Villalba: scaling requires connecting universities, capital and government
The LAVCA figures sketch a problem that begins after a startup is created, according to Villalba. Of the 3,032 Latin American startups that have raised venture capital since 2020, the report found, 27% secured more funding in the past 18 months, with roughly $2.4 billion deployed in the first half of 2026 going to a narrower group of companies and fewer new firms receiving their first investment. Villalba framed that finding through the Triple Helix model of innovation, developed by scholars Henry Etzkowitz and Loet Leydesdorff, which treats universities, industry and government as interdependent parts of an innovation ecosystem. Latin America already has entrepreneurs, investors, universities and public programs, she wrote. The question is whether they are connected well enough to function as a system.
For a young Latin American company, Villalba wrote, the central issue is less how much money arrives than whether it keeps flowing. In the United States, a startup can typically find different kinds of investors at each stage of its life — from a first small funding round through expansion and eventually a sale or a stock-market listing — within one currency, one financial system and a national market of more than 300 million consumers. Latin America’s investment market is much thinner, she wrote, and a startup that raises its first round needs assurance that larger investors will be present when it is ready to grow. Investors, in turn, need to know they can eventually sell their stake, whether to a larger company or on the stock market; when they do, their money and experience flow back into the next generation of startups.
Regional expansion presents a parallel challenge. On paper, Villalba wrote, Latin American countries are close together and much of the region shares language and cultural references. For startups born in smaller economies, however, regional scale often needs to be part of the business model from the start, and that ambition meets a region divided by different tax, labor and financial systems, and by separate rules for operating across borders and moving capital. A February 2026 Inter-American Development Bank study found wide regulatory differences in trade in services across Latin America and the Caribbean, with greater divergence associated with less cross-border trade. For digital startups, Villalba wrote, regional expansion often becomes a series of regulatory adjustments rather than a natural move into a larger shared market. National reforms can make a startup easier to create, she argued, but reducing the regulatory gaps companies meet each time they cross a border is what regional scale requires.
The university link is the third leg of Villalba’s framework. Beyond educating, universities can generate applied research, develop intellectual property and create spin-offs — new companies built on knowledge produced in classrooms and laboratories. Villalba pointed to Chile as an example. The Pontifical Catholic University of Chile identifies Elemental, the architecture firm led by Pritzker Prize winner Alejandro Aravena, as one of its university spin-offs. In 2007, the university licensed a modular construction system developed by university researchers to the firm, helping translate university-generated research into practical social housing solutions. Across much of Latin America, however, she wrote, university spin-offs remain relatively uncommon, and more knowledge-intensive startups will appear only when universities become places where companies originate, not just places that supply graduates.
Paraguay, Villalba wrote, is a useful example because several of these pieces are appearing at once. Entrepreneurs can now register a simplified company, known as an EAS, online with no minimum capital. Distrito Innova, a government-led project explicitly modeled on the Triple Helix, is under construction, with its technology park due to open in late 2027. Cooperation with Taiwan adds another layer, ranging from the Taiwan-Paraguay Polytechnic University to Yguazú Digital, a sovereign artificial intelligence computing center the two governments agreed in May to build. The real test, Villalba wrote, is not how many projects are announced or how much infrastructure is built. It is whether advanced training produces research that reaches businesses, and whether the companies that emerge from that process can find the capital and regional markets they need to grow. That happens only when universities, companies and government stop working in parallel.
Villalba closed by reframing the region’s preoccupation with “unicorns” — privately held startups valued at $1 billion or more. A unicorn shows that one company reached exceptional scale, she wrote, but says much less about whether the ecosystem can produce the next one. A city is not defined by its most iconic building, she wrote, but by how its public spaces and services work together. Innovation ecosystems are similar: their strength lies less in isolated successes than in the connections that allow the whole system to function. If Latin America strengthens the links between capital and companies, brings more research to market and makes regional expansion easier, more unicorns may follow, not as the goal of the strategy but as evidence that the ecosystem is working.
Andrea Villalba is a Paraguayan architect whose work and academic interests focus on project management, regional development and innovation. She holds a diploma in Regional Integration for Latin America and the Caribbean and is pursuing a master’s degree in project management. The views expressed in her UPI commentary are entirely her own.