The Evolution of the Brazilian National Innovation System. The Brazilian Innovation System from the 1950s to the mid 1980s
1. The Brazilian Innovation System and the BRICS project
José Eduardo Cassiolato
Economics Institute of Federal University of Rio de Janeiro
2. The Evolution of the Brazilian National Innovation System The Brazilian Innovation System from the 1950s to the mid 1980s
Partial successes in some sectoral innovation systems
The Brazilian NIS from the late 1980s and 1990s
Changes in the policy regime
Downgrading of some innovation systems
Brazil and the BRICS project
3. From the 50s to the 70s 50s -CNPq, Petrobrás and Airspace (CTA)
60s Funtec FNDCT and FINEP (funding the infrastructure)
70s Embrapa, Energy, Telecom and (later) IT
4. From a S&T&I point of view the model was based on a: Rapidly upgrading of the scientific infrastructure
Massive (and disorganized) import of technology (and capital)
Attracting foreign capital was perceived as a quick and easier way to channel modern technology into the economy
EMBRAPA & agro-industrial technology
strategic sectors: infrastructure, air space, oil, energy and telecom
auto industry (Fábrica Nacional de Motores was created in the late 1950s).
5. Structural Changes and Industrialization - selected countries, 1965-1980
6. The Brazilian NIS in 1990s 1 the crisis - development process subjected to an exchange-based economic system
3 structural changes
3 - downgrading of some innovation systems: disorganized privatisation of infrastructure (particularly telecom)
4 some remarking exceptions
agro-industrial systems (the role of EMBRAPA)
aircraft system (EMBRAER)
oil extraction and refining (Petrobrás)
other exceptions (services, for ex.)
5 the evolution of infrastructure
6 the macro policy environment
7. Selected developing countries: share in world exports and GDP growth, 1980-2000
8. Fragility of the Brazilian NIS
weak competitive performance with significant trade fragilities in all sectors of high added value and high technological content
widespread loss of national ownership in many sectors, weakness and reduced size of the remaining Brazilian business groups
persistent financial vulnerability of Brazilian-owned businesses resulting from very high costs of capital and inexistence of long-term financing mechanisms.
9. S&T infrastructure in Brazil evolved positively in the last decades Human Resources
Research activities, (expanded significantly):
in 2002 there were 15,158 research groups with approximately 59 thousand researchers working in 268 research institutions (the vast majority public universities and research institutes).
Brazilian scientific production has significantly augmented:
in 1991, occupied the 28º position in terms of production of indexed scientific and technical articles, got the 17ª place 2000
The average of articles originated in Brazil published in 1988-92 (3,166 or 0.6% of world production) increased four-fold in 1996-2000 (7,836 or 1.12% of world production).
Technological research institutes
10. Brazil: scientific articles published in indexed international scientific periodicals in the ISI, 1981-2002
11. However, instability in public support for the area Throughout the 1980s and during the 1990s, the fiscal crisis of the state and a lack of definition of what development strategy to pursue give contours to this pattern of instability
Total expenditure of FUNTEC (the most important S&T fund) fell from US$ 1.2 billion (1970-1979) to US$ 754.32 million (1980-1989)
After the stabilization program of 1994 public budgetary resources to S&T slightly increased in local currency (from R$ 3.1 billion to RS$ 3.3 billion in 1996), fell significantly till 2000 (when they amounted to R$ 2.8 billion), slightly recovering from 2001 with the implementation of the new sectoral funds
12. Brazil - investment in R&D and S&T as % of GDP 1996 - 2004
13. PINTEC (the Brazilian innovation survey 2000 and 2003) Important information for manufacturing sector
3rd survey will include some services
14. 1 Brazilian manufacturing firms are relatively less innovators than most countries
The innovation rate (percentage of firms that introduced in the market new or improved products and/or processes in the 3 years prior to the survey) of Brazilian firms were 31% in 2000
This compares to innovation rates above 60% in countries such as Sweden, Austria, Canada, Denmark, Switzerland, Ireland, Holand an Germany
15. Innovation in the Brazilian industry 2000 - 2003
16. Brazil - Innovation rate, % of sales in innovative activities and in internal R&D, by firm size 2000 and 2003
17. Manufacturing sector - Share of R&D expenditure over sales, Brazil (2000) OECD (1996)
18. 2 Innovation expenditures of Brazilian manufacturing firms are relatively high but decreased
PINTECs data suggest that Brazilian manufacturing firms spent in 2000 3.7% of sales in innovation.
This is equivalent to the average of the European Union and higher than 11 OECD countries, including the U.K (3.2 %), Italy (2.6 %) and Australia (1.9%).
In 2003 down to 2.4% (the effect of crisis)
19. Innovation Expenditures/Sales (%)
20. 3 Innovation expenditure of Brazilian manufacturing firms are concentrated on acquisition of capital goods while in most OECD countries expenditures are concentrated on R&D
More than 50% of innovation expenditures of Brazilian manufacturing firms refer to the acquisition of tangibles (basically machinery).
In most OECD countries this share is between 10 and 20% .
In those countries internal R&D is responsible for the majority of innovation expenditures (30 to 60% of total innovation expenditures), while in Brazil this share is below 20%.
21. Distribution of expenditures in innovative activities by selected countries - 2000
22. Structure of expenditures in innovative activities in the Brazilian industry
23. 4 Innovative firms cooperate very little
Only 11% in 2000; down to 3.8% in 2003
Cooperation university/industry very low in manufacturing .
Higher in agro-business and services.
24. Brazil Manufacturing Sector - Share of firms with cooperative relations on total innovative firms
25. 5 - Innovative firms prefer other forms of protection than patents
26. 6 - Regional Imbalance of Private and Public Expenditures
27. Distribution of state R&D expenditures by states
28. Old Questions Firms do not perform R&D
Very few (formal) linkages between firms and R&D infrastructure
29. An old question the role of TNC subsidiaries Although inflows of foreign capital in the 1990s are approximately 13 times of what was observed during the 1970s, economic growth has been 50% lower than the what was obtained in that period.
FDI in the 1990s
directed to merger and acquisition of existing firms rather than green field investment.
market seeking forms
Although changes of the 1990s explicitly attempted to foster increase in innovation and R&D expenditures by subsidiaries of MNCs, the net result has been the opposite
30. Most innovative firms (that differentiate products) Structure of innovation expenditures (% of sales) - 2000
33. The Challenges Macro-financial autonomy to Develop Innovation and Competitiveness
Cope with diversity the regional and local dimension
Reducing regional differences
Support local innovation systems
Policy for innovation systems
Important positive changes recently but needs:
Changes from an emphasis on firms and organizations to a systemic approach
Support internationalization of big local firms
Need to increase R&D by local firms (financing)
Management capability on government and organizations (firms, universities, etc)
34. The Brazilian BRICS research project RedeSist - network of research organizations
Partnership with FINEP- Ministry of Science and Technology
Support from other government agencies
Already engaged Ministry of Interior, IBGE, FioCruz and Inmetro
To be engaged Ministry of Planning, other agencies of the Ministry of Science and Technology, Ministry of Foreign Affairs, Ministry of Industrial Development and others
Private organizations IEDI
A BRICS Seminar in Rio (late 2006/early 2007)
35. The Brazilian proposal for the BRICS project What are the main features, weaknesses, strengths and opportunities of the BSIs?
How adequate, embedded and sustainable (environmentally, economically, socially and politically) is the BSI?
What areas of the BSIs present interesting field for comparative analysis with the IS of other BRICSs?
What sort of conceptual and empirical knowledge have we accumulated and could be useful in a BRICS project?
36. General Themes - NIS Innovation, finance and funding
The macroeconomic regime and the NIS
Industrial dynamics and innovation systems
Transnational corporations and NIS
Technological strategies of BRICS multinational firms
Official Statistics and Innovation Indicators
37. General Themes - NIS Regional imbalances of the NIS
IS and Environmental industry and services
The role of metrology and standards in the NIS
Intelectual property rights and the NIS
The role of education in the NIS
Level of informality and the NIS
Policies for SMEs in (local) innovation systems
Local (indigenous) knowledge and the NIS
38. Sectoral/Local IS Fossil fuels IS and Policy
Telecommunications innovation systems
Public Health IS
Agro-industrial IS - Sugar Cane-Alcohol
39. Other topics on local systems already studied by RedeSist A methodology to study local innovation systems
Date base of more than 3000 SMEs
Indicators of innovation, cooperation and learning
Agro-industry (basic food, Amazon fruits, wine, etc.)
40. Brazilian S&T expenditures