Abstract
This chapter suggests that low innovation performance of Brazilian firms is one of the main reasons for productivity stagnation and technological regression of the country’s export basket in recent years. Although the last decade was undoubtedly prosperous for Brazil in terms of income and exports growth, that process was strongly determined by the 2000’s commodities boom. When compared to OECD and more dynamic developing countries, Brazil presented inferior performance in innovation inputs and outputs indicators, such as business expenditures in R&D, patents, and introduction of new products in the market. We assert that there are important government initiatives in place to face this issue and support private firms’ innovation activities. However, that effort is still insufficient and threatened by the institutional weakness of the national innovation system. The recent reduction in subsidized credit and grants for business expenditures in R&D exemplifies the problem.
The opinions expressed in this chapter are the author’s own and do not necessarily reflect the view of Brazilian Innovation Agency (Finep).
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Notes
- 1.
As forecast by the Central Bank of Brazil, 15/10/2018, available at: http://www.bcb.gov.br/pec/GCI/PORT/readout.asp
- 2.
It is important to have in mind, however, that the quality of Brazilian publications still needs to be improved. Although Brazil is the 14th most published country between 2003 and 2012, the percentage of these publications among the 10% most cited is only 6.7%, a rate similar to China, a country known for the poor quality of its publications.
- 3.
A state-owned company under the Ministry of Science, Technology, Innovation and Communications, focusing on supporting the whole innovation chain, from basic research in universities to innovation projects in companies.
- 4.
A state-owned company under the Ministry of Planning whose main objective is to provide long-term financing for investments in all segments of the economy.
- 5.
The credit instrument has contractual financial costs that are independent of the time taken to develop the technology and its eventual success, and it demands financial guarantees that prevent the sharing of risk between the entrepreneur and lender.
- 6.
National Fund for Scientific and Technological Development (FNDCT), created in 1969, is the main national fund for the financing of scientific and technological research, both in the academic and in the business sectors.
- 7.
Investment forms intended for startups and other smaller firms, where in addition to financial resources the investors contribute with knowledge and networking, among others.
- 8.
In addition to the support for the seed and angel capital industry, two of the venture capital (VC) subcategories, Brazilian Innovation Agency (Finep) and National Bank of Social and Economic Development (BNDES), also supported sharply the structuration of the VC industry in Brazil. To date, for example, Finep has invested in 32 funds of VC, that have invested in 135 companies. BNDES and Finep also invest directly in innovative companies.
- 9.
Law 12,858/2013 removed the main source of revenue for the FNDCT, which was oil royalties. At the same time, expenses unrelated to innovation such as the educational program Science Without Borders have been transferred to FNDCT, further reducing its budget availability.
- 10.
Inspired by the operating model of the Fraunhofer Institutes in Germany, the Embrapii is a social organization under the Ministry of Science, Technology and Innovation (MCTI) that promotes cooperation projects between domestic companies and research institutions, focusing on the pre-comercial phase of the innovation process.
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Hamatsu, N.K., Mazzi, C.T. (2019). Innovation for Competitiveness in Brazil: An Overview of Recent Performance and Main Government Policies. In: Grivoyannis, E. (eds) International Integration of the Brazilian Economy. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-46260-2_5
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