In June 2015 President Rafael Correa decreed the creation of a fund to promote
innovative startups in Ecuador. This is part of a long-term strategy to diversify the
Ecuadorian economy away from its dependency on oil exports and generate new
industries that create better jobs and bring in more revenue to the economy. The fund
seeks to provide entrepreneurs with financial capital, support services and technical
assistance to bring new products and services to the market.
While there have been talks about different fund mechanisms that could serve as models,
the fund’s structure, scope and implementation approach have not yet been defined. Our
policy analysis reviews the difficulties that innovative entrepreneurs face financing their
initiatives in Ecuador, and assesses the characteristics that a policy should have to be
technically correct, politically supportable and administratively feasible. We consider
similar experiences from other countries and present four policy alternatives that the
Ecuadorian government could choose from.