Local content policies: the experience of some others

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Developed countries

Local content policies geared towards promoting technology, innovation and research and development are more evident in advanced economies or countries where industries have reached a level of maturity. Regardless, however, it is still important as not only would companies invest in R&D but governments could provide financial incentives to local firms, encouraging them to develop superior technology to better enable these firms to compete globally. There are currently no firms in Guyana that are large enough to support R&D but this could be a government initiative to fund R&D at local education institutions.

In the Philippines, a minimum of 1.5 per cent of the operating costs annually must be allocated to support the development of mining technology and geosciences.

Sweden provides significant financial support to its research institutions specialised in mining-related activities and has developed at the same time, strong partnerships to connect businesses with R&D. Similarly, Finland provides substantial loans and grants to its public research institutions to support domestic companies in becoming global leaders in specific sections of mineral value chains.

In Norway, the government has implemented and promoted local content by establishing a mandatory condition upon international oil companies to transfer technology and expertise to scale up local participation in the oil and gas industry.

Impact

The implementation of local content policies have proven to work for countries. Given the emergence of Guyana’s oil and gas sector, and with the existence of a strong mining sector, local content policies could enhance the labour market, stimulate the development of domestic industries, and, possibly through this, add value to each industry through innovation from research and development.