Financing Manufacturing Innovation in Argentina, 1890-1930

Between 1890 and 1930, Argentina's manufacturers invested in imported machinery. Although they aligned with political allies to advance and protect their companies, their dependence on imported machinery, raw materials, fuel, and expensive skilled labor were obstacles to their success. Two factors slowed the progress of these entrepreneurs: their lack of technological capabilities and the absence of government policies to address the problems entailed in importing foreign machinery. Several political factions supported industry's efforts to reduce dependence on imported products and to diversify the economy. While these supporters hoped to promote industry through the passage of legislation to raise the tariff rate, their strategy represented a compromise that stifled the drive to innovate that is so necessary for long-run economic growth and industrial development.