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Investment in research and development (R&D) and innovation has been increasing in recent years in Peru, partly as a result of a greater government commitment to science, technology and innovation issues. Spending on science and technology R&D increased by 93.6% between 2011 and 2014. This investment seems to be paying off in terms of institutional development, sector incentives and increased funding, as well as an overall improved standing in global rankings in innovation and innovation-related issues. However, there is still much to accomplish as Peru continues to lag behind regional benchmarks in many respects, with improvements still needed in key areas such as availability and access to funding, limited public policies and instruments, inadequate infrastructure, insufficient human capital and intellectual property protection. This chapter contains interviews with Gonzalo Villarán, Director of Innovation, Ministry of Production, and Karl Maslo, Regional CEO, EXSA.

As economic growth has slowed in recent years, weighed down by a combination of volatility and relatively weak demand in the primary and extractive sectors, strength in Peru’s ICT industry has been a constant bright spot. The telecommunications sector has been particularly dynamic, spurred by increased competition, investment and consumer use. The early signs are that these trends have carried over into 2017, with growth remaining in the double digits, more new players entering the market and progress continuing to be made toward rolling out next-generation fibre-optic infrastructure nationwide. At the same time, the regulatory framework continues to be strengthened, with a particular focus on boosting competition, bringing down prices and otherwise protecting the interests of Peruvian consumers. This chapter features an interview with Gonzalo Martin Ruiz Díaz, Former President, OSIPTEL.

Thanks to its unique historic and cultural offering, including one of the world’s most exciting cuisines, Peru is the fastest-growing tourism destination in the region. International tourism inflows rose by 7.7% in 2016, according to the “Economic Impact 2017 Peru” report by the World Tourism and Travel Council (WTTC), posting faster growth than anywhere else in the Americas, and above the global average of 3.9%. According to the WTTC, Peru’s travel and tourism sector was directly worth PEN25.7bn ($7.6bn) in 2016, or 3.9% of GDP, a figure which is estimated to rise to 5% of GDP within a decade. The sector’s total contribution was put at PEN66.2bn ($19.6bn), a considerable 10.1% of GDP. This is forecast to reach almost 12% of GDP by 2027, making tourism one of the country’s critical sectors. This chapter includes an interview with Eduardo Ferreyros, Minister of Foreign Trade and Tourism

Despite the effects of El Niño in 2017, agriculture’s prospects remain positive. According to the Ministry of Agriculture and Irrigation, projections, the sector is expected to post average growth of 3-3.5% in 2017, with exports projected to increase by 20-25% to reach $6bn. In the longer term, ongoing public programmes to assist small-scale farming should help to ensure that more smaller producers are integrated into the attractive export industry, while public-private initiatives to develop Peru’s vast forestry resources could see this segment play an increasingly important role in the future of the country’s economy. This chapter features an interview with Juan Varilias, President, Association of Exporters.

The transport sector will remain a vital aspect of Peru’s economic success, and reducing the current infrastructure deficit is key to sustaining recent positive growth trends. In light of the 2017 flooding crisis, the Ministry of Transport and Communications is now urgently prioritising investment in transport infrastructure so as to restore the minimum conditions for the private sector to operate. This investment will, in turn, deliver an important boost to economic activity across several sectors, creating jobs in the process. To better compete internationally and accelerate the economic growth of its regions, Peru will also have to prioritise reducing its logistics costs. This chapter features interviews with Lizardo Helfer, General Manager, Cosapi, and Félix Antelo, CEO, LATAM Airlines Peru.

While there are disagreements regarding the short-term economic forecast for industry, the consensus for 2018 is considerably more upbeat. By that time, reconstruction and other infrastructure projects should be well under way, delivering the positive shock that the domestic economy, and the sector, urgently requires. In addition, the retail sector in Peru has been the second-fastest-growing sector of the economy over the past decade, after construction, driven by rising consumer spending. Retail sales peaked at $64bn in 2013-14, before falling back to an average of $61bn in 2015-16, in line with the slightly cooler economy. Peru’s total private consumption has more than doubled in nominal terms since 2007 to peak at $132bn in 2014, easing a little in 2014-16 to around $126bn, and the country ranks seventh in the region for this indicator, meaning that there is tremendous room for growth. This chapter includes interviews with Alfredo Pérez, General Manager, Alicorp, and Juan Pablo García Bayce, General Manager, Gerdau Siderperú.