New law seals future of tech fund

The Chilean government is moving ahead with plans to implement a new technology innovation fund upon approval last Friday (May 27) of the Royalty II law, which introduces a special tax on mining companies. Royalty II will apply a 5% tax on the operating profits of most medium-to-large mining companies, which the government expects will fuel the fund with US$150mn a year. The proceeds will finance scientific research, technological innovation and human resources training at a national and regional level. We do not expect to use all resources from the royalty. The idea is to create a fund and invest only the annual revenues it generates in new technological developments, El Diario Sur newspaper quoted Chile's education minister Sergio Bitar as saying. The government is currently designing a 10-year program that includes a strategic council for innovation, an entity that will gather representatives from the government, private sector and research centers. "[The new entity] will not only determine the use of the resources but also establish all policies related to science and technology in the medium term, synchronizing efforts that now seem dispersed between several funds and projects," Bitar added. In Chile, 70% of funds for research and development in science and technology come from the private sector, unlike more developed countries. Chilean investments in R&D represent nearly 1.2% of GDP, compared to 2.1% in developed countries. The draft bill to create this fund should be discussed in the lower house as a priority issue, considering the executive branch plans to launch the project before President Ricardo Lagos ends his mandate next March.