Human capital and science: The Most Profitable Investment for Paraguay

Abstract

Paraguay faces a structural challenge in science, technology, and innovation (STI), reflected in a historically low investment in R&D, amounting to less than 0.2% of GDP, far below the regional and global average. This situation limits economic productivity, the diversification of the economy, and the creation of quality jobs, while also hindering the reduction of inequalities and resilience to external shocks. International evidence indicates that advanced human capital is key to development, explaining up to 75% of productivity differences among advanced economies and generating positive effects on innovation and the accumulation of physical capital.

Strengthening human capital through higher education, postgraduate training, the incorporation of researchers into universities, and the connection between universities, businesses, and the State is essential to harness the benefits of STI. In Paraguay, programs such as CONACYT and BECAL, partially funded by FEEI and Itaipú Binacional, are strategic pillars for sustaining human capital development and strengthening the national research ecosystem. However, the continuity of these programs requires social and institutional understanding and support to ensure their long-term effectiveness.

The benefits of this investment are multiple: academic, by increasing the number of professionals and scientific output; economic, by boosting productivity and diversifying the economy; and institutional and global, by strengthening the country’s position and facilitating international cooperation. In summary, investing in education and human capital constitutes the most profitable policy, offering a path toward productive, competitive, and innovative development, and making science and technology engines of prosperity and sustainable well-being for Paraguay.