Purpose This study aims to explore the institutional complexities associated with the design and implementation of a natural resource fund for innovation. Design/methodology/approach This study examines the case of Chile's Innovation Fund for Competitiveness by means of a historical approach building on interviews with key informants. Findings The proper functioning of a natural resource fund for innovation requires efficient institutional and operational structures, as well as strong coordination with innovation system actors. In particular, the case of Chile highlights the challenges inherent in adopting a regional approach when implementing this type of strategy, due to the institutional voids that hamper the role of regional governments in emerging countries. Originality/value Natural resource funds for innovation constitute a strategic mechanism for developing the innovative capabilities necessary to enhance the competitiveness of resource-rich emerging countries. This is one of the first studies addressing the institutional challenges involved in setting up this kind of fund in practice, focusing on one of the most relevant and longstanding examples from Latin America.

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