In recent decades, there has been growing concern about the environmental damages caused by industrial growth in developing economies. It is argued that the mitigation of these environmental damages, for the most part, depends on innovations implemented by industrial companies. In turn, the implementation of innovations depends on technological capabilities. Unprecedented research by FGV’s Brazilian School of Public and Business Administration (EBAPE), led by professor Paulo N. Figueiredo, has advanced understanding on how the accumulation of technological capabilities, on an enterprise level, contributes to innovations that mitigate environmental damages.

To that end, the research examined the differences between and within companies in terms of accumulation of innovative capability levels, the time scales for the accumulation of these capabilities, interdependence with external organizations, such as vendors, universities, and research institutes, and especially the impact on innovative activities.

Based on evidence from the Brazilian bio-ethanol industry and going beyond the company as an observation unit, the research shows that the implementation of ambitious innovations, i.e., with a national and international novelty level, depends on the accumulation of various technological capabilities for specific areas in the company.  The study also points out that such innovative capabilities no longer reside only in companies, but are distributed throughout several external organizations. In addition, areas of the companies that accumulated high levels of technological capabilities with more extensive collaboration with external organizations implemented more ambitious innovations. However, the research also shows that there are considerable differencesbetween and within companies in terms of the accumulation of innovative capability levels, the time scales for such accumulation, and in collaboration with external organizations.

The results of the research add relevant contributions to the international debate on the role of technological capabilities of enterprises in the mitigation of environmental damages associated with industrial growth. In addition to creating a basis for future analyses, the research produced practical recommendations that can serve as inputs for public and corporate policies geared to an industrial development standard less dependent on fossil fuels.

The research was conducted under EBAPE’s Research Program on Technological Learning and Industrial Innovation in Brazil, funded by the National Council for Scientific and Technological Research (CNPq). Go to the website to read the complete study.