O Instituto Inovação apresenta uma atualização doestudo “Onde Está a Inovação no Brasil?” publicado em2004. Com grande rep...
ANALYTIC INDEXEXECUTIVE SUMMARY .............................................................................................
INDEX OF FIGURES AND TABLESFigure 1. Brazilian international scientific articles, indexed in Institute for Scientific Info...
EXECUTIVE SUMMARY        Three years after the publication of the first version, Instituto Inovação has revised its study,...
THE CONTEXT OF THE INNOVATION IN BRAZIL                           1.     Initial Considerations                           ...
2. The “Great Gap”                            The indicators of S&T indicate that since 1981, Brazil has developed conside...
Figure 2:: Factors that prevent approximation                               of Science and the Market                     ...
3. Knowledge as means to Innovation                          In the world we live today, capitalist and globalized, knowle...
4. Environment for Innovation in BrazilDespite the “Great          Brazil has many great characteristics related to develo...
Investments in Science and Technology                          Each year, more resources have been assigned to base resear...
Examples of initiatives for propagation of Culture of InnovationSeveral initiatives have   Knowing about the several actio...
Another indication that our country is increasing its tendency to the risk is the                              growth in f...
Figure 6:: Investments in R&D and Index of Innovation in                                                  relation to comp...
The most innovative companies are not necessarily those that invest more in R&D,                          but the ones whi...
Figure 8:: Possibilities of Open Innovation Model                                                        Source: Henry Che...
Instituto Inovação   Page. 16
WHERES IS THE INNOVATION IN BRAZIL?The study intended to        This study’s intent is: show that exist a valley and that,...
In spite of the change on the matrix analysis methodology, a few things hasThe cities where the          changed on the la...
The level ofindustrialization of citiescontributes to more generation        Figure 10:: Matrix showing Potential for Appl...
Figure 11:: More Industrialized cities                                                       (% of industries)            ...
The group of business centers is formed by Rio de Janeiro city, Porto Alegre and                           Brasília. These...
Figure 12:: Matrix showing Technological Application of                               Knowledge x Potential for Generation...
Figure 13:: HDI-M and Index of GDP/Capita                                         Elaboration: Instituto Inovação         ...
CONCLUSIONS                     The analysis included in this study does not exhaust, or intent to exhaust, the           ...
AUTHORSBruno Moreira got a degree in Megatronics from the Pontific Catholic University of the state of Minas Gerais (PUC M...
Instituto Inovação   Page. 26
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Where is the innovation in brazil?

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“Where is the innovation in Brazil?" has the main object of contributing to the discussion about Brazil’s potential for innovation and identify the cities, which given their involvement in science, provided the highest potential for the generation of innovations.

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Where is the innovation in brazil?

  1. 1. O Instituto Inovação apresenta uma atualização doestudo “Onde Está a Inovação no Brasil?” publicado em2004. Com grande repercussão em sua primeiraedição, o estudo tem como objetivo mapear oscentros brasileiros com maior potencial para odesenvolvimento de inovações tecnológicas a partir dainteração universidade-empresa. Nesta versão, novasanálises foram incluídas. Entre elas, a inclusão dosindicadores de patentes dos municípios, reforçando aimportância de aplicações para a geração de inovação. .
  2. 2. ANALYTIC INDEXEXECUTIVE SUMMARY ................................................................................................. 4THE CONTEXT OF INNOVATION IN BRAZIL ......................................................................... 51. Initial Considerations........................................................................................... 52. The Great Gap................................................................................................... 63. Knowledge as means to Innovation .......................................................................... 84. Environment for Innovation in Brazil ........................................................................ 9 Talent for Science ................................................................................................. 9 Investment in Science and Technology ....................................................................... 10 Law for Innovation, Property Law and Fiscal Incentives .................................................. 10 Initiatives for propagation of the culture of innovation .................................................. 11 Development of Risk Capital Industries ...................................................................... 11 Lager Investment in Innovation by companies .............................................................. 125. Companies: driving force behind Innovation ............................................................. 13WHERE IS THE INNOVATION IN BRAZIL? ......................................................................... 176. Potential for Knowledge Generation ...................................................................... 177. Potential for Application of Technological Knowledge................................................. 188. Potential for Interaction in Generation of Technological Innovations .............................. 21CONCLUSIONS ........................................................................................................ 24BIBLIOGRAPHICAL REFERENCES ................................................................................... 25Instituto Inovação Page. 2
  3. 3. INDEX OF FIGURES AND TABLESFigure 1. Brazilian international scientific articles, indexed in Institute for Scientific Information(ISI), in relation to those of Latin America and the world 1981 – 2004 ...................................... 6Figure 2. Factors preventing approximation of Science and the Market .................................... 7Figure 3. Socio-Economic and Science, Technology and Innovation (ST&I) Indicators .................... 8Figure 4. Growth of Investment in S&T.......................................................................... 10Figure 5. Evolution of expenditure of the Secondary Sector in Innovation and R&D .................... 12Figure 6. Investments in R&D and Index of Innovation in relation to company size..................... 13Figure 7. Dynamics of the formation of an innovative company ............................................ 14Figure 8. Possibilities of Open Innovation Model .............................................................. 15Figure 9. Matrix showing Potential for Generation of Knowledge .......................................... 17Figure 10. Matrix showing Potential for Application of Technological Knowledge ...................... 19Figure 11. More industrialized cities ............................................................................. 20Figure 12. Matrix showing Application of Technological Knowledge vs. Potential for Generation ofKnowledge ............................................................................................................ 22Figure 13. HDI-M and Index of GDP/Capita ..................................................................... 23Instituto Inovação Page. 3
  4. 4. EXECUTIVE SUMMARY Three years after the publication of the first version, Instituto Inovação has revised its study, which had great repercussion. In addition to the number of research workers, this new edition also considers the number of patents registered per city. This made it possible to generate the map showing Brazilian cities with the greatest potential for the generation of knowledge and the application of technological knowledge. The introductory part of this study highlights the “Context of Innovation in Brazil” which is characterized by the existence of a “Great Gap” separating the scientific production from the business sector. Among the reasons for the existence of this Great Gap are the culture and incentives for publications of research studies rather than the protection of knowledge, as well as the limited presence of research workers in companies. In the present context, in which knowledge is the basis for economic development, it is essential that the interaction between science and the market be stimulated so that this active can be exploited in the generation of benefits for the Brazilian society. Despite the “Great Gap”, the environment in Brazil is favorable for the development of technological innovations. Among the indicators of transformation are (1) growth in the number of research workers and the international recognition of Brazil in certain areas of expertise; (2) growth in investment in S&T in the past few years; (3) creation of regulatory goals to innovation, including fiscal incentives; (4) initiatives in the propagation of culture of innovation; (5) development of an industry for providing risk capital; and (6) increase in investments in innovation by companies. However, the “Brazil of Innovation” will only exist when all these transformations reach the companies, since they must be the driving force behind innovation. Giving the methodological adaptations adopted, this new version of the study attempts to identify the Brazilian cities most inclined to foster interaction between the academic community and the market. For the generation of knowledge, the following cities are very important: Campinas, Florianópolis, Porto Alegre, Rio de Janeiro, São Carlos, São Paulo and Viçosa. For the application of knowledge, other cities stand out: Belo Horizonte, Caxias do Sul, Curitiba, Franca, Guarulhos, Joinville, São Bernardo and São Paulo. Finally, the cities with the greatest potential for “Interaction for the Generation of Technological Innovations” are Belo Horizonte, Curitiba, Rio de Janeiro, São Carlos, São Paulo, Campinas, Porto Alegre and Florianópolis, the last three having been identified in the previous version of the study. Among the conclusions of the study is what can be done in the case of cities at the limits of these analyses: how research centers in cities emphasizing the application of knowledge (e.g. Caxias do Sul – RS) can be strengthen and how the economic development of the knowledge-generating cities can be encouraged (e.g. Viçosa – MG)Instituto Inovação Page. 4
  5. 5. THE CONTEXT OF THE INNOVATION IN BRAZIL 1. Initial Considerations The first version of the study “Where is the innovation in Brazil”?, published in 2004, had the main object of contributing to the discussion about Brazil’s potential for innovation and identify the cities, which given their involvement in science, provided the highest potential for the generation of innovations. The analyses of the first version of the study were limited because they did notThe first version of the include indicators of the productive sector in the evaluation of innovative potentialstudy did not include of cities and regions. Although it may sound strange, it is not the task of theindicators that make it university to generate innovations. Along with research centers, however, they dopossible to identify the play a very important role since they are storehouses of technology with marketrole of the companies potential. However, it must emphasized that if there is no application of thisinvolved in the process knowledge in a way which will generate benefits for the society, there will be noof innovation... innovation1. Technology with no application, in spite of the contribution to the expansion of the limits of knowledge, is only an invention, because it does not bring economic and social development. It is in this context that we are well motivated to up date the first version of the... in this new version, study and add a variable that makes it possible to understand the role of thenot only the number of private enterprise in this context of innovation – the number of patents registeredresearch workers in each by companies and institutions in Brazil in the last 10 years.city but also the numberof patents registered The methodology of the study was reevaluated from this point of view whichwas considered. considers the development of patents, profile and number of companies in each city as measures. The methodology of the study was reevaluated from this point of view which considers the development of patents, profile and number of companies in each city as measures. In this new version, Instituto Inovação has also made a slight modification in the methodology to analyze the impact of a mesoregion2 on the potential of a city to generate knowledge. In the previous study, only exact numbers of individuals with masters and doctoral degrees per city were taken into consideration. In the present study, however, the numbers were weighted relatively to the mesoregion where the city is located. The advantage of this modification is to capture more accurately the potential for the generation of new knowledge, since it is, in general, completely integrated into the research system of the cities around it.1 Innovation: it is the successful exploitation of new ideas. (DTI, 2003)2 Mesoregions are subdivisions of Brazilian states, grouping together various municipalities in close proximityand with common characteristics. They were created by the Brazilian Institute of Geography and Statistics forstatistical purposes and do not, therefore, constitute an administrative area.Instituto Inovação Page. 5
  6. 6. 2. The “Great Gap” The indicators of S&T indicate that since 1981, Brazil has developed considerablyIn last years, Brazil has when we consider the relevance of its scientific research. During this period, datademonstrated great from the Ministry of Science and Technology show that Brazil´s relativepotential for knowledge participation on the number of scientific Brazilian articles indexed in Institute forgeneration. Scientific Information (ISI) grows, as we can see at Figure 1. When we analyze the quality and quantity of articles and scientific publications, Brazil is well ranked in relation to developed countries. Some Brazilian institutions are among the 500 top universities in the world, which means a lot, considering that the oldest Brazilian university has not reached 100 years old. Figure1:: Brazilian international scientific articles, indexed in Institute for Scientific Information (ISI), in relation to those of Latin America and the world 1981 2004. Source: National Science Indicators (NSI) of the Institute for Scientific Information (ISI) Elaboration: General Coordination of Indicators Brazilian Ministry of Science and Technology But what does that mean to increase the number of articles and scientific publications, for the companies? Many businesspeople are tired of hearing that the science produced in Brazil is high quality, which generates many scientific articles and knowledge to be applied. The numbers of published articles little represents to Brazilian companies, especially to those that cannot see the opportunities that this knowledge can create. Analyzing the experience of those who are devoted to explore the environment of technological innovation, we conclude that there is a Great Gap between science and market in Brazil. The process of generation of knowledge and theHowever, we notice transformation of this knowledge in resources, despite some advances in the lastdifficulties in the few years, is still in the very beginning. There are several facts that indicate thattransformation of this science and market in Brazil do not communicate in an efficient way and also thatknowledge in resources we have many factors that resist to the successful exploration of innovationfor society.. opportunities generated at universities and research centers in Brazil. These factors are not only related to the academic community or to the companies, but to both and other agents that are part of the so called “innovation system”, like the government (see figure 2).Instituto Inovação Page. 6
  7. 7. Figure 2:: Factors that prevent approximation of Science and the Market Source: Instituto InovaçãoInstituto Inovação Page. 7
  8. 8. 3. Knowledge as means to Innovation In the world we live today, capitalist and globalized, knowledge is able to generate great value when assimilated (quickly) into products, processes or services. If BrazilIn the present context, has been slowly increasing its knowledge basis, showing that through the increasewhen knowledge is the of relevance of its publications, it is important that we explore this active to bringbasis for economic benefits to society.development, it isimperative that we A patent represents a concession, given by the State, which guarantees to itsstimulate the titular, the right to commercially explore its creation. Thus, it is understood thatexploration of this who registers it has the intention to use this knowledge to some practicalactive to generate application. So, the number of patents is an estimation largely used to indicate thebenefits to Brazilian level of innovation of a company or country. In this context, when the number ofsociety.. scientific articles published in international magazines increases faster than the number of Brazilian patents registered in the American office for patents (USPTO), it may be inferred that the relevance of Brazilian scientific research has been more well-known internationally than the innovations of the companies. Figure 3:: Socio-Economic and ST&I (Science, Technology and Innovation) Indicators (Brazil participation as percentage of world production) Source: Brazilian Ministry of Science and Technology; Goldman Sachs (2003); “Dreaming with BRICs: The Path to 2050”;CIA (2005); World Factbook, Analysis of Instituto Inovação.Instituto Inovação Page. 8
  9. 9. 4. Environment for Innovation in BrazilDespite the “Great Brazil has many great characteristics related to development of innovations: it hasGap”, the Brazilian a great potential to generation of knowledge, it is living a moment of enormousenvironment is favorable structural transformations on the innovation environment and also has developedto the development of the technological and commercial basis for the development of innovations.technologicalinnovations.” When we speak of an environment to innovation, we consider three wide dimensions: human, financial and structural. Considering the human dimension we have: the generation of scientific knowledge and the education of the work force. The second dimension refers to the capacity for public and private investment, making innovative strategies profitable at long terms. To conclude, the structural dimension is about contact network and information distribution, cooperation and legislation structures. The following paragraphs discuss about some characteristics and initiatives that prove the recent development of the dimensions that are part of the environment for innovation in our country. Talent for science In relative and absolute terms, the country is amongst world references in various areas of technological knowledge. Agriculture is just one example, but also in the health area (specially referring to tropical diseases and SIDA treatment),The growth in the aeronautic and mining. This position of Brazilian science among the leaders gives usresearch workers’ basis credibility to approximate our projects to companies or research centers, includingand the international international ones.recognition of Brazil forits vocation in some The number of vacancies for under-graduation courses increased significantly in theareas of knowledge last few years. It results in better qualification of the Brazilian worker. Despite theplaced our country in an modest amount, the government has been investing in science and engineeringinnovation position. courses. Between 1996 and 2003, the number of undergraduate students who concluded their courses increased from 43% and 85%, respectively, totaling 71 thousand new potential scientists and engineers every year for the labor market3. Moreover, the number of masters and doctors that graduate increased considerably in the same period in those two technological areas. In engineering there are 10 thousand new masters and 5.7 thousand new doctors per year, while in science there are 10.3 thousand new masters and 9.5 new doctors every year4.3Data extracted from MEC (Ministry of Education).4Data extracted from CAPES (Coordination for Improvement of University Students).Instituto Inovação Page. 9
  10. 10. Investments in Science and Technology Each year, more resources have been assigned to base research in the universities.Investments in Science The growth in investments is intensive not only from public but also from privateand Technology have sources. Growth rates, in the past five years, are higher then the growth ofgrown consistently. Brazilian GNP, which shows the importance of this sector both to the Government and to the companies. Figure 4:: Growth in Investment in S&T (in R$ millions) 10 % per year Source: General Coordination of Indicators Brazilian Ministry of Science and Technology Law for Innovation, Property Law and Fiscal Incentives The creation and regulation of the Innovation Law has also contributed to promote the environment to innovate and overcome the valley. The law is going toRecent changes in the stimulate innovation in the production sector and promote increase in investmentsregulations have been in S&T by companies. The Union aims at motivating companies to support andstimulating innovation. invest in research activities and technological development by conceding financial, human, material and infra-structure resources. The Innovation Law, amongst many other benefits, brought the possibility for entrepreneur research workers to develop their projects without losing their connection with schools or the research they are working on. Furthermore, if companies carry out technological research and technological innovation development they may automatically benefit from Federal Fiscal Incentives, created since the so called “Good Law”, recovering their expenses with S%T from 54.4% to 68% because of tax reduction. Another benefit brought by the same law is the subsidies that may be conceded when they hire research workers, masters or doctors to perform research activities at companies.Instituto Inovação Page. 10
  11. 11. Examples of initiatives for propagation of Culture of InnovationSeveral initiatives have Knowing about the several actions that contribute to the formation of culture ofbeen contributing for the Innovation in Brazil, we would like to out line some that appear to be morepropagation of culture significant to the relation between the three dimensions mentioned above.of innovation. -Prize for Innovation: More than the financial compensation, the prizes for innovation are great tools to propagate culture and the benefits of innovating. The most immediate reward to participants is the visibility corporations gain to society. As a consequence, companies end up getting internally structured to participate in a more effective way, making the environment for innovation more united. Besides the well-known FINEP (Studies and projects Supporter) Prize of Innovation, many corporations in Brazil institutionalized their own prizes to stimulate innovations. As example, we can mention: ANPROTEC (National Association of Supportive Corporations to Innovative Enterprises), Santander Bank, state agencies to support development and several others connected to private enterprises. -Launch of INOVAR Program (innovate): INOVAR program, by the Federal Government, represented an important step to the construction of a proper environment for innovations in Brazil. Through this program, three main initiatives were taken: i. development of Portal Capital de Risco Brasil (Portal Risk Capital Brazil), which not only displays information about activities of risk capital industries, but also motivates the generation of a community interested in the development of this activity; ii. creation of Fórum Brasil de Capital de Risco (Brazil Forum of Risk Capital), approximating physically the entrepreneur (including technological and academic ones and businesspeople who adventures at new business) and the resources to transform knowledge in value; iii. foundation of the Founds Incubator. Finally, INOVAR program is important for its own development of risk capital industries in our country, through the Founds Incubator. - Portals on Internet: Several portals containing information about innovation context are available online. An example is Mobilizar para Inovar (Mobilizing to innovate) (www.inovar.org.br), which brings information about financing for innovations, successful cases, articles, testimonials, interviews and much more information. We also have Biblioteca Virtual de Inovação Tecnológica (Virtual Library for Technological Innovation), which brings diverse studies, articles and other texts focused on technological innovation and science and technology issues. These portals aim at propagating knowledge associated with the culture of innovation. - Structuring of NITs (Technological Innovation Centers): Innovation Law also states the development of Technological Innovation Centers – NIT – at universities and research institutes. These centers´ mission is to, according to the law itself, look out for the maintenance of the institutional police of stimulating the protection of inventions, registering, innovation and other forms of technology transferring; evaluate and classify results from research activities and projects for the purpose of obeying the law.” Besides that, the NITs are responsible for the process of requiring and maintaining intellectual property titles of IEs. It is also important to mention the foundation of FORTEC (National Forum of Innovation and Technology Transferring Managers), which today has the its second own FORTEC, 86 associated organizations of education and research, of which 50 has NITs in structuring process or operation. Development of Industry for Risk CapitalThe macroeconomic As confirmed by Dr. Evan Koslow, risk investor and Koslow Technologiesenvironment is more Corporation CEO, an American company of technological development, the riskadequate to the capital market is not totally developed not even in the most advanced countries.structuring of risk Brazil has stood out among developing countries in obtaining and investing incapital industries. innovative projects. Between 200 and 2004, more than US$1.9 billion was invested by companies that manage risk capital funds in our country.Instituto Inovação Page. 11
  12. 12. Another indication that our country is increasing its tendency to the risk is the growth in founds obtained in the stock market. Last year, alone, the value invested exceeded R$110 billion, which is more than the double of expenses of the BNDES National Bank for Economic and Social Development in the same year. Despite the founds obtained in the stock market being invested in productive capital, from investors´ point of view, the maturing of the capital market is the first step to the maturing of risk capital market as well. Lager Investment in Innovation by CompaniesBrazilian entrepreneurs Most recent data from PINTEC (Industrial Research of Technological Innovation)5have noticed the show that, as a rule, Brazilian companies are investing more and more inimportance and invested innovation activities. PINTEC 2003 showed that the Secondary Sector in Brazilmore in innovation. invested R$23 billion in innovation activities, while PINTEC 2005 showed that this number raised to R$33,7 billion. Figure 5 :: Evolution of expenditure of the Secondary Sector in Innovation and R&D (in R$ billions) The (new) model of innovation, also known as Open Innovation6, as we will see next, presents a broad range of opportunities to the development of innovations by large or small companies. In spite of the fact that in Brazil most investments in innovation are made by the government, the large companies also play an important role in the development of innovation projects. Industries with less than 50 employees have an innovation rate of 28.9%, while industries with more than 500 employees have an innovation rate of 79.2%. The group of smaller companies invested R$2.9 billion in innovations, while the group of the large companies, R$25.9 billion. Besides Petrobras and Cia. Vale do Rio Doce, Natura, Braskem, Embraco, Embraer among others have been investing resources to approximate to companies at the base of knowledge. These investments of large companies may also result in opportunities to the small and medium ones, either through cooperative projects, acquisition of research and development or through project contracting for future supply.5 PINTEC 2005 – IBGE (Brazilian Institute of Geography and Statistics)6 Term promoted by Henry Chesbrough (2005)Instituto Inovação Page. 12
  13. 13. Figure 6:: Investments in R&D and Index of Innovation in relation to company size Source: PINTEC 2005 – IBGE 5. Companies: driving force behind Innovation As we saw in the last chapter, the environment is favorable for companies toIt is in the companies structure to development of innovations. Innovation, as discussed by severalthat innovation theorists since Schumpeter7, is able to increase competitiveness at companies andmaterializes... guarantee its sustainable growth. In this way, despite the fact that inventions not always happen in companies, innovations are exclusively developed with companies´ participation. Therefore, companies are innovation centers, even involving non-private partners (which is advisable) during the process. Becoming an innovative company is not a matter of luck: it is necessary that the…the first step for it to company adopts innovation as part of its strategy, and like any other strategichappen is having support policy, it has to count on support from senior management, so that it becomesfrom senior reality. It is very common to meet companies that consider themselves asmanagement. innovative, use the word innovation for its mission and advertising campaigns, but do nothing beyond that. There are many companies that are not engaged in making innovation true and also many others that not even know how to, or have difficulties in doing so. The truth is that some decisions that are necessary to the innovative process are also difficult to be made, especially by large companies. Short term incentives, lack of willingness to take risks, ignorance and difficulty in evaluating new technologies potential are some problems that are part of well-known “The Innovator´s Dilemma”, articulated by Christensen (2003).The results from For some time it was believed that only investments in R&D would result ininvestments in R&D are generation of innovations, bringing positive return for the company. What was laterpontentized by well- discovered is that there is no direct relation between these factors8.structured managementprocesses… The most innovative companies are not necessarily those that invest more in R&D, but the ones which excel at management of innovation process.7 SCHUMPETER, J. A. (1949;1984)8 There are several studies in this area. As reference, see Drake, Sakkab, Jonash: Maximizing Return onInnovation Investment (2006).Instituto Inovação Page. 13
  14. 14. The most innovative companies are not necessarily those that invest more in R&D, but the ones which excel at management of innovation process. The dynamics of the formation of an innovative company only starts with the support from senior management. To actually become an innovative company, the concepts of innovation have to be propagated amongst directors and collaborators, resources (human and financial) have to be allocated to innovation activities and a management process have to be implemented to measure its results. Figure 7 :: The dynamics of the formation of an innovative company Source: Instituto Inovação An innovative company is the one that systematically invest in innovation, excels at management processes and takes advantage of supportive resources available. All these factors that lead a company down the innovation path are potentized by interaction with universities, research centers, supportive agencies, investors and business partners. From this whole concept of formation of an innovative company ruled by…and by interaction for interaction, we start to see a great opportunity preconized by the concept ofsharing resources, Oppen Innovation: the generation and utilization of knowledge should not limitknowledge, risks and itself to the companie´s limits. The decreasing (or dilution) of risk and the increaseresults. in development speed are the main reasons for this statement: Long term investments are, generally, riskier than short term investments. In this way, the use of knowledge or thirty party resources to development of innovations may decrease the demand for investments and, consequently, the risk of innovation projects; Access to knowledge or thirty party resources may pontentize knowledge or internal resources, as well as decrease time of innovation projects. Sometimes, what seems to be extremely complex for a company, may be trivial for another or a technological center.Instituto Inovação Page. 14
  15. 15. Figure 8:: Possibilities of Open Innovation Model Source: Henry Chesbrough, 2006. Analisys: Instituto Inovação The Open Innovation may be observed in various ways: from the simple interaction and discussion of ideas and projects; from the licensing of patents; from the development of mutual researches or in partnership with another institution; from the creation of Spin-offs (new companies) in order to accelerate technological development; or from any other way which uses exchange of knowledge with the extern environment to reduce risks, increasing the speed of innovation projects development. In conclusion, this new innovation model brings the following, as the main benefits:  Possibility of leverage with R&D developed with thirds’ investments;  Expansion of reach and capacity for generating new ideas and technologies;  Opportunity of redirecting intern resources for prospecting, triage and implementation management;  Potentiation of the response over R&D investments, by the sub-utilized patents registering.  Wider urgency sense on the ideas or technologies dealing – use them or throw them away;  Possibility of business’ extension and/or diversification, creating new levers for growth.The companies which are Therefore the current context points the necessity of companies and universitiesbetter prepared for structuring to take the opportunity to explore Brazil’s notorious vocation oninteracting with the generating knowledge. It is important that both are organized to establish a longerscience will be the and productive relationship, but we have to highlight that – even for a resource andpioneers in obtaining autonomy issue – they are the most well positioned companies for passing thethis relationship’s good existent obstacles.resultsInstituto Inovação Page. 15
  16. 16. Instituto Inovação Page. 16
  17. 17. WHERES IS THE INNOVATION IN BRAZIL?The study intended to This study’s intent is: show that exist a valley and that, although its existence, thepoint the Brazilian cities environment is disposed to build a bridge over this valley, approximating themost disposed to the science and the market. Thus, from where should the Brazilian companies start tointeraction between the approximate themselves to the knowledge? Where are the opportunities ofacademy and the market partnerships with companies and research centers? Which are the most disposed cities to develop an innovation project involving companies and research centers? 6. The potential for knowledge generation The first published study by Instituto Inovação in 2004 has shown the localities with a great potential for knowledge generation (given by the research workers presence) and, consequently, great potential for the appearance of new inventions, technologies and innovation projects. On this study, there was a small methodological change, including on the city’s results, the results of the mesoregion in which it is inserted. These new results are contemplated on figure 9, detaching the existence of 3 different segments  Economical Centers: Cities with a large number of masters and doctors, resulting from, mainly, these localities population size;  University Centers: Cities with a relative large number of masters and doctors;  Differentiated Economical Centers: Cities that can conjugate quantity and quality in their population formation. Figure 9:: Matrix showing Potential for Knowledge Generation Economic Centers Source : IBGE (Brazilian Institute of Geography and Statistics), 2004. Analysis: Instituto InovaçãoInstituto Inovação Page. 17
  18. 18. In spite of the change on the matrix analysis methodology, a few things hasThe cities where the changed on the last 3 years. Florianopolis, Campinas e Porto Alegre, besideseducation and research Niteroi, keep being the cities with absolute high number of research workers and,public institution are at the same time, a high number of research workers relating to their economicpresent keep being active population.detach regarding thepotential for knowledge The positive surprise in this version of the study is the fact that Brasíliageneration. approximates to specialized economic centers, being placed in the limit that divides this group and the economic centers one. It happens because, contrarily to the other cities, data available about Brasília and its mesoregion Distrito Federal are alike. In this way, when we weight data from Belo Horizonte and Curitiba, for example, with its respective metropolitan areas, we notice higher dilution of the number of masters and doctors than the observed in the national capital. However, it is important to emphasize that for the past 3 years, there have been a great progress of scientific infra-structure in Distrito Federal. Embrapa9, for example, created new research lines and built new laboratories, and it is one of the main attractive for research workers to this area. Moreover, official examinations for governmental posts attracted great number of masters and doctors to conduct researches and development of social, economic and structural policies. 7. Potential for Application of Technological KnowledgeAnalyzing the number of One of the new concepts of this edition of the study is the inclusion of indicator ofpatents registered, we patents registered in Brazil. The company, as mentioned before, is the realtried to measure the responsible for generation of innovations and, so, this indicator becomes speciallyintention of companies important to understand the location of the companies that are generatingto use technological technologies that are possible to be patented, which means, that have exclusiveknowledge. differences, making them potential innovations. Therefore, we draw the matrix showing the potential for technological application of knowledge, where we can also identify the following diverse segments:  Business Centers: cities that have large quantity of patents and low ratio of patents per company;  Industrial Centers: cities that have large quantity of patents per company and low absolute number of patents;  Specialized Industrial Centers: cities that have large quantity of patents and high ratio of patents per company.9 Brazilian Enterprise for Farm and Cattle Raising Research)Instituto Inovação Page. 18
  19. 19. The level ofindustrialization of citiescontributes to more generation Figure 10:: Matrix showing Potential for Application ofof patents. Technological Knowledge Business Centers Source: INPI (National Institute of Industrial Property) , IBGE (Brazilian Institute of Geography and Statistics) , 2004. Analysis: Instituto Inovação The 140 biggest “patenting” cities in Brazil are responsible for gathering more than 60 thousand registers of patents in the past 10 years, according to dada from INPI (National Institute of Industrial Property). Not surprisingly, the largest cities of the country, like São Paulo and Rio de Janeiro, have the highest absolute number of patents. However, some surprises are brought up to the discussion about the most innovative cities in Brazil. Caxias do Sul (RS), Joinville (SC) and Franca (SP) have not only high number of patents but also high number of patent per company. One of the factors that help explain this high relative index is the profile of the companies located in these cities. They belong to the group in which industries represent the largest part in number of enterprise registers. 20% of the total of companies in Caxias do Sul (approximately 27 thousand, according to IBGE) are industries. In Joinville (22.5 thousand) the number of industries represents around 13%, finally, Franca (approximately 17 companies) has 28% of industries, of all registered companies. Industries, as we expected, are the biggest “patenting” enterprises in relation to commerce or services.Instituto Inovação Page. 19
  20. 20. Figure 11:: More Industrialized cities (% of industries) Caxias do Sul (RS) has a very diversified industry. It is one of the most important metal-mechanic centers in Brazil, has strong influence in the arm sector, petrol- chemist sector, automotive industry, agricultural components industry, among others. Another important factor that contributes to the technological development of the area is the technological colleges that, despite not making basic research, are quite influent in the development of workers´ qualification. Joinville has one of the most modern industrial parks in Brazil and infra-structure of services compatible to industry needs. The city has several Brazilian and foreign multinationals, companies that are generally directed to innovation culture. Embarco and Tigre, companies located in Joinville, for example, are great national “patenting” companies. Other companies in the region that need to be mentioned are Multibrás, Busscar, Docol and Termotécnica, which also contribute to the high number of patents in the region. To supply the industrial park, Joinville also has many specialized technical schools that have high technological level. Finally, industrial communities contribute for sharing of ideas amongst companies and, consequently, development of innovations. Franca (SP) is one of the largest producer centers of shoe and leather products. This city also has both qualified university and important technological center. The Institute of Technological Research of São Paulo (IPT) has a Leather and Shoe Laboratory in the city, responsible for technological propagation among the companies in the region. Analyzing figure 8 we can also notice some important groups of cities distributedThe cities of the state of among the cities considered industrial centers, with great quantity of patents perSão Paulo and Rio de company (relative index of patents). It is notorious the concentration of cities ofJaneiro are very the state of São Paulo and Rio Grande do Sul. Blumenau (SC), Contagem (MG) andimportant regarding Londrina (PR) are exceptions, because they are important industrial centers topotential to application theirs respective states and to the country. For example, Blumenau and Contagemof technological are on the list of the cities which higher relative number of industry registers inknowledge. relation to the total of companies, with 16% and 13%, respectively. In the state of São Paulo we notice the presence of two groups: on one hand, there is strong industrial activity due to the proximity to the capital, where Santo André and Osasco are located; on the other hand, there are cities that unite industrial development with strong academic presence, like São Carlos, Sorocaba, Marília and Bauru.Instituto Inovação Page. 20
  21. 21. The group of business centers is formed by Rio de Janeiro city, Porto Alegre and Brasília. These cities are characterized by the small concentration of industries in relation to the total number of companies. Logically, they are very diversified business centers, with great emphasis on services and commerce. In Brasília, for example, only 4% of the enterprise registers are industries. Porto Alegre has 6% and Rio de Janeiro city has 5%. The national capital, however, is an interesting case. In spite of having high relative number of research workers in relation to economic active population, these research workers settle, generally, in non-technological research centers, like, for example, public policies centers. Unlike most places in Brazil, where it is expected that most research workers take over positions in educational centers, data from CAPES and IBGE show that only 30% of them work in university centers of this region. Considering patents, Rio de Janeiro city is a peculiar case. The city has low relative number of patents, despite having a high absolute number. The fact that Petrobras, one of the biggest “patenting” national companies, is located there helps explain it. This Brazilian multinational is responsible for a large part of patents of Rio de Janeiro city. 8. Potential for Interaction in Generation of Technological Innovations For the final analysis of this study, we gathered in one matrix the indicators of potential for knowledge generation and of potential for application of technological knowledge. Axis x shows a weighted mean of indicators of research workers, while axis y shows a weighted mean of indicators of patents. We were driven to evaluate this gathering by the hypothesis that in the regionsCampinas is a great with high number of patents and high number of research workers, the probabilityexample of a city that to happen innovations is bigger than in the regions with lower number of researchgathers every workers and patents. It also tends to be bigger the probability of strongcharacteristic for interactions between research centers and companies. Campinas is a typicalacademic knowledge to example of this scene. State University of Campinas (Unicamp), Center of Researchbe applied, resulting in and Development in Telecommunications (CPqD) and other research institutionsbenefits to society. located in the city have great interaction with local, national and multinational companies. The example of Unicamp has special value to other educational institutions, because it is the university that has been showing most significant results in transferring technology so that companies explore its market potential. In addition to being the only city to be present in quadrant 1 of all graphics in this study, Campinas is also considered reference in innovation for most studies that mention the interaction between research centers and companies in this region.Instituto Inovação Page. 21
  22. 22. Figure 12:: Matrix showing Technological Application of Knowledge x Potential for Generation of Knowledge Elaboration: Instituto Inovação In figure 12 we can notice that, except for Brasília, no other city outside South and Southeast regions are in areas of great potential for interaction in generation of technological innovations. An analysis aiming at relating distribution of companies in these quadrants with GNP per capita of the city in relation to Brazil, and with HDI of these cities in relation the HDI of Brazil, we can conclude: There is a strong positive correlation between the companies distributed in the quadrants and the average HDI for the companies in these quadrants. The cities located in the quadrant of greater potential for interaction in generation of technological innovations show, generally, a higher HDI than cities in other quadrants. The same observation was made to GNP/capita.Instituto Inovação Page. 22
  23. 23. Figure 13:: HDI-M and Index of GDP/Capita Elaboration: Instituto Inovação Finally, it is important to point out that the additional analysis showed that GNPCities that are per capita is more correlated with city indicators of patents, while HDI shows apotentially more better correlation with the number of research workers. These data accords withinnovative show better several research workers in innovation and suggest that economic centers are thesocio-economic most likely ones to generate patents and profit, while educational centers haveconditions. bigger possibility to generate social well-being around it. It is also important to reaffirm neither industries nor universities isolated are able to raise a city´s GNP or HDI. Other institutions, like public agencies, consultancy services, institutions of basic education and health, service and infra-structure companies, among others, are fundamental for the development and consolidation of a innovative environment.Instituto Inovação Page. 23
  24. 24. CONCLUSIONS The analysis included in this study does not exhaust, or intent to exhaust, the discussion about what the most innovative cities in Brazil are. This mapping represents just a small part of the several indicators used to measure innovation. Studies based on secondary data are not capable of showing the specifications of each city and, consequently, identify the real capacities to generation of innovations. It would be recommended a deeper analysis of institutions, companies, economic and infra-structure conditions, etc. in each of the more than 5 thousand Brazilian cities. That would be a mistake if we forgot to affirm that technological innovations also happen in the absence of research workers and patents. Some industries, for example, aeronautic industry, do not make registration of patent of all their technologies. Some of them are kept as industrial secrets. Beyond patents and research workers, for innovation to happen, we need capable entrepreneurs committed to their projects. However, it is a fact that a place with higher number of patents and research workers is more likely to develop projects of great economic and social impact, more than regions which do not have research workers and new technology companies. Studies like “Where is the Innovation in Brazil?” generalizes a problem and put it forward to public discussion in a simplified way. It is interesting to emphasize that the collecting of data to base this study was more difficult than usually, once there is not constant updating of several indicators, which would allow us to investigate correlations deeper. Having said that, some reflections are brought up: How is the structure of science and technology in certain regions effecting local and national development? How is the supportive structure organized to potentize innovations generated or how to use it as a way to stimulate innovation? How to establish public policies suitable to each “group of cities” following this study’s perspective? (For example: is it possible to strengthen research centers in Caxias do Sul (RS), while stimulating economic gain of Viçosa (MG)? When recognizing that an area, city or company is not innovative, which references do we have to take into consideration? Having Brazilian entrepreneurs willing to innovate, structuring of the environment and of the innovative process will significantly contribute to a great technological leverage in Brazil. To provide means for discussion of this and other issues relatad to innovation management in Brazil, Instituto ! Inovação open its blog for articles, comments and contributions of readers of this article. Join us, go to blog.institutoinovacao.com.brInstituto Inovação Page. 24
  25. 25. AUTHORSBruno Moreira got a degree in Megatronics from the Pontific Catholic University of the state of Minas Gerais (PUC Minas). Hedid work in Marketing at the Higher Scholl of Advertising and Marketing (ESPM) and is the director of Instituto Inovação inCampinas. At Instituto Inovação, he was responsible for the elaboration of a study on nanotechnology and for thecoordination of the present study. He is also involved in the management of projects of mapping, investigation anddevelopment of new business of technological base with private enterprise, institutions of R&D and universities from thestate of São Paulo.Gustavo Mamão got a degree in business administration from the Federal University of the state of Minas Gerais (UFMG). Heis the director of Instituto Inovação in Belo Horizonte – MG. At Instituto Inovação, he was the author of some studies, such asthe first version of “Where is the innovation in Brazil?”. He also managed projects of mapping technologies and definingstrategies of R&D to large companies. He was responsible for the evaluation of more than 60 technologies developed inBrazilian research centers. Moreover, he lead the development of methodologies utilized by Instituto Inovação, such as theDiligence of InnovationTM.Euler Santos got a degree in Economics from the Federal University of the state of Minas Gerais (UFMG). He is also a graduatestudent of Management of Innovation at Erasmus University Rotterdam (Netherlands) and a consultant for innovation processand management of start-up of technological base. At Instituto Inovação he was the author of various studies, such as thefirst version of “Where is the innovation in Brazil?”. Moreover, he took part in projects to the stimulation of innovationsincluding more than 50 companies in Minas Gerais. Furthermore, he managed Verti Ecotecnologias, a partner of InstitutoInovação.Guilherme Pereira is the analist of Instituto Inovação and an undergraduate student of Economics at Pontific CatholicUniversity of Campinas (PUC-Campinas) and also an undergraduate student of Medical Physics at UNICAMP. He was thefounder-president of the Center of Junior Companies of Unicamp. At Instituto Inovação, he worked with mapping andinvestigation of technologies, elaboration of business plans for technological base. He also involved with working outpartnerships between universities and companies and the methodology of Diligence of Innovation TM.BIBLIOGRAPHICAL REFERENCES 1. BOWER, J. L.; CHRISTENSEN, C. M. Disruptive Technologies: Catching the Wave. HBS Press: 1995. 2. BRESCHI, S. & MALERBA, F. The geography of innovation and economic clustering: some introductory notes. Industrial and Corporate Change, v. 10, n.4, p. 817-833, 2001. 3. BROOKS, Harvey, “The Relationship between science and technology”, Research Policy, 23 (1994). 4. CHESBROUGH, H. W. Open Innovation: The new imperative for creating and profiting from technology. HBS Press, 2005. 5. CHRISTENSEN, C. M. The Innovator’s dilemma. Collins, 2003. 6. CIA (2005), World Factbook. 7. DRAKE, M., SAKKAB, N. & JONASH, R. Maximizing Return on Innovation Investment. Research Technology Management, 2006, pp 32-41. 8. DTI (2003) Innovation report – competing in the global economy: the innovation challenge. December 2003. 9. GUEDES, T. Networks of innovation and science and technology policy. Draft. Seminário PGT-USP, 1999. 10. Goldman Sachs (2003), “Dreaming with BRICs: The Path to 2050” 11. IBGE (2005), Pesquisa de Inovação Tecnológica – PINTEC 2005. 12. INPI (2007), tabulação especial. 13. Institute for Scientific Information (2004), Nacional Science Indicators, Coordenação-Geral de Indicadores - Ministério da Ciência e Tecnologia, Brasília. 14. OECD (2004), Science and Innovation Policy – Key challenges and opportunities. OECD, Paris 2004. 15. SCHUMPETER, J. A. The historical approach to the analysis of business cycles. 1949 16. SCHUMPETER, J. A. Capitalismo, socialismo e democracia. Rio de Janeiro: Zahar, 1984. 17. TULDER, R. Erasmus University Rotterdam. Locomotive Final Conference, Junho, 2007. Acessado: http://locomotive-project.org/cms/?page=HOME em 22 de Agosto de 2007. 18. UTTERBACK, J. Dominando a dinâmica da inovação. Rio de Janeiro: Qualitymark, 1996.Instituto Inovação Page. 25
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