Evolution of ST&I Policies in Brazil Presentation for DEIP Course_UNU-MERIT/2008

1. DEIP – UNU/MERIT Maastricht, 11/10-14/2008 Scientific and Technological (S&T) Policy and Industrial Development in Brazil Alessandro Maia Pinheiro (UFRJ;IBGE)

6. 1990-2002 Stabilization - Liberalizing Policies Liberalizing ideas strongly supported elaboration and implementation of a set of industrial policy measures named General Guidelines for Industrial and Foreign Trade Policy (PICE). The intention was essentially to follow a schedule of elimination of goods entry barriers. Tariff reduction was one of the most relevant changes. In four years, the average rate was lowered from 32% to 13%. Other measures: privatization, deregulation and attempts to attract foreign direct investment Domestic firms under pressure Process of productive restructuring Industrial unemployment Macroeconomic policy in the context of the Real Plan (1994) was not conducive to industrial development Very high interest rates Very high taxation Local currency appreciation

12. 3. Brazilian indicators Figure 1 – Per Capita Real GDP at market prices (constant 1990 US$ dollars, estimated from PPP calculations), 1950-2002, Selected Countries Source: Viotti, 2006. BRAZIL WAS CLEARLY ON AN UPWARD TREND FROM 1950 TO 1980

14. As said before, productive restructuration has been mainly concentrated on defensive strategies, involving labor costs reduction along with acquisition of machinery and equipments. The later has been specially induced by exchange appreciation from the mid-1990’s.

15. SHARP INCREASE IN THE NUMBER OF BRAZILIAN PHD’s FROM 1990 Figure 5 – Number of domestic Brazilian PhD’s and proportion in relation to USA PhD’s Sources: NSF, USA; MCT, Brazil.

16. Weaknesses concerning flows of information and knowledge Lack of technological competences + Difficulties to solve technology-related problems Innovation concentrated on embodied technology GENERAL PROFILE OF THE BRAZILIAN INNOVATION PROCESS – ACTIVE TECHNOLOGICAL LEARNING MUST BE THE MAIN TARGET, INCLUDING SUPPLY OF LEARNING INDICATORS

17. 3. CONCLUDING REMARKS S&T policy has been successful in providing human resources for research; With respect to its main aim, it failed given that it’s been unable to foster a meaningful innovation process; Its main challenge still remains: to make firms and S&T system interact; Another issue concerns the mismatch between macroeconomic policy and innovation policy; We have enough institutions; however there are coordination and cooperation failures; Once innovation (in a restrictive sense) is not the fundamental mark of the Brazilian industrial dynamics, innovation policy should pay more attention to learning processes, broad and informal innovation activities and underlying firms’ strategies; Institutions in charge of producing statistics concerning innovation should do the same.

18. Many thanks! [email_address] [email_address]