Fernando Alcoforado *
Scientific and technological progress...
long-term sustainable companies. Innovation means in brief novelty. The word refers to
an idea, method or object that is c...
innovation in Brazil grew slightly in 2011 compared to 2010. According to the survey,
just over 10% of new businesses in t...
Cow and Milk), posted on the website <
activities: 1) research and development of processes or products focused on innovation
and; 2) provide metrology services,...
Upcoming SlideShare
Loading in …5

The weaknesses of brazil in science, technology and innovation


Published on

Published in: News & Politics
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The weaknesses of brazil in science, technology and innovation

  1. 1. THE WEAKNESSES OF BRAZIL IN SCIENCE, TECHNOLOGY AND INNOVATION Fernando Alcoforado * Scientific and technological progress has, commonly, as an indicator of their advance the number of patents registered. However, the true measure of scientific and technological progress should consider increased productivity provided by a product / service, the low cost of acquiring goods and services, the responsiveness and adaptability to changes of the product or service, the durability of product / service or their duration in time, the technical characteristics of the product / service to ensure its effectiveness, the physical security of persons and users in relation to the goods / services, the performance of the product / service to the customer and / or company (do the right thing by the right way) and compliance with ethical rules, regulations, laws and codes of conduct. These indicators assess whether the scientific and technological advances contribute to or for the welfare of humanity. The existence of an effective system of science, technology and innovation is a key factor in promoting economic and social development and environmental sustainability of a country or a region. According to Joseph Schumpeter (The theory of economic development. USA: Newbrunswich / London VK, Transation Publishers, 2000), the development process is identified with the creation of innovations. For Schumpeter, the development is to use resources in a different way, in doing new things with them. For Schumpeter, the growth is not development, but the accumulation of factors of production (land, capital, labor). On the other hand, innovation relates to new tools, new ways of organizing productive activity that will allow the optimization of human efforts and provide increased productivity and capital accumulation in the agricultural, industrial and service sectors. In this sense, the system of science, technology and innovation should contribute to the promotion and development of innovation of processes and products to promote the development of a country or region. The word innovation was introduced by Austrian economist Joseph Schumpeter in his book Business Cycles published in 1939. According to Schumpeter, the economies emerge from a state of balance and enter into a process of expanding with the emergence of some innovation that from the economic point of view, considerably change the previous equilibrium conditions. In another of his works Capitalism, Socialism and Democracy, published in 1942, Schumpeter describes the process of innovation as creative destruction. Examples of innovations that change the state of equilibrium in the economic environment we are introducing a new product or service in the market, the discovery of a new method of production or supply of goods, the conquest of new sources of raw materials, and finally, changes to the structure of the current market, such as breaking a monopoly. The introduction of an innovation in the economic system is called by Schumpeter entrepreneurial act, carried out by the entrepreneur, in order to obtain a profit. In capitalism, a company to succeed must be competitive. Competitiveness and innovation are closely linked, so then it is of interest of a company to be innovative to increase their competitive power. The business environment leaves us today to be local to be global with the integration of world market, and only the strongest survive. Corporate management must have the ability to create competitive advantages, not only unique, but also difficult to replication by competitors. The innovation under competition or strategy creates a new world of opportunities, which leads them to be 1
  2. 2. long-term sustainable companies. Innovation means in brief novelty. The word refers to an idea, method or object that is created and that bears little resemblance to previous standards. Today, the word innovation is invention that comes on the market. Innovation can be defined as doing more with less resources, by allowing efficiencies in processes, whether productive or administrative or financial, or in the provision of services. Innovation when creates increases in competitiveness can be considered a key factor in the economic growth of a society. Types of innovations are the following: a) Product innovation: market introduction of new or improved products or services. Includes significant changes in technical specifications, components, materials, incorporated software, user interface or other functional characteristics; b) Innovation Process: implementation of new or improved production processes and logistics of goods or services. Includes significant changes in techniques, equipment, or software; c) Organizational innovation: implementation of new organizational method in business practices, work organization and / or external relations, and d) Innovation marketing: implementation of new marketing methods, involving significant improvements in product design or packaging, pricing, distribution and promotion. Innovation can occur either through a perfectly planned action as by mere chance. However, in practice it appears that few innovations occur by chance. Most innovations, in particular the most successful, are the result of a conscious, purposeful search for innovation opportunities, inside and outside the company. Innovation is key, because through it organizations become capable of generating continuous wealth and thus to remain or become competitive in their markets. However, in most cases, companies use competitors as a benchmark for their own innovation initiatives. Thus, the competitive strategies tend to be very similar within the same market and only company that deviates from the competitive group of companies can fulfill its role of increasing competitiveness and consequent generation of wealth. Innovations can be classified into two major groups: a) Radical Innovation or Break. This type of innovation is characterized by the relentless pursuit by the organization that carries out, rupture and break paradigms; and, b) Incremental Innovation and Innovation for Continuous Improvement Process is characterized by a constant search for improvement and gradual. As a rule, well-managed companies are excellent in the development of incremental technologies. Survey of over 2,700 American, European and Asian companies conducted by Boston Consulting Group (BCG) has captured the growth strategies amid the global crisis of 2008. Most entrepreneurs reaffirmed that innovation remains a strategic priority. Moreover, despite the unfavorable economic environment, most respondents intends to increase spending on innovation. At stake is the understanding that innovation is not used occasionally to improve positioning of a company in the market. For these companies, innovation is the result of an ongoing process to increase and sustain its competitiveness and ensure its survival in the market. The BCG study highlighted that the most agile companies increased their commitment to innovation as a way to cope with slowing demand and raise the degree of rationalization of investment. It is always good to remember that leading companies like Apple, Nokia, Microsoft, Google and Samsung were born, grew and globalized its business in times when conditions were not favorable. The latest version of the Global Entrepreneurship Monitor (GEM) report that informs about that maps the level of entrepreneurship in the world, shows that the level of 2
  3. 3. innovation in Brazil grew slightly in 2011 compared to 2010. According to the survey, just over 10% of new businesses in the country bring to market truly innovative products and services, which places Brazil at the same level of Trinidad & Tobago and ahead of only Bangladesh, where the rate is 10 %. In 2011, Brazil came in last place, with less than 10% of innovative businesses [See the article by Ligia Aguilhar entitled Brasil continua sendo um dos países menos inovadores do mundo (Brazil remains one of the least innovative countries in the world) posted on the website <>]. Adriano Benayon, PhD in Economics from the University of Hamburg, states that "it is ridiculous to talk of technological innovation with the denationalized industry and with centers of decisions on production and markets located abroad", as is the case of Brazilian industry [See Article Por que o Brasil se atrasa (Why Brazil lags) posted on the website <>]. Benayon adds that "if there is no technological innovation in Brazil is because transnational appropriated technologies abroad recouped them with sales in other markets and use here the actual zero cost, as with machines and equipment imported inflated prices". Benayon also states in the same article that "if the industry is not really national, never have a chance to be competitive". In Article Desnacionalização acelerada na indústria brasileira (Accelerated Denationalization in Brazilian industry), authored by Carlos Lessa, Professor of Economics Brazilian of UFRJ Institute of Economics and former president of the National Bank for Economic and Social Development (BNDES), posted on the website <http:// > is explicit that foreign affiliates control 82% of the science-based industry sector, 73% of the differentiated, and 68% of continuous production. It is especially disturbing progression of the foreign company in the industry intensive in natural resources. Accordingly, the presence of branches increased from 15 % in 1985 to 24% in 2002. This table reported by Carlos Lessa has not changed with the rise of PT power in Brazil in 2002 . The dependence of the Brazilian industry is not only capital, but also of foreign technology. Brazil ranks 43 in the world ranking technology United Nations, which directly affects the performance of the industrial country. The Brazilian situation is disadvantageous because, while the United States, for example, has 800 thousand scientists working in research and development of which 81% are in companies, 4% in government and 15% in higher education institutions, Brazil has only 137 thousand scientists of which 65% of researchers in universities, 27% in companies and 8% in government. These figures show that, unlike the United States, the contribution of companies in R & D in Brazil is very small. The subordination of Brazil to international capital in the industrial sector and other sectors of the Brazilian economy explains why he is among the last countries placed on innovation and because the companies located here contribute little to the development of Research and Development (R & D). It is not enough to put in one place scientists, engineers and students in good number, researching together basic phenomena of nature, with laboratories, workshops and well equipped for the generation of innovation and technology libraries, as suggested by Ivan Oliveira, senior researcher and coordinator of graduate studies at the Brazilian Center for Physics Research, in his article Ciência, Tecnologia, Inovação, Vaca e Leite (Science, Technology, Innovation, 3
  4. 4. Cow and Milk), posted on the website <>. First of all, it is necessary to break the subordination of Brazil in relation to international capital to the Brazilian university and national companies together contribute to effective scientific and technological development of the country. During the Lula da Silva and Dilma Rousseff government, there was no change in the subordination of Brazil to international finance capital nor decreased the domination of international monopolies on the Brazilian economy. Rather, there was an amazing process of deindustrialization and denationalization of the Brazilian economy. In the 1980s, the share of manufacturing in gross domestic product (GDP) was 33 % and today is only 16%. According to the report FIESP (Federation of Industry of São Paulo) March 2011, the export of manufactured goods fell from 58% in 2006 to 38% of the total in 2011. For the first time since 1978, the export of commodities surpassed the export of manufactured goods. The denationalization of the Brazilian economy is still evident when one notes that of the 50 largest Brazilian companies, 26 are foreign. More than half of Brazil's leadingedge sectors such as automotive, aerospace, electronics, information technology, pharmaceutical, telecommunications, agribusiness and mining companies are in the hands of foreign capital. Foreign capital is present in 17,605 Brazilian companies that account for 63 % of Gross Domestic Product (GDP), and has control of 36% of the banking sector and has 25% of Bradesco shares and 20% of the shares of the Bank of Brazil. The foreign capital owns more than 30% of hectares of land in the country to produce sugar cane, cattle and soybeans. Only in the biofuels industry, multinationals hold 33% of all lands and mills [See the article of Lula Falcão entitled Crescimento capitalista aumenta submissão do Brasil ao capital estrangeiro (Capitalist growth increases submission of Brazil to foreign capital) posted on the website <>]. By Decree No. 7,540, of August 2, 2011, the Brazilian government established the Plano Brasil Maior (Greater Brazil Plan- PBM) under which established its industrial, technological, exterior trade and services policy for the period 2011-2014. For the Brazilian government, the PBM, focused on stimulating innovation and domestic production to boost the competitiveness of industry in domestic and foreign markets, is organized to the country take bolder steps towards economic and social development. The Greater Brazil Plan aims to: 1) promote innovation and technological development; 2) create and strengthen critical skills of the national economy; 3) increase the productive and technological densification of value chains; 4) expand domestic and foreign markets for Brazilian companies; and, 5) ensuring a socially inclusive and environmentally sustainable growth. These five objectives were not achieved because the PBM was prepared without reference as a national development plan which, incidentally, does not exist in Brazil. In addition, the Greater Brazil Plan could only be successful if they were prepared sectoral plans (foreign trade, agriculture, logistics, energy, education, health, sanitation, housing, etc.) and formulated fiscal and monetary policies matched each other, a fact that is not contemplated by governmental action. Besides the Greater Brazil Plan, the Brazilian government created by Decree No. 6,259 of 20/11/2007, the Brazilian SIBRATEC - System Technology which aims to support the technological development of the national business sector through the promotion of 4
  5. 5. activities: 1) research and development of processes or products focused on innovation and; 2) provide metrology services, extension, assistance and transfer of technology. The promotion of the planned activities must be in line with the priorities of the industrial, technological and foreign trade policies of the federal government and aim to increase the competitiveness of the Brazilian company. The SIBRATEC is being formed by institutions of the national system of innovation with operational competence. The entities comprising the SIBRATEC are being organized in the form of networks, which can be thematic, as the priorities of the industrial, technological and foreign trade and, when appropriate, to better meet the business demands policies can be organized into regional networks aiming performance in at least one of the following activities: 1) research, development and innovation process and product; 2) provision of technological services; and 3) extension or technological assistance. Despite the efforts of the Brazilian government to create the Greater Brazil Plan and SIBRATEC, the results have not been satisfactory in the development of science, technology and innovation by not having an industrial policy point effective solutions aimed at permanently reducing costs production industry in Brazil against Asian countries, especially China, which can only occur in four ways: (1) reducing the “Brazil Cost” with falling tax burden and improving logistics infrastructure in Brazil; (2) increase the productivity of the industry with the increase of its levels of efficiency and effectiveness and strengthen their supply chains; (3) depreciation of the real intake restriction with dollars or the adoption of a fixed exchange rate; and. (4) selective and permanent relief industry by reducing the tax burden on her incident. These solutions should be complemented by the adoption of measures aimed at: 1) overcoming the huge problems of education in Brazil at all levels with the objective of increasing the "critical mass" of the country; 2) the development of knowledge resources by adopting programs for implementation of R & D centers, strengthening of universities, technology acquisition and attracting brains from abroad; 3) the appropriate allocation of infrastructure resources establishing effective programs to eliminate existing logistical bottlenecks; 4) fostering the links between supply chains of companies and their suppliers by eliminating loopholes; and, 5) combating predatory imported products with the restriction or limitation of entry into the domestic market. Without the adoption of these measures, the crash of large industrial sectors, deindustrialization and denationalization of the Brazilian economy may occur. * Alcoforado, Fernando, engineer and doctor of Territorial Planning and Regional Development from the University of Barcelona, a university professor and consultant in strategic planning, business planning, regional planning and planning of energy systems, is the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011) and Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), among others. 5