Chileans to understand better what is happening in the world, to be exposed to new ideas, to innovative approaches and to stimulate them to come up with such visions themselves.

Reporter: How did the Chilean government decide to launch such a program?

Felipe Gajardo: We are an open economy, based on exports and we understand that the world is changing very fast, and we need to change with it. An important part of today's businesses concerns the manner in which you will do things tomorrow. In order to remain competitive on a global level, we need to develop a culture of innovation at a national level. Because of that, the government has decided to bring to Chile people who have innovative projects, which would stimulate a spirit of innovation in the Chilean society.

Reporter: How does the "Start-Up Chile" program work, concretely?

Felipe Gajardo: On the website of the program are requests for the submission of applications. In a year, there are approximately three periods, during which applications can be submitted. The following period for submitting applications starts in March next year.

The eligible projects must have been launched on the market at least two years earlier. We do not confine ourselves to projects that have not been launched yet. Of course, if an entrepreneur has started a successful business, this program isn't directed at him. Our target is represented by people who need time to develop their projects, who need interactions with people who do similar things, who would help them implement their ideas.

The people who want to take part in the program can find all the necessary information on the website, where they can also fill out the registration form. The applications are then sent to our partners, specialists from various countries, which they evaluate, they compare them to the received requests and, if they decide that they are good enough, they send in letters of acceptance.

We do not have a fixed number of projects which we accept on the occasion of every edition. The number depends on the quality of applications. Our goal is to reach 1,000 projects in three years. At the moment, we have less than 500, at mid-period.

The applicants who have received acceptance letters can then request to receive the visa. After receiving the visa, they can leave for Chile, where they will receive assistance in obtaining lodging and then organizing their working facilities. These offices are not isolated, the participants in the program have the opportunity to interact with one another and to exchange information. It may take a few months between the moment of the acceptance and the departure to Chile.

The "Start-Up Chile" program is not limited to the 40,000 dollars which the government offers to the applicants who get accepted, but it also involves the exposure to a network of entrepreneurs and investors. Participants can come in contact with companies that want to launch new businesses and which they can finance.

Reporter: How did the projects which you have accepted so far evolve?

Felipe Gajardo: Every project has its own pace of growth, a pace which also depends on the stage that they were at when they were accepted. Some ideas, however, are at an incipient stage, and it takes a lot until the first results are seen. Some of them are at a more advanced stage, and some signs are already visible.

Reporter: Did any of the projects which you have accepted fail?

Felipe Gajardo: So far, no. The results have been good until now. The environment which we have succeeded in creating helps participants define their project better. Some businesses launched through the "Start-Up Chile" program have seen an international success, and the program has been presented in renowned publications. Many people have created similar programs, inspired by its success.

Some of the entrepreneurs have chosen to stay in Chile more than six months, or even one year, by requesting the extension of the visa. They have done that because they consider that the country provides them the necessary conditions for achieving their goals. Also, Latin America is a "hot" spot, from an economic point of view, at the present time. In Europe, activity is slow, and in North America it is slowly recovering, but the pace is not extraordinary. On the other hand, Latin America is growing very quickly. Our economy is expected to grow 5%, this year. Mexico is also doing very well. And let's not forget about Brazil, which has slowed down, but it is a very big market. All of this makes Latin America a very good alternative as a possible location for starting a business.

Chile has a very friendly business environment, with a high degree of professionalism of the workforce.

Reporter: Attracting entrepreneurs represent a goal for many companies. Which are the competitive advantages which Chile has in this "fight"?

Felipe Gajardo: The biggest advantage is represented by the open economy. Chile is a gateway into Latin America. Many companies wanting to do business in this region choose to come to Chile first. The legislative environment is very transparent and very open to the business community. Both the number of taxes and their rates are low, and they do not pose obstacles to setting up businesses. The system isn't perfect, which is something that we are aware of, but is constantly improving. And one of the ways which we are trying to create an investment climate is the development of a culture based on innovation. This is not just about technological, but financial innovation as well. Banks will need to create new financial instruments, because there will be more demand which will need to be met. Chileans banks have a classic financing policy, and they target big and medium companies. But if an increasing number of people will ask for funds, for businesses with a higher risk level, we hope that this will determine the financial system to develop solutions for them.

There are also investment funds specializing in this type of businesses, which we are trying to attract. They go to places where they see something interesting. And a number of a few hundred projects, which is growing, represents an element that would attract them. Not all of the projects will obtain the financing they need, but some of them will. "Start-Up Chile" is trying to get entrepreneurs in touch with the potential investors. For an individual it is difficult to knock on the funds' doors, but, if you represent a group of entrepreneurs, you can attract a higher level of interest.

Reporter: Are there Romanian participants in "Start-Up Chile"?

Felipe Gajardo: There are over ten projects from Romania. From Poland we have three. We have attracted interest from some developed countries as well, such as the United States or Italy, but this is not that significant, because these countries also offer interesting opportunities for launching new businesses. So far, we have received applications from 17 countries.

Reporter: You have presented the program in front of some Romanian students. What was their reaction?

Felipe Gajardo: After they found out what it is about, they become extremely interested, because it does not represent just the opportunity to start a business, but also to inhabit another country, to experience another culture and to interact with people from various other countries. For many participants, the program represents the incentive to implement their ideas.

It is also very important that in exchange for what it is offering, the government does not ask to hold a stake in the business, but only that the entrepreneurs share their expertise with the people of Chile. For us, it is a long term investment, which has both a large business component, as well as a social one. The final goal is the introduction of the culture of innovation in the mind of Chilean youngsters, which in turn will have a positive influence on the development of the country.

Reporter: Thank you!