Paraguay's Business Innovation System: Structure, Challenges and Opportunities

This study analyzes Paraguay's business innovation system during the 2018-2020 period using a neo-Schumpeterian approach.The research applies social network analysis to innovation survey data, constructing bipartite networks with system actors and companies to examine linkages both at the systemic level and by specific innovation objectives.The analyzed network presents low density (0.012) and intermediate modularity (0.203), indicating strategic selectivity in relationships with six distinct communities.Results reveal a hierarchical system dominated by commercial actors: Customers achieve perfect eigenvector centrality (1.0) while Universities and Laboratories remain peripheral (centralities 0.2387 and 0.2174).Sectoral analysis shows manufacturing dominance (65.58%) with specialization of the information and communications sector in knowledge-intensive activities (38.42% in R&D networks).Objective-specific networks exhibit significant variation, with R&D showing the highest connectivity (density 0.030) and financing the greatest fragmentation (modularity 0.554).The findings reveal a pattern of "dominant commercial intermediation" in innovation systems of small emerging economies, where customersupplier relationships substitute traditional institutional linkages as the primary mechanism for knowledge transfer.This pattern aligns with ECLAC's identification of alternative innovation pathways in Latin America, suggesting that market networks provide system resilience.Key policy implications include leveraging supplier networks for technology transfer, developing integrated financing mechanisms, and creating shared testing infrastructure while preserving existing advantages of business dynamics.