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Innovation for productivity growth

Innovation for productivity growth. Fernanda De Negri Director Division of Production and Innovations Studies – DISET Institute for Applied Economic Research – IPEA. Productivity in Brazil. Productivity estimates in Brazil: annual growth rates, several periods.

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Innovation for productivity growth

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  1. Innovation for productivitygrowth Fernanda De Negri Director Division of Production and Innovations Studies – DISET Institute for Applied Economic Research – IPEA

  2. Productivity in Brazil

  3. Productivity estimates in Brazil: annual growth rates, several periods. Source: De Negri and Cavalcante (chapter1) in De Negri, F. e Cavalcante. L.R.M.T. (2014) Produtividade no Brasil: desempenho e determinantes

  4. Labor productivity: annualgrowth rates (2000 to 2009)

  5. Labor productivity: the distance between Brazil and other countries Miguez e Moraes (chapter 7) in De Negri, F. e Cavalcante. L.R.M.T. (2014) Produtividade no Brasil: desempenho e determinantes. Basedonthe World Input-Output Database (WIOD)

  6. The main causes oflowproductivity are relatedto: • Technology andInnovation, butalsoto: • Infrastructure • Education (alsoaffectinnovation) • Competition (alsoaffectinnovation) • Business environment (alsoaffectinnovation)

  7. Innovation Policies in brazil • The percentage of firms that have declared getting governmental support to innovate increased from 19% in 2003 to 34% in 2011 • Most of public support (75%) is related to machinery financing programs • The percentage of firms benefited from specific innovation instruments increased from 4,6% to 8,6% of innovative firms between 2003 and 2011

  8. Maininnovation policies in Brazil

  9. Tax breaks toinnovation: 2000 to 2013 (R$ bi)

  10. Credit for innovation: 2007-2014 (R$ bi)

  11. FNDCT’s budget: 2000-12 Demanddriven: Only30% oftheresources are used in projectswithcompanies No focus

  12. Some ideas for debate POLICY RECOMENDATIONS

  13. 1. Increasemissionoriented S&T spending Public S&T spending in Brazil is not mission-oriented Only 30% of S&T investments are attached to institutions with problem-solving missions More than 90% of S&T investments are mission-oriented

  14. 2. ReformulatetheProcurement Law includingthepossibilityof R&D acquisition Thereis no clearregulationabouttheacquisitionof R&D bypublic sector in Brazil. • The BrazilianProcurement Law (Lei 8.666) doesn’tmention R&D acquisition. • The law establishes, since 2010, a margin of preference for products produced in Brazil (up to 20%) and for products with Brazilian technology (up to 25%) • There is no a special part devoted to R&D acquisition as there is in the American Federal Acquisition Regulation. • The Innovation Law (20th Article) prescribes that Brazilian government can hire a company to do R&D to develop new products and process. • However, this possibility has never been used up to now(difficulties of implementation?) • The Knowledge Platform Program (launched last year but not implemented) is a good example of using public procurement to foster innovation.

  15. 3. DiversifyBrazilian S&T system • The Brazilian S&T institutions are mainly public. It’snecessarytoallowandfacilitatetheoperationofprivateresearchinstitutions. • Reinforcedifferentmodelsofinstitutions, suchthesocalled Social Organizations (OS), that are Government-ownedandprivately-operatedinstitutions. • Create different ways in which the public sector can foster innovation, besides the existing ones (grants, credit and direct investment in public research institutions): i) R&D acquisition; ii) Venture capital and seed money funds; iii) Cooperation agreements and so on. • Create different models of public agencies to foster innovation: the recent creation of Embrapii (inspired in the Fraunhofer model) is a good example of institutional diversification. Others examples are necessary.

  16. 4. Improve Business environmenttoinnovation • Besides improving general business environment, allowing more competition and entrepreneurship, specific actions are needed: • Reduce bureaucracy associated with research and development. Examples: biological research; patent application mechanisms… • One important improvement was the Biodiversity Law (recently approved). • Reformulate and update the Innovation Law. Created in 2004, some articles have never been used. • Facilitate the ways for researchers and professors in public institutions to work for companies. • The S&T Code (now in NationalCongress) adress some ofthe legal problems.

  17. 5. Build a more open andcompetitiveeconomy • Brazilis a veryclosedeconomy. It’snecessary (notsufficientbutnecessary) to open theeconomyandtoimport more technologyandknowledge. • IncreasetheinternationalizationofBrazilian Science (the “Science withoutborders” programis a goodiniciative) • Facilitateimportsofresearchequipmentsand inputs • Increasethepresenceofforeignreserachers in BrazilianInstitutions.

  18. 6. Invest in big scienceandresearchinfraestructure • Brazil needs scale up it’s research infrastructure • Create new, big and mission oriented research institutions • The size of Brazilian research laboratories is not enough to make a competitive science. 7. Improve monitoringandevaluationindicators

  19. fernanda.denegri@ipea.gov.br Thankyou!

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