Hugo Borelli Resende presented on open innovation initiatives in Brazil at an Embraer event. Embraer follows a staged R&D model moving from basic research to applied research to advanced technology development and validation before product development. Embraer has partnerships globally including in the US, Europe, China and Singapore and has over 3,800 engineers. Embraer develops commercial, executive and defense aircraft simultaneously and its revenues have grown significantly since the late 1990s as exports account for over 96% of its business.

1. 16 de junho de 2008 – São Paulo/SP
Hugo Borelli Resende
Embraer
Mesa 1 - Iniciativas de Open Innovation no Brasil
Pannel 1 - Open Innovation iniciatives in Brazil
Open Innovation Seminar 2008 – Allagi

2. Building a Globally
Competitive
Company
Hugo B. Resende
Chief Scientist, Technology Development
June, 2008

3. R&D Model (Civil Aircraft Industry)
Pre-Competitive R&D Product Development
Emerging Technologies
Advanced Technology Development
Validation
Demonstrator
Universities
Product Definition Prototype
Research Institue Product Detailed Design
Product Certification
Industry Research
Production
-10 -5 0 anos +5
Basic Applied Viability of Product/Process/
Research Research Advanced Specific Technology
Technologies Development

4. Aerospace Industry Fundamentals
SUCCESSFUL
BUSINESS
High Qualified Global Cash Flexibility
Technology People Presence Intensiveness
Customer Satisfaction
Backbone of our entrepreneurial action

5. Global Business
Operations in Brazil, United States, Europe and Asia
France
USA Villepinte
Le Bourget
Nashville
Fort Lauderdale
China
Beijing
Portugal Harbin
Alverca
Singapore
Brazil Singapore
Gavião Peixoto
Botucatu
São José dos Campos

6. Flexibility – Partnership
• 4 partners • 16 partners
• 350 suppliers • 22 suppliers

7. High Technology
Virtual Reality Center
In operation since Feb 2000
• Fluid Dynamics
Ergonomics
Analysis
• Composite Materials

8. Research & Technology Strategy
The four Organizational dimensions for the innovation process of
high-complexity products:
What the firm Customer's
wants Needs
Corporate Markets
Market
Strategy What the Market Unts
firm will do Opportunities
New
Technology Products
Planning Concepts
Vision of the Technology
Future in S&T
Development
Portfolio
Research & Technologies
Conceptual
Technology Studies & Design

9. Qualified People
Educational Levels*
High School
70 %
Ph.D.
2%
Postgraduate
4% Graduate
24%
Minimum educational level – High School
04/31/08
* Brazil Units

10. Qualified People
Engineering Manpower Growth
4500
4000 3838
3626
3500 3278
2941
3000
2713
2543
People
2500
2195
2000
1546
1500
1119
1000 846
658
550
500
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year

11. Executive Jet
Market

12. Legacy

13. Legacy 500

14. Simultaneous Development
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
EMBRAER 170
Commercial
EMBRAER 175
Executive
EMBRAER 190 Defense
EMBRAER 195
LEGACY 600
PHENOM 100
LINEAGE 1000
PHENOM 300
MSJ/MLJ
AEW
ALX
SUPER TUCANO COLOMBIA
AiM

15. Financial
Data

16. Capital Structure
Common (Voting) Shares: 740,465,044 (100%)
Thornburg
Oppenheime
Investment
União Fund´s
5,2
0,3% 6,9%
BNDESPAR NYSE Others
BOVESPA 5,2% 31,8%
46%
NYSE Grupo
54% Bozano
9,8%
PREVI Janus
14,2% Capital
BOVESPA 10,3%
Others
16,3%
May 7th, 2008

17. Net Revenue (U.S. GAAP)
(US$ million)
Actual
Forecast 5,245
3,830 3,760
3,441
2,762 2,927
2,526
2,144
1,837
1,354 1,335
764
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1T2008
• 96.4% of revenue is exports

18. Exports
(US$ million) 4,737
3,348 3,267 3,269
2,897 2,957
2,702
2,396
2,213
1,843 2,007 1,992
1,737 1,780
1,692
1,377 1,220 1,302 1,529
1,173 1,178 1,325 1,356
1,054 1,175 1,056
881
705
514 342420
292
-79
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 feb/08
Export Import Trade Balance
Embraer accounted for 2.3% of Brazilian exports through February 2008.
(*)Source: Foreign Trade Department Secretary.

19. Thank you!