November 8, 2016

Programme for the Development of Entrepreneurial Investment in Technology (PROFIET)

Americas
Policy/Program
Please list the implementing agencies

Ministry of Science, Technology and Productive Innovation (MINCyT)

Lifecycle of target firms for this policy instrument
Scale-ups
Support offered
Direct Financial Support
Indirect Financial Support
Level of intervention
Firm-level
Barrier(s) addressed with this policy tool
Access to Capital
Regulatory
Ecosystem Engagement/Coordination
Policy timeline

MINCyT created PROFIET in 2009 and completed its regulatory framework two years later. Operations began in 2012. To date, the program’s financial benefits have been indirect, consisting of tax credits for businesses and stock-linked tax breaks for investors. Between March and November 2016, PROFIET will open a call for expressions of interest regarding direct financial contributions.

Stated goal/metrics of the policy instrument

PROFIET’s objectives are:

  • Promote the use of technology as a tool to increase the competitiveness of the productive sector and to address priority problems in the social sector. 
     
  • Encourage the creation and consolidation of technology-based companies. 
     
  • Encourage investment in technological ventures. 
     
  • Support other bodies/institutes creating a market for innovative technological ideas.

 

The program focuses investment in three specific fields; biotechnology, nanotechnology, and ICT. Approved projects must include significant R&D in order to push sector-wide improvements.

Evidence of results

Thus far, three companies have received tax credits: Bioceres SA, BioBox SA, and ArgFood SA. Bioceres SA launched a stock offering backed by MINCyT in 2012 where 50% of investors’ purchases were eligible for tax deductions. The Ministry’s action resulted in Bioceres SA attracting close to $30m in capital inflow. You can read more about Bioceres SA’s story in Section 11, Number 1.

Challenges, criticisms and lessons

Argentina remains a prohibitive market for startups. The nation’s regulatory framework contains numerous procedures, costing time and financial resources. In 2012, the country ranked 154th out of 185 countries in “starting a business.” PROFIET exemplifies a measure that softens some of the adverse effects of Argentina’s excessive red tape.

Notes and additional context

MINCyT created PROFIET in 2009 and completed its regulatory framework two years later. Operations began in 2012. To date, the program’s financial benefits have been indirect, consisting of tax credits for businesses and stock-linked tax breaks for investors. Between March and November 2016, PROFIET will open a call for expressions of interest regarding direct financial contributions.

Once a project is approved for funding through PROFIET, it is presented to investors through five companies: Zeller S.A., Leco Technology Trust S.A., Capital para Pymes S.A., BMR Mandatos y Negocios S.A., and SABERR SRL. 

  1. Feeney, Robert, Carlos Perez, and Pablo MacClay. "Bioceres: AG Biotechnology from Argentina." Int. J. Food System Dynamics 7:2 (2016), 92-114.
  2. Program Website: http://www.profiet.mincyt.gob.ar/ (in Spanish)
  3. Much of the information included in this entry comes from the OECD Development Centre’s report, “Startup Latin America: Promoting Innovation in the Region.” The full report can be found here.
Geographic scope
National-level