The Chilean Wine Industry - Its Technological Transformation and New Export Orientation*

By Morel-Astorga, Paulina | Ibero-americana, July 1, 2001 | Go to article overview

The Chilean Wine Industry - Its Technological Transformation and New Export Orientation*


Morel-Astorga, Paulina, Ibero-americana


I. INTRODUCTION

The Chilean wine industry has gone through a profound technological and organizational transformation during the last decades. It has, in a few years, become one of the most successful Chilean export industries. There are some reasons why it is important to try to understand the transformation of the Chilean wine industry. First, it has taken place within the frame of agricultural development in Chile during the last decades. Second, it is part of the technological transformation of the international wine industry under the process of globalization. This article discusses three questions: 1) What effect has government policy had over the industry? 2) How has the globalization process influenced Chilean wine sector? 3) Can changes in Chilean wine industry be linked to the discussion about a new entrepreneurial model in Chile?

II. PREVIOUS DISCUSSION AND SOURCES

Most academic discussion about Chilean Agriculture concerns the export development under the neo-liberal regime, after 1973, in this discussion there are two main streams. The first stream of discussion is the State-market relations. Actually, most scholars can in a greater or lesser degree be placed in this group. The argument is that the chock treatment of the neo-liberal policy implemented by the military regime and the subsequent changes in institutional setting were responsible for the actual changes in the economic development of agriculture. The most radical and influential measures are the stop of state interventionism; massive privatization; opening of the economy to foreign competition; and liberalization of the price system (Foxley1982, Meller 1996, etc.). Several authors have highlighted the long-term conditions created by state action and the regulations favoring the export sector for fruit. Cruz and Leiva (1982), Sáez (1986), Gomez and Echefiique (1991) have suggested development strategies during the 1960's and early 1970's were significant in creating the experience and bank of knowledge, as well as the continuity in agricultural policy for providing the base for export growth. In addition, they argue that the state favored an aggressive export strategy after 1973.

The second approach is the Entrepreneurial discussion highlighted by Cecilia Montera (1997) who studied different entrepreneurial models in Chile during the 20th century. As a theoretical contribution her work stands for a different view. One of her main points is that the application of neutral economic policy helped developing economic activities that presented immediate comparative advantages. The institutional change was so profound that the business structure transformed from a rent-seeking system to a Schumpeterian entrepreneurial system. This was achieved through the implementation of 1) A new system of incentives and the fact that the state had the capacity to actually implement them. 2) A new ideological project that changed the social and cultural incentives and the meaning of economic success. 3) A reallocation of human resources from the state enterprise to private enterprise. 4) A new financial system that provided the means of development, etc. Echeñique and Gomez (1986) tried to identify an entrepreneurial profile and link it to the Schumpeterian entrepreneur through a study of the most successful agricultural producers. Their main conclusion was that agricultural development has been strongest among people who inherited their land. According to Gomez and Echefiique, agricultural development has occurred through the expansion of small and medium sized enterprises with large investments in technology. They underline the importance of continuity in the process.

Changes of Chilean wine industry has not drawn too much academic attention as a separate subject; it has mostly been covered within studies of the agricultural sector in general, with the exception of Jose del Pozo's work on the last 150 years of Chilean wine industry. …

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