Research points out paths to Brazil’s economic transformation through technological capacity

A study carried out over several decades gave rise to a new book that maps out the challenges preventing the country from developing technologically.
Economics
22 March 2024
Research points out paths to Brazil’s economic transformation through technological capacity

Brazil has increased its spending on research and development in recent times, reaching 1.3% of GDP in the past decade – higher than the rates seen in some wealthier countries that are members of the Organization for Economic Cooperation and Development (OECD). However, these investments have not led to a noticeable increase in innovation in Brazil, given that despite growth in the number of doctorates and scientific publications, the average increase in patent registrations by Brazilians over the last 20 years has been less than 1%. It is in this controversial context that Fundação Getulio Vargas’ Brazilian School of Public and Business Administration carried out a study.

The study led to a book called “Capacidade tecnológica e inovação: desafios para a transição industrial e econômica do Brasil” (“Technological capacity and innovation: Challenges for Brazil’s industrial and economic transition.”Researcher Paulo Negreiros Figueiredo, who led the study, highlights some of Brazil’s inconsistencies in terms of its efforts in science, technology and innovation.

“More than 50% of R&D investments in Brazil are concentrated in basic research in the public sector, while in OECD countries, the private sector accountsfor more 60% of national R&D spending on average. In China and South Korea, for example, this proportion is 70%. Therefore, contrary to common sense, it is not a question of Brazil’s low investment in science, technology and innovation, but of ineffective investment,” the researcher warns.

Challenges involved in increasing Brazil’s innovation rate

In this context, the vast majority of Brazilian companies that do innovate only make small adaptations and creative imitations, rather than making substantial changes to existing technologies or producing their own technologies. However, according to Figueiredo, if companies with a low level of innovation were properly encouraged and supported, they could evolve to levels of innovation that would add more value to the country’s economy.

“It’s important for companies to identify their level of innovation capacity, because a passive user of technology is unlikely to be able to evolve in an international context, while a company that develops significant technological innovation capacities has a better chance of gaining a competitive position in international markets,”says the researcher. He notes that the book may help managers assess their level of technological innovation capacity and design their innovation strategies.

Since the turn of the century, the Brazilian government has produced various public policies aimed at science, technology and innovation, contributing to the construction of a national infrastructure related to innovation. However, as the study points out, this system falls far short of what has been achieved in technologically and scientifically developed economies, as well as other emerging or middle-income economies. Figueiredo believes that instead of merely increasing investments in R&D, it would be wiser to prioritize increasing the effectiveness of existing investments.

“If Brazil does not increase its rate of innovation in a consistent and sustained manner, the country will most likely continue to undermine its transition to higher levels of industrial and socioeconomic development. In addition, structural difficulties also hinder Brazil on the road to innovation, as it is very common for three or four companies to dominate each industry, and this ends up inhibiting competition – an important factor for innovation. As Brazil suffers from this lack of competition in different sectors, there is a disincentive to innovate,” he says.

The researcher also points out that it is necessary to make the most of Brazil’s “critical mass” of professionals and researchers, who are often restricted to academia or move to other countries because they don’t have the means to develop in Brazil.

“This situation makes it difficult to transform knowledge into relevant products and services to position Brazil competitivelyon the global stage,” Figueiredo points out.

Ways to promote innovation in Brazil

The study also points out practical ways and recommendations to guide public policies that could help Brazil effectively carry out an industrial and economic transformation. Among these, Figueiredo stresses the need for the private sector to take the lead in R&D spending in Brazil.

“Brazil has a long history of carrying out basic research at universities and directing the solutions created so that companies benefit, but when the system works in this way, this research ends up disconnected from the demands of society, and the development of concrete solutions to the population’s challenges becomes limited,” Figueiredo explains.

The researcher also points out that public policies need to be aimed at boosting and integrating the science, technology and innovation system, fostering dialogue between the public, private and academic sectors. According to Figueiredo, this integration has a positive impact on socioeconomic development, with effects on income levels, infrastructure and the well-being of the population.

“Brazil’s technological backwardness is accompanied by frustration at the failure to achieve objectives promised in public policy documents, the delay in structural reforms, some setbacks, the absence of a national plan and the waste of talent and opportunities. This is why we need to move forward in the debate on increasing the effectiveness of R&D investments in Brazil. After all, effective investment is a social right of the country’s future generations and a duty of the present generation,” he concludes.

You can acquire the book here.

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