ERAWATCH COUNTRY REPORTS 2010: Brazil · 2020. 3. 12. · COUNTRY REPORTS 2010: BRAZIL Page 3 of 42...

ERAWATCH COUNTRY

REPORTS 2010:

Brazil

ERAWATCH Network – Innovastrat Consultoria Ltda. (Brazil)

Antonio José J. Botelho PhD

COUNTRY REPORTS 2010: BRAZIL

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Acknowledgements and further information:

This analytical country report is one of a series of annual ERAWATCH reports which cover the EU Member States, Countries Associated to the EU Seventh Research Framework Programme (FP7) and, since 2011, selected third countries (ERAWATCH International).

ERAWATCH is a joint initiative of the European Commission's Directorate General for Research and Innovation and Joint Research Centre - Institute for Prospective Technological Studies (JRC-IPTS). The reports are produced, under contract, by the ERAWATCH Network.

The analytical framework and the structure of the reports have been developed by the Institute for Prospective Technological Studies of the Joint Research Centre (JRC-IPTS) with contributions from Directorate General for Research and Innovation and the ERAWATCH Network.

The report is only published in electronic format and is available on the ERAWATCH website (http://erawatch.jrc.ec.europa.eu/). Comments on this report are welcome and should be addressed to [email protected].

The opinions expressed are those of the authors only and should not be considered as representative of the European Commission’s official position.


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Executive Summary

Brazil is Latin America’s largest country with an area of 8.5 million km² and the only BRIC in the region. Brazil’s population in 2009 was of 190,755,799 people, accounting for about 33% of Latin America’s population (2009). Its GDP in 2010 reached €1,575.4bn, the world’s 7th largest (6th in 2009 with €1,112.1bn), the second largest among the BRICs, after China. Its GDP per capita in 2009 was €5,830.9 and reached €8,258.73 in 2010. The country’s average GDP growth between 2005 and 2010 was 4.23%, the lowest among the BRICs and the 7th in Latin America. The country’s GDP growth of 7.5% in 2010 followed a 0.6% drop in 2009, in the midst of the global recession, and was the highest rate since 1986. Similarly, the growth rate of the GDP per capita in 2010 of 6.5% was the highest since 1980.

Brazil’s scientific cooperation with the EU is based on a Scientific and Technological Cooperation Agreement signed in 2004, confirmed in 2006, and a strategic pact signed in 2007.

In 2006, overall investment in S&T represented 1.28% of GDP and in 2010 it reached 1.63% (up from 0.96% in 2003, at the beginning of the first Lula government). The goal is to reach 2.2% by 2022. In 2009, R&D intensity (GERD/GDP) was 1.63%, the share of private sector R&D (of GERD) was 45.25% and the share of public sector (federal and state) R&D (of GERD) was 54.75%. BERD went from 0.62% of GDP in 2006 to 0.56% (estimated) in 2010. The Ministry of Science, Technology and Innovation (MCTI)1 budget in 2010 was €3,513m, posting a real growth of 140% over 2006-2010 (170% over the ten-year period 2001-2010).

In 2008, the total number of scientists and researchers was about 211,000 publishing 2.69% of the world’s scientific papers.

The 2008-2009 economic crises did not have an immediate impact on the R&D expenditure and policy as Brazil adopted a series of macroeconomic counter cyclical measures.

The Brazilian research system is in expansion but the capacity of research institutions and universities to interact with firms is still lacking. In 2008, the number of innovative firms (out of a total 106.800 firms in industry, selected services and R&D sectors) is small and the number of those doing R&D even more so (41,300 of the total, a growth of 38.6% over the period 2006-2008; and 17,679 industrial and 727 service firms, respectively). Of the 6 million formal SMEs in existence, only 15,000 innovated according to the 2005 Brazilian innovation survey. Fiscal incentives to promote private R&D investment are skewed towards large firms located in the South and South-Eastern regions. Innovation grants’ distribution which was initially also skewed favouring large firms, has improved considerably. The last innovation survey covering the period 2006-2008) revealed that the percentage of innovative

1 In early August 2011, the Ministry of Science and Technology (MCT) changed its name to Ministry of Science, Technology and Innovation (MCTI). This report uses the latter acronym throughout.


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firms with problems or obstacles to innovation had risen to almost 50% (Pintec 2008). The main issues for industrial and service firms are high cost of innovation, excessive economic risks, and a shortage of qualified personnel and of finance sources in general. Among those firms that did not innovate, the main issues were market conditions, lack of experience in doing innovation and other obstacles. A different research study covering firms from the state of São Paulo identified as the main barriers to their private R&D investments bureaucracy in innovation project submission and accounting, as well as shortcomings in the allowable project scope (e.g., funding of value chain suppliers; hiring of foreign researchers and agreements with foreign research institutions).

Knowledge Triangle

Recent policy changes Assessment of strengths and weaknesses

Research policy Increase in research financial resources and growth of network-based research programmes.

Emerging decentralisation of research planning and funding to state research foundations.

Expansion in scope of mandatory research programmes funding to less-developed region resource expenditures.

Strength: increased volume of research and possibility of establishing new research groups. Weakness: first funded networks become closed networks and hamper development of emerging groups. Established research groups become complacent. Strength: increase in reach and scope of research programmes; discovery of new talent. Weakness: many state research foundations do not have expertise and human resource capacity to select researchers and groups, much less so to monitor their evolution. Strength: broader geographic coverage of research programmes. Weakness: weak research groups get funded without corresponding productive results.

Innovation policy Emerging cooperation with leading trade business associations and other research institute associations to strengthen innovation policy implementation and validate policy instrument design.

Major new institutional financing actors and emergence of multiple new financing sources; rapid expansion of innovation grants.

Strength: Enhances effectiveness of research triangle as it allows for better communication among heterogeneous actors. Weaknesses: Fragmented or overly consensual policy statements and catch-all policy and instruments; special interests policy mechanisms. Strengths: more financial resources for innovation. Weaknesses: firms have difficulties in identifying adequate financing sources; excessive finance and innovation grants crowd-out development of private early stage venture capital sources (e.g., business angel


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investment).

Education policy Continued expansion of federal public higher education system; Expansion of undergraduate scholarship programme for low-income students, in both public and private higher education institutions.

Strengths: more opportunities for free higher education to low-income middle school graduates. Weaknesses: Many public university seats remain vacant for lack of demand, partly due to strong demand for new employees (economy growth remains strong); and private sector higher education, which accounts for majority of enrolment, continues to face academic quality issues.

Other policies A STI long-term policy PACTI II for the period 2011-2014 is under elaboration by MCTI, alongside a new industrial policy PDP II for the same period by MDIC and ministerial partners.

Strengths: Policy continuity and continued programme expansion; and enhancement of research excellence and RDI internationalization with attraction of foreign corporate R&D centres and expansion of foreign scholarships for top universities. Weaknesses: Planned repatriation of Brazilian researchers may reverse internationalization; Finep’s drive to become a financial institution may sacrifice research volume and project scale for quality and sustainable cooperative networks.

European Research Area

Assessment of the national policies/measures which correspond to ERA objectives2

ERA objectives Main policy changes Assessment of national strengths and weaknesses

1 Ensure an adequate supply of human resources for research and an open, attractive and competitive labour market for male and female researchers

- Continued increase in domestic scholarships (resources in R$ doubled in real terms between 2007 and 2010) and an expressed intention to renewed and significant expansion of foreign scholarships; - National Education Plan 2011-2020, in Congress, has as one of its 20 goals to increase the share of 18-24 enrolments in universities from 10% in 2010 to 30% in 2020.

- Highly inadequate supply of engineers to some segments and missing private demand for science & engineering high-level trained personnel. - National Education Plan’s approval has been stuck in Congress; experts call it overambitious and lacking financially targets; enrolment in 87 federal public universities will double, sacrificing quality.

2 Increase public support for research

- Public budget for R&D increased in nominal value from € 7,594.0m in 2007 to.

High levels of R&D expenditure were unaffected by 2008-2009 crisis, but will be slightly affected

2 Of course non-ERA countries do not strive to achieve ERA objectives. This part of the report is simply to allow a comparison with the activities of ERA countries on these issues


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€ 11,270.2m in 2009; as share of GDP, it increased from reached 0.74% in 2007 to 0.89% in 2009.

by the early 2011 budget crisis.

3 Increase coordination and integration of research funding

- Continued support for and multiplication of Mercosur joint research programmes is accompanied by Latin American drive (i.e., creation of Latin American university in Foz do Iguaçu) and expansion of EU thematic cooperation programmes (biofuels).

Following Brazil’s regional foreign policy strategic trend, Latin American educational initiatives compete with Mercosur ones; overall research internationalization policy reactive and reluctant towards effective strategic integration and in a way, too inward looking.

4 Enhance research capacity Strengthening of bilateral and multilateral research and training facilities

Key medium term strategic areas such as nanotechnology.

5 Develop world-class research infrastructures (including e-infrastructures) and ensure access to them

Increased funding of research infrastructure and support to national research institutes (INCT); enhancement of research high-speed network; new PACTI discussions mention multi-user national labs.

Emphasis on national research networks use of facilities for correcting research capacity; imbalance over international world class networks.

6 Strengthen research institutions, including notably universities

Strong funding for university and research institutes’ infrastructure, renovation, and expansion.

Risk of research overcapacity in smaller universities.

7 Improve framework conditions for private investment in R&D

New S&T ministerial team issued a discussion paper on innovation framework; New PACTI I development cites enhancement of legal framework for fiscal incentives and promotes new competencies, and revamping of framework for technological parks and incubators.

Limited scope of fiscal incentives; reluctance of private firms to increase R&D expenditures and SMEs lack of innovation capacity and motivation continues to worry policymakers.

8 Promote public-private cooperation and knowledge transfer

Strengthening of TTOs and diffusion of IP best practices.

TTO human resources with limited knowledge transfer capability and experience; relative organizational isolation of TTOs.

9 Enhance knowledge circulation

Renewed efforts to increase Brazilian organizations participation in EU initiatives.

Domestic organizations have little incentive to engage in EU initiatives: firms because of strong domestic market and research organizations and universities because of large and diverse availability of funds.

10 Strengthen international cooperation in science and technology

Multiplication of bilateral S&T agreements; deepening of strategic areas in some agreements.

No clear international cooperation strategy and no planned integration with national priorities and goals.

11 Jointly design and coordinate Except for Mercosur On-going realignment of Brazilian


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policies across policy levels and policy areas, notably within the knowledge triangle

biotechnology platform, no major changes

foreign policy will constrain any development in this direction.

12 Develop and sustain excellence and overall quality of research

INCT programme. Fragmentation, regional policy and rapid graduate education expansion may hamper sustainability of excellence.

13 Promote structural change and specialisation towards a more knowledge - intensive economy

Effort in microelectronics (CIETEC state company); use of domestic market as enticement for local production of components.

Import-substitution policy risks failure due to rapid technological change and lack of large scale local capabilities and sustained demand.

14 Mobilise research to address major societal challenges and contribute to sustainable development

PACTI under discussion cites promotion of a ‘green economy’, to combat poverty and social inequality, as one of its four drivers.

Previous STI social development programmes became politicized in Congress, that is, focus of Congressional amendments to serve local interests (so-called pork and barrel politics).

15 Build mutual trust between science and society and strengthen scientific evidence for policy making

-Business Movement for Innovation and National STI week; multiplication of empirical studies that generate hard evidence for policy making and sets arena for debate.

Scientific evidence for policy making still limited and underutilized; government-led studies and programme self-assessments introduces bias and raises credibility issue.


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TABLE OF CONTENTS

Executive Summary .................................................................................................... 3

1 Introduction ........................................................................................................ 10

2 Performance of the national research and innovation system and assessment of recent policy changes ............................................................... 11

2.1 Structure of the national research and innovation system and its governance ................................................................................................. 11

2.2 Resource mobilisation ................................................................................. 15

2.2.1 Resource provision for research activities ........................................... 15

2.2.2 Evolution of national policy mix geared towards the national R&D investment targets ............................................................................... 18

2.2.3 Providing qualified human resources .................................................. 19

2.3 Knowledge demand .................................................................................... 19

2.4 Knowledge production ................................................................................. 21

2.4.1 Quality and excellence of knowledge production ................................ 21

2.4.2 Policy aiming at improving the quality and excellence of knowledge production ........................................................................................... 22

2.5 Knowledge circulation ................................................................................. 22

2.5.1 Knowledge circulation between the universities, PROs and business sectors ................................................................................. 22

2.5.2 Cross-border knowledge circulation .................................................... 23

2.5.3 Main societal challenges ..................................................................... 24

2.6 Overall assessment ..................................................................................... 24

3 National policies which correspond to ERA objectives ...................................... 26

3.1 Labour market for researchers .................................................................... 26

3.1.1 Stocks and mobility flows of researchers ............................................ 26

3.1.2 Providing attractive employment and working conditions .................... 27

3.1.3 Open recruitment and portability of grants .......................................... 28

3.1.4 Meeting the social security and supplementary pension needs of mobile researchers .............................................................................. 28

3.2 Research infrastructures ............................................................................. 29

3.2.1 National Research Infrastructures roadmap ........................................ 29

3.3 Strengthening research institutions ............................................................. 29

3.3.1 Quality of National Higher Education System...................................... 29

3.3.2 Academic autonomy ............................................................................ 31

3.3.3 Academic funding ................................................................................ 31

3.4 Knowledge transfer ..................................................................................... 31

3.4.1 Intellectual Property Policies ............................................................... 31

3.4.2 Other policy measures aiming to promote public-private knowledge transfer ................................................................................................ 32

3.5 Cooperation, coordination and opening up national research programmes with the EU ............................................................................. 33


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3.5.1 National participation in intergovernmental organisations and schemes .............................................................................................. 33

3.5.2 Bi- and multilateral RDI agreements with EU countries ....................... 33

3.5.3 Other instruments of cooperation and coordination between national R&D programmes .................................................................. 33

3.5.4 Opening up of national R&D programmes .......................................... 34

3.6 International science and technology cooperation ...................................... 34

3.6.1 International cooperation (beyond EU) ................................................ 34

3.6.2 Mobility schemes for researchers from third countries ........................ 35

4 CONCLUSIONS ................................................................................................ 36

4.1 Effectiveness of the knowledge triangle ...................................................... 36

4.2 Comparison with ERA 2020 objectives - a summary .................................. 37

References ............................................................................................................... 40

List of Abbreviations ................................................................................................. 41


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1 Introduction

The main objective of the ERAWATCH International Analytical Country Reports 2010 is to characterise and assess the evolution of the national policy mixes for the non-EU countries in the perspective of the Lisbon goals and of the 2020 post-Lisbon Strategy, even though they do not pursue these policies themselves. The assessment will focus on the national R&D investments targets, the efficiency and effectiveness of national policies and investments into R&D, the articulation between research, education and innovation. In doing this, the 15 objectives of the ERA 2020 are articulated.

Given the latest developments, the 2010 Country Report has a stronger focus on the link between research and innovation, reflecting the increased focus of innovation in the policy agenda. The report is not aimed to cover innovation per se, but rather the 'interlinkage' between research and innovation, in terms of their wider governance and policy mix.


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2 Performance of the national research and innovation system and assessment of recent policy changes

The aim of this chapter is to assess the performance of the national research system, the 'interlinkages' between research and innovation systems, in terms of their wider governance and policy as well as the most recent changes that have occurred in national policy mixes in the perspective of the Lisbon goals. Each section identifies the main societal challenges addressed by the national research and innovation system and assesses the policy measures that address these challenges. The relevant objectives derived from ERA 2020 Vision are articulated in the assessment for comparison reasons.

2.1 Structure of the national research and innovation system and its governance

This section gives the main characteristics of the structure of the national research and innovation systems, in terms of their wider governance.

Brazil is Latin America’s largest country with an area of 8.5 million km² and the only BRIC in the region. Brazil’s population in 2009 was of 190,755,799 people, accounting for about 33% of Latin America’s population (2009). Its GDP in 2010 reached €1,575.4bn, the world’s 7th largest (6th in 2009 with € 1,112.1bn), the second largest among the BRICs, after China. Its GDP per capita in 2009 was €5,830.9 and reached €8,258.73 in 2010. The country’s average GDP growth between 2005 and 2010 was 4.23%, the lowest among the BRICs and the 7th in Latin America. The country’s GDP growth of 7.5% in 2010 followed a 0.6% drop in 2009, in the midst of the global recession, and was the highest rate since 1986. Similarly, the growth rate of the GDP per capita in 2010 of 6.5% was the highest since 1980.

Brazil’s scientific cooperation with the EU is based on a Scientific and Technological Cooperation Agreement signed in 2004, confirmed in 2006, and a strategic pact signed in 2007.

In 2006, overall investment in S&T represented 1.28% of GDP and in 2010 it reached 1.63%), above the PACTI target of 1.5%. (Up from 0.96% in 2003, at the beginning of the first Lula government). The goal is to reach 2.2% by 2022. In 2009 (latest year available), whereas R&D intensity (GERD/GDP) was 1.63%, the share of private sector R&D (of GERD) was 45.25% and the share of public sector (federal and state) R&D (of GERD) was 54.75%. BERD went from 0.62% of GDP in 2006 to 0.56% (estimated) in 2010, versus a PACTI target of 0.65%. By contrast, federal expenditures went from 0.36% of GDP in 2006, to 0.40% in 2008 and reach an estimated 0.46% in 2010. State expenditures jumped from 0.14% in 2006 to an estimated 0.20% in 2010. The Ministry of Science,Technology and Innovation (MCTI) budget in 2010 was €3,513m, posting a real growth of 140% over 2006-2010 (170% over the ten-year period 2001-2010).

Main actors and institutions in research governance


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Brazil’s research system is mainly funded by the public sector, although the share of the private sector decreased slightly from 48.1% of GERD in 2006 to 45.3% of GERD in 2009 (latest available year). The federal government is the main source of public funds with 38.1% of GERD in 2009 (37.8% in 2006). In spite of the strong efforts of the 27 units of the federation (26 states and 1 federal district) to increase R&D funding, their share of GERD increased from 14.1% of GERD in 2006 to 16.6% in 2009. However, in the federal states the share of expenditures with graduate education grew considerably from 28.9% to 45.2% over the period; in the federal district, it almost doubled, going from 46.7% to 80.9% over the same period.

The research system has not changed much of its main institutional features and competitive funding pattern since the creation in 1951 of the main research funding agency, the National Council for Scientific and Technological Development (CNPq). It is linked to the Ministry of Science, Technology and Innovation (MCTI), which was created in 1985. The few changes concern a partial privatisation in the 1990s of a few public research centres. Furthermore, the number and the volume of research funding by state research foundations have grown significantly over the past decade. This follows the long standing example of the São Paulo state Research Support Foundation FAPESP. Finally, there has been an effort on the part of the federal government to decentralise research funding for the benefit of state foundations.

Figure 1: Overview of the Brazil’s research system governance structure

Source: Botelho (2011)

Ministry of Science, Technology and Innovation

Minister’s Office

Executive Secretariat

SEPED SETEC SEPIN SECIS

CCT

ST&I National

Council

FINEP

Studies & Projects

Financing

Agency

CNENNational

Nuclear Energy

Commission

INB, NUCLEPCDTN, IEN, IPEN

IRD, CRCN

AEB

Brazilian

Space

Agency

INPEfinancing

agencies

CNPqNational Council

Scientific and

Technological

Development

CGEE

Centre for

Management and

Strategic Studies

15 Research Units and

Technological Institutes


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President Dilma Rousseff, who came into office in March 2011, launched on August 4th 2011 the industrial policy Greater Brazil Plan 2011-2014 (Plano Brasil Maior). The policy launch had the presence of the new minister of Science, Technology and Innovation Aloízio Mercadante; the minister of Finance, Guido Mantega; and the new minister of Development, Industry, and Foreign Trade (MDIC), Fernando Pimentel, indication that it was a government-wide policy. President Rousseff thus stated: “The plan reaffirms and expands the government commitment to innovation with its slogan: “Innovate to compete. Compete to grow.”

The policy aims to address constant complaints by Brazilian industry, including the technology sector, about the difficulty of competing with imported goods at a time when the exchange rate went as low as R$1.5359 for every US$1 or R$0.6913 for every €13. The plan’s underlying diagnostic is of an adverse international context; global economic crisis; continuing fall in Brazilian manufacturing exports; absence of domestic sector full recovery from the 2008 crisis, with a few rare exceptions; and deepening of exchange rate war and predatory competition have. Therefore its main drive is to promote Brazilian firms’ capability to develop innovative products and services, and prosper from exporting its technology skills rather than agricultural and mineral commodities. Its policy measures and programmes are to complement government’s foreign exchange actions.

The institutional role of regions in research governance

Brazil is a federation composed of 24 federal units (states) and one Federal District and a total of 5,565 municipalities. Primary (basic) mandatory education is a shared responsibility of states and municipalities. While municipalities are responsible for pre-school (childhood) education the states are responsible for secondary (middle school) education. The federal government is largely responsible for higher education. However in the state of São Paulo, the state-level higher education system is much larger and important than the federal one. States are all equal in terms of overall powers and responsibilities. In terms of research, there is no specific responsibility for the states, but all fund S&T, mainly through scholarships and research projects, via their so-called research support foundations (FAP). Their resources for research funding come from a state constitution mandate determining a percentage of gross fiscal revenues (in the case of the oldest foundation (1960), Fapesp of the state of São Paulo, which also receives additional revenues from a state endowment, the share is 1%). The 25 FAPs in 24 states and in the Federal District (only the two states of Roraima and Rondônia do not yet have a FAP) are usually linked to a state secretariat of S&T, development or planning. In recent years, several FAPs have also supported thematic network-based projects and even more recently, innovation projects in cooperation with universities and research organisations, or in the form of direct grants to firms. About half have passed their own state innovation law and a handful of those established innovation funds to provide competitive grants to firms. Research is heavily concentrated in the country’s South-East region, notably in the state of São Paulo. The state’s GERD of almost R$ 4,971m (around €2b) in 2009 represents 0.5% of its GDP and accounts for 58% of Brazil’s GERD. Although in terms of share of GDP, three other states follow São Paulo - two from the poorer North-East and Paraná, from the richer South. In absolute terms, Paraná comes second, followed by Rio de Janeiro and Minas Gerais,

3 On July 27, 2011. Oanda http://www.oanda.com/currency/historical-rates/


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two other states in the South-East region. These four states together are responsible for 70% of Brazil’s GERD.

In the last few years there has been an effort on the part of the federal government to decentralise research policy by transferring research programmes to state agencies which run the programme locally. The first was CNPq’s First Research Programme (PPP) to fund young researchers’ projects, launched in 2004, followed by Finep’s Programme for Supporting Research in Enterprises (PAPPE), launched in 2006, providing research grants to individual researchers in order to work with a university to assist in a technological development. PAPPE is co-funded with FAPs. It operates in 20 states and funded 599 projects in 540 firms until 2009. Its last 2006 budget was of R$ 21m (€ 8.4m). Finally, there is PAPPE’s successor, the still on-going PAPPE Subvenção programme. It aims at decentralising the flagship programme of direct innovation subsidies for innovation for the provision of grants to firms. The programme is implemented in 17 states and has a total budget of R$ 250mn (€100.6m) until 2010.

The research funding of state research agencies are allocated through competitive calls and are distributed at Fapesp, for example (percentages for 2009) as follows: 42% to research projects, including thematic projects; followed by 36% for scholarships; and special programmes for strategic areas and support to technological innovation with 11% each.

Main research performer groups

In spite of recent efforts towards research decentralisation, the research system is still somewhat centralised in terms of execution in two states of the federation: São Paulo and, to a lesser extent, Rio de Janeiro. The latter was the former capital of the country and inherited several government research institutes. It is also home of the largest federal university (Federal University of Rio de Janeiro, UFRJ). Moreover, it is home to the largest public and general enterprise, the oil and gas exploration company Petrobrás, which has its corporate research centre in the state. Moreover, it has significant research expenditures in-house and externally, focussing mainly in thematic university-network research and more recently in university-based thematic corporate labs.

Sao Paulo has a highly developed state university system with multiple tiers. It includes at the first tier two of the largest and most productive public research universities in the country with the University of Sao Paulo (Universidade de São Paulo USP) and the University of Campinas (Universidade de Campinas UNICAMP). It also hosts a few key state government agricultural research centres and the majority of private enterprises' R&D centres. The majority of the research is executed at universities, followed by public research institutes, among which the public agricultural research company Brazilian Enterprise of Agricultural and Husbandry Research (EMBRAPA), which is linked to the Ministry of Agriculture, Husbandry and Supply (MAPA), has a major role. It maintains research centres spread around the country. The Oswaldo Cruz Foundation (FIOCRUZ) is linked to the Ministry of Health (MS), and headquartered in the city of Rio de Janeiro.

The research system developed into an effective system over the past decade - in spite of its still unbalanced geographic productivity and low-network based research execution. By contrast, the innovation system, which began to be structured in earnest from 2005 with the passing of the federal innovation law, still presents key structural holes such as a small number of networks involving industry, regional and


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local authorities, weak private sector research in terms of number of firms, own expenditures and government incentives with limited scope and reach.

2.2 Resource mobilisation

This section will assess the progress towards national R&D targets, with particular focus on private R&D and of recent policy measures and governance changes and the status of key existing measures, taking into account recent government budget data. The assessment will include also the human resources for R&D. Main assessment criteria are the degree of compliance with national targets and the coherence of policy objectives and policy instruments

2.2.1 Resource provision for research activities

Until the mid-1990s, research policies in Brazil were geared mainly to public research, particularly individual researchers in universities and, to a lesser extent, public research organisations (PROs). They often faced the problem of a lack of financial resource continuity, mainly due to cyclical budgetary constraints and a generally fragmented allocation linked to a highly segmented allocation policy with a multiplicity of disconnected target areas. Universities employ 57% of researchers and research institutes 6% (2008). In 2009 (last year available), higher education expenditures (graduate education expenditures in public federal and state budgets plus private) accounted for 19% of GERD, whereas public expenditures on graduate education accounted for 51% of total public expenditures on S&T and public expenditures with HEI accounted for 58% of public expenditures on R&D.

The crisis did not effect RDI investments until 2011, when budgetary cuts were made. In February 2011, MCTI’s 2011 budget was sharply reduced due to public deficit inflationary pressures. The MCTI budget proposal to Congress was reduced by 21%, representing a decrease from 2010 of 18%.

Although firm data is not yet available, the newly-appointed Minister of Science and Technology Aloizio Mercadante stated in March 2011 that the budget of the 2007-2010 PACTI national plan was executed in full.

Overall policy design is rarely based on empirical evidence. Implementation, despite important advancements in decentralisation efforts, remains heavily centralised. The decentralising policy design units are generally poorly staffed and lacking experience. The 2006-2010 national S&T plan set overly broad and often vague policy orientations coupled to an extensive list of detailed programmes. Although it laid out multi-annual expenditure targets, budgets have to be approved annually by Congress and are subject to political twists.

MCTI is now drafting PACTI II for the 20011-2015 period. It will aim to raise the R&D intensity from 1.5% in 2010 to 2.5% in 2020, reaching 1.53% in 2014. This requires an annual average growth of 10%. Some challenges to be met by the new multi-year plan are sustainable investments to ensure stability and deflect inflationary pressures, the expansion of human resource training capacity and research infrastructure, as well as strengthening of innovation capacities of firms.

Since 2005, an array of policy instruments geared towards the industrial sector has been developed. Until the innovation law came into effect in 2004, policy instruments were legally constrained to support public-private R&D collaboration. A provision in the law allowed funding of RDI directly to firms. In the relevant PACTI strategic priority II (Promotion of Technological Innovation in Enterprises) there are three axes:


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1. Financial support to innovation; 2. Technology in support of innovation by enterprises and 3. Incentives for start-ups and consolidation of technology-intensive enterprises. In order to meet PACTI’s Priority Goal II to increase the private RDI expenditures from 0.51% of GDP to 0.65% by 2010, PACTI had as its objective the integration of different instruments in support of technological innovation and considerable expansion of financial support (R&D contracts, loans, venture capital etc.). The main instruments at FINEP/MCTI and CNPq/MCTI are included in Figure 2 and the ones of the BNDES/MDIC are included in Figure 3

Figure 2 Overview of the main instruments of FINEP/MCTI and CNPq/MCTI


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Figure 3 Overview of the main instruments BNDES/MDIC

FUNTECTechnological

Development Fund

agency Technological Innovation –

financing focused in projects

Innovative Capital –

Financing focused in companies

Support for Strategic Sectors

BNDES Card-Innovation Services for MSMEs

Seed capital fund Criatec –Technology-based start-ups

technological institutions and non-profit

organizations in partnership with firms

Note: Blue: Non-reimbursable, green: Venture Capital, Violet: Loan, Yellow: Other

Policy instruments:

1) Stimulating greater R&D investment in R&D performing firms - at FINEP/MCTI: Economic Subsidy Innovation grant, Tax Equity (Juro Zero), Fiscal Incentives (General “Good Law” and IT industry (Informatics Law) programmes), and Inova Brasil; at CNP/MCTI: Company Researcher – Strategic Activities Human Resources Training RHAE scholarships programme.

2) Promoting the establishment of new indigenous R&D performing/innovative firms – at FINEP/MCTI: PRIME grants, PAPPE Economic Subsidy Innovation grant, Incubation Programme; Regional Seed Capital Funds and at BNDES/MDIC: Seed capital fund Criatec.

3) Stimulating firms that do not perform R&D yet to perform R&D activities – at FINEPP/MCTI: Economic Subsidy Innovation grant, Tax Equity (Juro Zero), SIBRATEC programme and at BNDES/MDIC: BNDES Card-Innovation Services for MSMEs.

4) Attracting R&D-performing firms from abroad – inter-ministerial (MCTI – MDIC – MEC) Pro-Innovation Committee.

5) Promoting R&D activities carried out in private-public cooperation - at FINEP/MCTI: PAPPE and SIBRATEC programme, and at BNDES/MDIC: FUNTEC grants to universities and research institutes.

These R&D support schemes in different public calls have selectively targeted various high technology industries which are a priority in the industrial policy that succeeded PACTI, the Productive Development Policy (PDP). For example, the Economic Subsidy Innovation grant programme (since 2006) had targeted calls to aerospace, alternative energy, biotechnology, capital goods, ICT (including digital TV), health (including pharmaceuticals and drugs) and nanotechnology. A SEBRAE/FINEP 2009 call was directed to support public-private (SMEs) cooperative


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R&D in creative industries. BNDES provides support for strategic sectors through the following programmes: (i) Pharmaceutical (Profarma – inovação); (ii) Software (Prosoft – Empresa); (iii) Engineering (Proengenharia); (iv) Aeronautics (Pró-aeronáutica); and (v) Digital TV (PROTVD Fornecedor). Further, some special high-tech sectors such as microelectronics (semiconductors) have been targeted by MCTI with the creation of a state enterprise to produce semiconductors, Ceitec.

Created in 2001, during the 2nd Science, Technology and Innovation National Conference, the Strategic and Management Study Centre (CGEE) is an organisation that links the main agents of the STI system: the government, academia and the private sector. With an initial agenda focused on the support of the Sector Funds’ activities, it gradually developed a new role with a broader perspective of producing knowledge to subsidise policy design analysis, programme formulation and assessment related to STI, largely based on prospective studies, strategic evaluations and an intelligent information management. Others studies were related to innovation financing instruments and to impact of subsidies in the Economic Subsidies programme (Programa Subvenção Econômica), among others. The 4th National Conference on Science, Technology and Innovation held in Brasilia on 26–28 May 2010 is another supporting mechanism, aimed at building mutual trust between science and society.

2.2.2 Evolution of national policy mix geared towards the national R&D investment targets

Between 2005 and 2009 (latest year available) BERD (which comprises expenditures by state companies such as Petrobrás, the leader in R&D expenditures, internal and external acquisition) almost doubled, going from €4,953.4m to €9,315m. As share of GDP, BERD decreased from 0.64% in 2005 to 0.63% in 2007, and rose again to 0.74% by 2009; ahead of the target goal for 2010 set in the PDP of 0.65%. Whereas the rise in absolute terms in BERD appears to reflect the impact of public funding programmes aimed at leveraging greater private sector investments such as the Economic Subsidy programme and the fiscal incentives provisions in the so-called Good Law, both launched in 2006; the recent rise in the share of GDP is partly due to the fact that 2009 GDP decreased by 0.6%. Moreover, BERD as a share of GERD went from a decade high of 50.2% in 2005 to 45.2% in 2009.

The recently published Brazilian innovation survey PINTEC 2008 (covering period 2005-2008) shows that although in relation to the 2005 survey results (covering the period 2003-2005) the number of innovative firms increased from 30,377 to 38,299 in a universe of over 100,000); the share of industrial firms developing advanced technological innovation remained quite small albeit growing from 2.7% in 2003 to 4.1%. While the number of firms doing R&D fell from about 5,000 in both 2003 and 2005 to 4,300 in 2008, the number of those doing R&D internally, continuously grew from 2,400 in 2003 to 3,000 in 2008.

Overall, between 2006 and 2010 (although 2010 data for some programmes are not yet available and for others, the last call was in 2008) the government mobilised €5.58b for business innovations distributed as follows: economic subsidies (grants) and fiscal incentives (34.4%); financing, which includes a small share for FINEP and BNDES public venture capital programmes (61.1%) and structuring programmes (tech transfer, incubators and technological parks, etc.) (4.5%). Government innovation policy and its main programmes (in terms of resource allocation) – Finep’s corporate grants (Subvenção Econômica), fiscal incentives (Good Law provisions) and financing (Finep’s Pro-Inova / Inova Brasil programme and BNDES multiple


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programmes) - are aimed at stimulating greater R&D investment in R&D performing firms. The, government’s policy is also aiming at promoting the establishment of new indigenous R&D performing firms. This is mainly though a gradual re-orientation over the past couple of years of Finep’s corporate grants (Subvenção Econômica) towards targeting SMEs and strategic sectors of the industrial policy PDP. The launching of a grants programme for start-ups in 2009 (PRIME), the continued and growing financial support to incubators and technological parks via the PNI programme, the support to technology transfer offices NITs and scholarships for researchers to work in firms (programme RHAE – Pesquisador na Empresa support this policy. As for stimulating firms that do not perform R&D yet – the government in cooperation with the business sector is studying changes in the rules of fiscal incentives to benefit the number of firms than it currently does (870 in the 2006-2008 period) and is supporting the Business Innovation Coalition (Movimento Empresarial pela Inovação MEI), a partnership of the main government agencies FINEP and MCTI with the National Industry Confederation (CNI) and the public-private agency for support of MSEs (SEBRAE). Furthermore, it supports two programmes to establish or promote innovation management units with the goal of implementing 3,000 innovation plans and to assist 2,400 industrial SMEs to submit innovation projects to government agencies. The government has also set up an Innovation Room, under the Executive-Secretariat of the industrial policy PACTI / PDP, which brings together representatives from different ministries and agencies, to support and facilitate business investments in R&D and innovation. In regard to attracting R&D-performing firms from abroad, the government set up a task force at the beginning of 2011 to pursue it.

2.2.3 Providing qualified human resources

Total human resources in science and technology (HRST) as a share of the economically active population increased from about 16.7% in 2005 to about 18.2% in 2008 (latest year available) . As for HRST with a higher education and a completed master or doctorate as a share of the economically active population, it rose from about 65% in 2001 to a record high of 73.7% in 2006, to drop slightly to 72% in 2008.

Among its four main target goals for 2010 (in relation to 2006) in the Human Resources area, PACTI targets 160,000 scholarships, with a focus on engineering and the strategic areas of the industrial policy. In 2010 alone, CNPq awarded 58,362 scholarships for these areas (out of a total of 83,453 scholarships in that year, of which 432 for mainly graduate study abroad and 19,293 for and master and doctoral study. In 2009, 38,800 master and 11,400 doctorate degrees were awarded.

In terms of the number of tertiary graduates in science and technology, it more than doubled between 2000 and 2007 (from 106,183 to 235,339). However, their share within the total number of tertiary graduates declined until 2004 to 27.1%, but increased again to 31.1% in 2008 (latest available year).

The number of doctorate students enrolled in S&T fields (at the end of each year) increased from 2000 to 2009 by 65%. However, their share of total doctorate students fell from 66.3% to 62.3% over the period.

2.3 Knowledge demand

This section focuses on structure of knowledge demand drivers and analysis of recent policy changes.


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GBOARD evolved from €2,565.6m in 2005 to €5,826.6m in 2009 (latest available year). According to the author’s estimates, defence accounts for 9.33% of GBAORD (Ministry of Defence R&D + MCT National Nuclear Development programme outlays). By default, civilian GBOARD represented 91.77% in that same year and its estimated breakdown was:

• Economic Development: 32.85% of total GBAORD; • Health and Environment: 8.68% (Ministry of Health R&D + Ministry of

Environment R&D + MCTI ST&I Applied to Natural Resources and Meteorology and Climatic Changes programmes);

• Exploration and Exploitation of Space: 2.83% (MCTI National Programme for Space Activities PNAE;

• Non-oriented Research: 4.39% (MCTI Promotion of Scientific and Technological Research programme);

• Research financed from General University Funds (GUF): 41.92% (Ministry of Education R&D=graduate education outlays).

According to the results of the latest innovation survey for the period 2006-2008 (Pintec 2008), the automotive sector accounts for about one-fourth of industrial R&D and has the highest innovation rate of 83.2% - higher than the overall (industry and selected services) innovation rate of 38.6% and that of the industrial sector of 38.1%. Following the automotive sector were high and medium-high technology categories: pharmaceutical and pharmaceutical-chemical products (63.7%), other optical and electronic products (63.5%), chemical products (58.1%), communications equipment (54,6%), peripherals and information technology equipment (53.8%), machinery and equipment (51.0%) and electronic components (49.0%). Below the industrial sector average, there is only one of the medium-high sectors with transportation equipment (36.1%). All other industries belong in the low technology sectors. Those with the lowest innovation rates are extractive industries (23.7%) and wood products (23.6%).

Another way to get a glimpse into this demand is to analyse the demand and goals of sectorial ministries over the PDP period. Overall, given that R&D by the oil and gas (O&G) state company Petrobrás (affiliated to the Ministry of Mining and Energy MME) accounts for roughly 20% of GBAORD for 2007-2010, and given the fact that three main general R&D funding sources – MCTI, BNDES and MEC – jointly account for 68.1% of GBOARD and have about two-thirds of their funds directed to sectorial/thematic priorities, it is fair to state that the balance between generic and thematic/sectorial R&D policies tips toward the latter. Estimates from available data show that Brazil’s GBOARD for the period of the PACTI 2007-2010 (2010 estimate) was R$41b (€16.5b). The three main generic funding sources were MCTI (43.3%), National Bank for Social and Economic Development BNDES, linked to the MDIC (13.2%) and MEC (11.6%).

The corresponding shares of sectorial ministries were: MME (19.4%), which includes its affiliated state companies – Petrobrás in the O&G sector with the largest budget and Eletrobrás, active in electric energy generation and transmission. These are followed with considerable distance by the Electric Energy Research Centre CEPEL; MAPA (3.5%) and MS (2.7%). The MME main research programme for energy and O&G, is under the responsibility of the public company Petrobrás; whereas CEPEL of Eletrobrás executes and coordinates RDI programmes.

In regard to health (GBAORD Health and Environment line), it should be noted in the context of PACTI’s integrated planning framework, the MCT and MS are partners in building research networks to respond to the needs of Brazil’s public health system


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SUS and in creating national toxicology centres. MS’s S&T Secretariat makes public calls according to themes developed by the National Agenda of Health Research Priorities, in articulation with CNPq, Finep and Unesco; and coordinates all stages of funding from the definition of research themes to their monitoring and evaluation.

In regard to agricultural production and technology (GBAORD Economic Development line), the Ministry of Agriculture and Husbandry Production (MAPA) is responsible for carrying out policies for developing agribusiness and coordinates the agribusiness action line of the PACTI in a planning partnership with MCTI. Its research execution arm is the Brazilian Agricultural Research Company EMBRAPA. Its main activities are to strengthen the national system of agricultural research, which includes the state organisations for Agricultural Research (OEPA), and to support the setting up of a new state company Embrapa Agro Energy.

In regard to defence GBAORD, the Ministry of Defence MD’s National Defence Policy maintains research activities under the Industrial Defence Complex programme of PACTI, and has benefited from the consolidation of its partnership with MCTI in the PACTI framework, aimed at strengthening military research and training institutes and development of new products and process through import substitution.

The distribution of 14 SIBRATEC thematic network innovation centres also provides an idea about the knowledge demand. They are serving manufacture and capital goods; microelectronics; consumer electronics; wine culture and science; photovoltaic solar energy; plastics and rubber; advanced visualisation; bioethanol; odontology, hospital and medical equipment; human health inputs; digital ICT; nano-cosmetics; and electric vehicles.

2.4 Knowledge production

The production of scientific and technological knowledge is the core function that a research system must fulfil. While different aspects may be included in the analysis of this function, the assessment provided in this section focuses on the following dimensions: quality of the knowledge production, the exploitability of the knowledge creation and policy measures aiming to improve the knowledge creation

2.4.1 Quality and excellence of knowledge production

In 2009, the total number of scientists and researchers was about 211,000, who published 2.7% of the world’s scientific papers, growing from 1.8% in 2005. It is thus the 15th largest producer of scientific literature (up from number 20 in 2000). In 2008, Brazilian scientific publications grew by 11.3%, 3.8 times the world average growth.

According to the Unesco, between 2002 and 2007 the number of scientific publications grew from 12,573 to 26,482, an absolute growth of 110%. The area with the highest number of publications is medicine (8,799 in 2008), whereas mathematics had the lowest with 708, despite having almost doubled since 2002’s 398 papers. Over 90% of Brazil’s scientific production comes from the 4,099 graduate programmes. The country has roughly 85,500 Ph.D. holders, equalling 1.4 Ph.D.s per thousand inhabitants, against 8.4 in the United States and 13.6 in Germany. Over 80% of the Ph.D.s is working in universities. There are 253 universities employing 77.463 Ph.D.s and 113 public and non-profit scientific and R&D centres employing 8,099 PhDs.

In terms of patents, in 2009 the number of Brazilian patents at the USPTO was 103. In 2008, Brazil had 0.2% of triadic patents (WIPO). The number of patents filed at the


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Brazilian intellectual property office (Instituto Nacional de Propriedade Intelectual INPI) rose from 25,406 in 2006 to 28,052 in 2010. Non-residents accounted for 72.6% and 74.1%, respectively. PCT filings accounted for 63.7% and 64.4%, respectively, the near totality in both years by non-residents. Between 2006 and 2010, the number of patent filings by microenterprises increased from 199 to 288, a 44% growth.

A research policy partnership between the MCTI and the states, the Regional Scientific Development programme established 519 agreements with FAPs for a total value of R$ 84m (€33m) to support projects in regional ROs with a lack of qualified researchers.

2.4.2 Policy aiming at improving the quality and excellence of knowledge production

Although there is yet no systematic effective monitoring and review system, making full use of output indicators, international benchmarking or ex-post evaluation tools, some new institutional and network programmes are being selected on the basis of the quality of proposals and subject to external peer review. For example, the National Institutes for Science and Technology programme (INCT) funded 122 institutes spread out throughout the country in 2010, has been monitored and evaluated on the basis of internationally acknowledged criteria; projects were selected on the basis of the quality of proposals and subject to international external peer review.

2.5 Knowledge circulation

This section provides an assessment of the actions at national level aiming to allow an efficient flow of knowledge between different R&D actors and across borders.

2.5.1 Knowledge circulation between the universities, PROs and business sectors

Most policy measures to reinforce the cooperation between universities, research and business were launched after the passing of the 2005 innovation law and therefore it is too early to assess their effectiveness and impact. Recent research however has shown that Brazil has a low high tech share as well as a lowly developed business culture and a high reluctance of PROs to cooperate with the private sector.

The number and scope of policies designed to support innovation that have complementary impacts on researchers and research activities have increased over time particularly following the launch of the 2005 Innovation Law, which targeted efforts in some of these areas. One exception is support to incubators which dates back to the late 1980s. Since then the programme has grown and its scope was enlarged to comprise support to technological parks. In October 2010, Finep launched a call to fund the expansion and development of technological parks with an R$40m (€16.1m) budget.

In March 2009, FINEP made an R$10m (€4.0m) call to support Technological Innovation Nuclei (ILO/TTO or NIT in Portuguese) at public universities/research centres which funded eight projects involving 73 institutions. By the end of 2009 there were 80 of those Technological Innovation Nuclei, distributed in 64 public and 17 private institutions.


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Further, the RHAE programme awards scholarships (Bolsas de Fomento Tecnológico) to researchers with either a master or a doctoral degree to participate in technological research and innovation activities in SMEs. The participating firms have to provide 20% of the project cost as complementary funding of R$45m (€18.1m).

2.5.2 Cross-border knowledge circulation

An orientation of the international cooperation policy of PACTI is that the MCTI executive agencies partners are to be FINEP and CNPq. Other programme partners are the Brazilian Academy of Sciences, and the ministries of foreign relations, industrial development and foreign trade and agriculture. A total of about €30m was targeted by the government for investment in international cooperation programmes over the four-year period.

B.Bice is a project oriented to the enhancement of the international cooperation activities in science, technology and innovation between Brazil and the European Union (EU). It aims to improve the Brazilian participation in the EU’s 7th Framework Programme. Its mission is to disseminate information, to identify financial support mechanisms and to assist in the search of Brazilian and European partners for setting up project proposals. In March 2011, B.Bice launched a project to map the scientific and technological competencies of Brazilian universities (Mapa da Competência Nacional em P&D) in order to support the goal of increasing Brazilian participation in the Framework Programme.

Several new inter-regional cooperation arrangements were developed: South-South, particularly with Mercosur, and other Latin-American countries; between South America as well as Arab and African countries, particularly with Portuguese-speaking countries. They aim at human resources’ training and infrastructure building; a forum with India and South Africa expands its working agenda.

In recent years, cooperation with China has expanded to include new areas beyond the successful joint space programme. Joint work strengthened also with developed nations, particularly Germany, France, United States, United Kingdom, Finland and Switzerland, and the European Union as a whole, among others.

Brazil has equally stepped up its participation in international forums: the UNESCO Commission on S&T; Third World Academy of Sciences TWAS, Iberoamerica General SEGIB, World Science Forum of UNCTAD, Economic Commission for Latin America; and OECD Science and Technology Policy Committee, in which Brazil was admitted as observing member in 2007.

Capes/MEC has four programmes for the Mercosur countries which generally provide scholarships for study missions, several types of scholarships (short-term, long-term, visiting, etc.) and benefits for installation, health insurance and airfare. The Capes PPCP-Mercosul supports joint research projects, doctoral student exchanges and researcher specialisation. The programme to strengthen graduate studies (Programa de Associação para Fortalecimento da Pós-Graduação – Setor Educacional do Mercosul) aims to promote academic collaboration for graduate training between a university post-graduate centre of excellence in one country and another university post-graduate programme. The partnership undergraduate language programme (Programa de Parcerias Universitárias de Graduação em língua espanhola e portuguesa no Mercosul) promotes university partnerships in the Portuguese and Spanish language at undergraduate level in order to stimulate exchanges among participating countries and spur alignment of curricular structures. Finally, the doctoral scholarship for university professors programme’s (Programa Capes Bolsas


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de Doutorado para Docentes – Mercosul) objective is to promote exchange and training of university professor towards improving teaching and research in the region. CAPES has also established a cooperation programme with the Argentinean Ministry of Science and Technology (Programa de Cooperação Internacional Capes/MINCyT) to promote academic exchange of professors and students in graduate programmes and train human resources. In 2009, 22 joint projects were funded. The 2010 call also included funding of groups of up to three universities from each country.

In January 2010, the Federal University for Latin American Integration (Universidade Federal da Integração Latino-Americana UNILA) was established in the city of Foz de Iguaçu, located at the frontier between Brazil, Argentina and Paraguay. It is made up of the Mercosur Advanced Studies Institute (Instituto Mercosul de Estudos Avançados IMEA), its seed unit, and four disciplinary institutes.

There is awareness in the Brazilian government about the need to improve the strategic and regulatory frameworks of international cooperation in order to make it more defined, dynamic and efficient. A decree proposal being discussed in the Presidency aims to facilitate visa conditions to scientists, professors and researchers as well as professionals involved in STI, and to simplify entry of foreign professionals involved in scientific and technological cooperation.

2.5.3 Main societal challenges

Inter-ministerial cooperation was developed to tackle societal challenges such as health, education and defence through better integration of PACTI with the respective programmes of the More Health Programme (Programa Mais Saúde); the Education Development Plan (Plano de Desenvolvimento da Educação) and the National Defence Policy (Política Nacional de Defesa).

Science-based societal challenges are addressed through the National Institutes of S&T (INCT) programme (in substitution of the 2011 Millennium Institutes programme which did not fulfil its promises), launched by a competitive call in 2008. The CNPq-coordinated programme aims at developing strategic areas through thematic network research led by a centre of excellence. Funding is provided mainly by CNP and co-funded by several partners: FINEP (FNDCT), the Ministry of Health, CAPES, BNDES, and eight state research foundations. The programme will fund 122 INCTs for three years. The total funding for the research programme for centres of excellence, Pronex, and for the INCT programme accounted for almost two-thirds of research expenditures by CNPq and FNDCT over 2008-2009; and were also the programmes with the most significant growth over 2006-2007, when their total resources more than doubled.

2.6 Overall assessment

Table 1: Summary of main policy related opportunities and risks

Domain Main policy opportunities Main policy-related risks

Resource mobilisation

Increased funding for research and launch of new network-typed programmes allows for developing higher density in some research areas.

Significant growth of research resources over the last few years could lead to complacency and the increase in block funding to centres of excellence and national institutes network could shut off young talent and new and innovative research areas. As more funding partners


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join, governance issues may arise and evaluation demands could be fragmented and subject to diverse political pressures.

Knowledge demand

Effectiveness of sectorial funds managed by governmental ministries could be improved by linking to network-based scientific and technological research programmes.

The increased weight of oil and gas research demand led by Petrobrás could generate human resource shortages and skew research teams competence-building and orientation.

Knowledge production

As the number of post-graduates increases, firms will have a greater choice in developing corporate research units, given proper incentives as they are reluctant to hire researches with post-graduate degrees.

The growth of new post-graduates and institutional pressure for continued growth in post-graduate programmes may lead to training and research quality problems.

Knowledge circulation

Integrate international cooperation programmes into national programmes such as INCT as well as strategic programmes, as it has started to be done in biotechnology and nanotechnology with Mercosur. Give scholarships to foreign researchers in strategic areas.

Human resources availability and institutional pressure for graduate training of large quantities does not create incentives for international cooperation. The number of students pursuing graduate studies abroad continues to decline

Table 2: Main barriers to R&D investments and respective policy opportunities and risks

Barriers to R&D investment Opportunities and Risks generated by the policy mix

Lack of human resources / high cost of innovation

There is an opportunity for entrepreneurial research and training units to train specialised human resources targeted to the needs of a few business segments demand. The risk is that the cost of human resources in R&D which is already quite high will hamper new entrant firms into the research space and will further increase the already high cost of innovation

Shortage of financing sources / bureaucracy in innovation project submission and accounting

The policy opportunity is to develop well-targeted, lean and flexible, finance instruments. The risk is to crowd out private venture capital, particularly early-stage finance sources.

Excessive economic risk / lack of experience in doing innovation

An opportunity exists to promote the development of private early-stage venture capital agents such as business angels and investors to help reduce risks. This could also contribute to help overcome inexperience in innovating by the majority of firms.


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3 National policies which correspond to ERA objectives

3.1 Labour market for researchers

3.1.1 Stocks and mobility flows of researchers

In 2008, the total number of scientists and researchers was about 211,000, of which 57% worked in universities and 6% in research institutes. Of this total, 69,000 had a doctorate, of which 64,000 worked in higher education institutions, according to MCTI. Of the 133,000 full-time equivalent researchers (0.7 per million inhabitants in 2008), 56.8% were working at a university.

Between 2004 and 2009, the two main programmes (CNPq/MCTI and Capes/MEC) increased the number of scholarships for studying abroad from 3,407 to 5,263, a 51% growth rate. However, the distribution of types of scholarship changed over the years. Over the same period, for example the number of partial foreign scholarships, the so-called Bolsas Sanduíche, awarded by both CNPq and CAPES, which fund doctoral students abroad for a period of 12 to 18 months, grew by 77%. Between 1992 and 2007, the number of full foreign doctorate scholarships awarded by CNPq fell from almost 2,800 to about 500, a drop of 80%. Over the same period, Bolsas Sanduíche grew slightly, reaching 5,000 students in 2007. Since 2007, the partial foreign scholarships obtained less funding from CNPq than the doctorate scholarships.

In 2009, Fapesp awarded almost 2,000 domestic doctorate (about 1,500 in 2005) and 1,000 post-doctoral scholarships (about the same in 2005). Only 171 scholarships were awarded for research abroad, less than in 2005.

In March 2008, Capes/MEC suspended full foreign doctorate scholarships, except for the United States. At the time it funded 632 doctorates in 21 countries. The number of partial foreign scholarships, the so-called Bolsas Sanduíche, amounted to 551 in 35 countries. At the end of 2008, there were 3,920 Brazilians pursuing a doctorate or post-doctorate abroad with a scholarship from CNPq or Capes. In October 2010, Capes/MEC launched a competitive call for 100 full foreign doctorate open scholarships.

Between 2000 and 2009, the total number of foreign scholarships increased from 2,526 to 3,777. As the country's economic growth continues, a shortage of engineering graduates has happened. Only 5% of higher education students in Brazil are trained in engineering. Brazil graduates 30-35.000 engineers per year, far below the demand. Furthermore a large percentage of those graduates pursue careers in other areas. There is an even more serious shortage of technicians for growth industries ranging from construction to oil and gas. Whereas six million students are enrolled in higher education, only one million are enrolled in technical education programmes. In order to face this challenge, the government launched at the end of April 2010 a national technical education programme (Programa Nacional de Acesso ao Ensino Técnico e ao Emprego Pronatec). The programme will build 200 new technical schools by 2014 and will have a 2011 R$ 1b (€450m) budget for scholarships (70%) and student loans (30%).


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Finally, President Dilma Roussef announced in April 2011 the goal of sending 75.000 Brazilians to study abroad, particularly in the exact sciences. She expects that the private sector will match resources to reach the mark of 100.000 foreign study scholarships by 2014.

In regard to inward flows, there is no data available. However, in May 2011 the president of the Brazilian Academy of Sciences (Academia Brasileira de Ciências ABC) suggested that Brazil ought to promote the immigration of young researchers with the offer of postdoctoral scholarships as a way to oxygenate research institutions.

At the undergraduate level, there were 2,700 foreign students studying at Brazilian universities – federal, state and private – in 2009. This is in the framework of a MEC programme for students from countries with which Brazil has educational and cultural agreements (PEC-G) such as Colombia, Angola, Cape Verde, Cuba and others. There are 89 participating higher education institutions. Most foreign students are enrolled in medicine, engineering, business administration and international relations.

3.1.2 Providing attractive employment and working conditions

Federal and state researchers and university professors have guaranteed employment stability. Career advancement and salary increase in some federal research institutes (INPI and Embrapa) is based on educational degrees. Over the last decade, public universities have been increasing the number of doctorates in relation to master degree holders.

In the state of São Paulo, a 2006 study pointed out that the salaries of full time state university professors at the top of their career hierarchically speaking was higher than that of their counterpart researcher at a state research institute. The entry-level salary for a researcher with tertiary education in the state research institute system is the lowest among other entry level posts in other areas with similar qualification, including federal research institutions (INPI and Embrapa) as well other public positions, for example in the insurance regulatory agency, the central bank or the federal police. The study also showed that salaries of positions requiring researchers with a master degree at the two federal institutions was lower than comparable posts at other public organisations such as the central bank and the internal revenue service – however, at the latter organisations an advanced degree is not required. The discrepancy continues at Ph.D. level – the entry salary for a Ph.D. degree holder at a federal institute is lower than that of a fiscal agent position at the internal revenue service.

Today, the salary of a new entry-level professor at a federal university is lower by 30-50% than most other federal entry-level posts which require just a university diploma. For that reason, anecdotal evidence shows that middle-career federal university professors are moving into other positions in the government and a sizable share of graduates of top science and engineering universities chose to pursue administrative careers in government. It is now possible that full-time professors joining a federal university (Instituições Federais de Ensino Superior IFES) can be classified in four basic categories: auxiliary (auxiliar), assistant (assistente), adjunct (adjunto) and full (titular) - depending on the highest educational degree obtained.

In August 2011, the Federal Government made an emergency proposal to increase the entry-level base salary for federal university professors with the addition of two types of gratifications to their base salary (Gratificação por Exercício do Magistério Superior GEMAS and Gratificação de Atividade Docente de Ensino Básico, Técnico


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e Tecnológico GEDBT). Together with a higher degree gratuity (Retribuição por Titulação RT), an increase of 4% of the total wage can thus be obtained. The Federal Government also proposed to start a negotiation to restructure the federal higher education career plans in May 2012.

3.1.3 Open recruitment and portability of grants

In Brazil, federal and state university professors and researchers are civil servants. Non-nationals are eligible in competitions for permanent research and academic positions. However any candidate holder of foreign undergraduate and graduate diploma, will be required to have it accredited by a federal institution of higher education with a established post-graduate programme in the area (which can be the same prospective employing institution or another) in order to gain employment at a federal university or research institute. Job openings (professors, post-docs etc.) are advertised in the institution’s website and sometimes in specialised journals and online sites. In some universities and areas there’s still considerable inbreeding. Formal recruitment processes are generally open and transparent, but in some areas the process can be oriented towards pre-selected candidates.

3.1.4 Meeting the social security and supplementary pension needs of mobile researchers

Brazilian students and researchers with a federal government scholarship abroad - unless they are also university or research centre employees - do not pay social security in Brazil during their term abroad. Foreign students awarded a Brazilian government scholarship for post-graduate (masters and doctoral) studies in the country (Programa de Estudantes-Convênio de Pós-Graduação PEC-PG) are entitled to free medical, dental and pharmaceutical assistance and benefits in the basic federal health system (Sistema Único de Saúde SUS). However, federal government scholarship for foreign visiting researchers (for example, CAPES Programa Professor Visitante do Exterior PVE) have to obtain and pay for their own health plan. Brazilian scholarship students abroad receive funding to pay for a health plan. Supplementary private pension schemes do exist in Brazil and public sector researchers are free to pay on their own if they chose to do so.

Given that few Ph.D. holders working in industry and that the majority of new Ph.D. graduates move to a larger extent to universities and to less one to public research centres, the government provides incentives for firms to hire master and doctorate degree graduates. The RHAE programme awards scholarships (Bolsas de Fomento Tecnológico) to researchers with master and doctoral degrees to participate in technological research and innovation activities in MSE firms. Executive organisations have to provide 20% of the project cost as counterpart funds. A 2009 call target was to benefit 200 researchers.

Brazil has multiple cooperation agreements in various strategic research areas which afford short term international training and research mobility to Brazilian researchers. For example, the Argentine-Brazilian Centre of Nanoscience and Nanotechnology (CABNN) coordinates research groups, networks of nanoscience and nanotechnology, and companies from Argentina and Brazil and develops human resources. Its activities also include the establishment of joint working groups with firms to identify market niches and products for development. The French-Brazilian Amazon Biodiversity Centre (CFBBA) is composed of research centres from both countries which make use of existing infrastructure or collaborate to develop new infrastructure. A 2009 MCTI/CNPq (Edital PROANTAR 23/2009) call was made in


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support of South American Antarctic Research. There is also a South American Strategy international programme to conduct research in life sciences, geosciences, physical sciences and environmental monitoring.

3.2 Research infrastructures

Research infrastructures (RIs) are a key instrument in the creation of new knowledge and, by implication, innovation, in bringing together a wide diversity of stakeholders, helping to create a new research environment in which researchers have shared access to scientific facilities.

3.2.1 National Research Infrastructures roadmap

In the axis “Expansion and consolidation of the National ST&I System” of PACTI 2006-2010 a main action line is “Support to S&T research infrastructure.” There are grant programmes for research infrastructures and equipment such as Proinfra – the Programme to Support Research Infrastructure and Proinfra – New Campus to build infrastructure in new university campus. Thus, the horizontal sectorial fund CT-Infra, managed by Finep, through its S&T Institutes Modernization Programme Proinfra (Programa de Modernização da Infraestrutura das ICTs) instrument funded a competitive public call for 119 infrastructure projects; and through another instrument (Novos Campi) directed to new federal universities and regional campus of federal universities, another 41 projects. Since 2004, Proinfra had a significant expansion of resources. It invested R$743.9m (€519m) between 2004-2009 with a significant growth rate for 2008 and 2009, when public calls totalled R$360m (€144.8m). However, while there are several programmes dedicated to infrastructures, there is no national roadmap for the building of new infrastructures.

3.3 Strengthening research institutions

This section gives an overview of the main features of the national higher education system, assessing its research performance, the level of academic autonomy achieved so far, dominant governing and funding models.

3.3.1 Quality of National Higher Education System

In 2008, latest year available, there were 2,252 universities (253 federal, state, municipal and private), university centres and faculties. In 2009, there were 59 public federal universities operating more than 230 campuses. The majority of the research is executed at universities, which employ 57% of the researchers and 93% of doctorate holders. In 2008, the number of tertiary-level students (5,080,056) as a share of the population (189,613,000) was 2.68%. The preferred studies were: Social Sciences, Business and Law (42.6%), Education (16.2%), Health and Social Services (15.5%), Engineering, Industrial Engineering and Civil Engineering (9.2%) and Science, Mathematics and Computer Science (8.5%).

The majority of higher education students are enrolled in private institutions of higher education, including 131 universities. The majority of them are devoted mainly to teaching.

According to Capes, in 2010 there were 88,300 students enrolled in master programmes and 52,700 enrolled in a doctorate programme. Most of those are enrolled in public universities. In 2009, 11,368 PhD degrees (10,700 in 2008) and 38,800 master degrees (36,000 in 2008) were awarded.


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Institutional funding for public federal universities is provided by the Ministry of Education in its budget. Funding for graduate study programmes in public (federal and state universities), which account for over 80% of courses, and in private universities are provided by MEC’s agency CAPES through both competitive and block funds. The latter is distributed according to evaluations made every three years of the more than 4,000 graduate courses (master and doctorate level) in terms of mission, faculty, student body, social insertion, dissertations, thesis and intellectual production.

HERD as a share of GDP increased from 0.28% in 2003 to 0.33% in 2009. In 2009 it reached €4,278m. 57.1% were distributed among public federal institutions, 35.8% went to public state institutions 7.1% was allocated to private institutions. Altogether universities account for 50-60% of R&D performance in Brazil. They are mainly publicly funded. Private sector funding has been growing in recent years, albeit from a relatively small volume and financial base. Business expenditures on post- graduate education doubled between 2005 and 2009, from €149.8m to €303.2m.

In 2008, according to Inep/MEC, 800,318 students were graduated at tertiary level. This represents 16% of the students enrolled in that year.

Research is predominantly performed at public universities. Well known examples are the University of São Paulo USP and the University of Campinas UNICAMP, both in the state of São Paulo; the UFRGS in Rio Grande do Sul, the UFSC in Santa Catarina, and the UFMG in Minas Gerais and the University of Brasilia UnB in the Federal District.

Research is conducted among a few private universities, in particular in confessional ones. The Pontifical Catholic University of Rio de Janeiro (PUC Rio) is the country's most important private research university.

Very few of the research universities have embraced the third way, that is to become more entrepreneurial and geared to innovation. In some universities some department and areas have developed stronger linkages with industry, as for example in the case of oil and gas exploration, where the leading state company Petrobrás has developed strong ties with both the federal university UFRJ, (particularly with its engineering graduate programme COPPE in ocean and platform engineering), as well as with PUC Rio (particularly in the area of computer graphics). Over the last few years, due to government university-industry research promotion programmes, the expansion of Petrobrás university cooperative programme as well as the entry of several other large, national and multinational, firms (Vale, CSN, Braskem, Oxiteno and Natura among others) and government incentives for universities to become more innovation-oriented, the number of research universities actively involved in science and technology transfer has increased.

There are no Brazilian universities in the 2010 Shanghai top 100 HE index. The first Brazilian university to appear in the 101-150 ranking is the University of São Paulo. It is also the only one to appear in any of the top 100 area rankings, in the 76-100 range in Clinical Medicine and Pharmacy.

A 2008 ranking of the top 10 higher education institutions by INEP, an education research unit of Brazil’s Ministry of Education included nine public federal institutions and one private: the universities ranked as following: Universidade Federal de São Paulo (Unifesp), Universidade Federal de Ciências da Saúde de Porto Alegre (UFCSPA), Universidade Federal de Viçosa (UFV), Universidade Federal de Minas Gerais (UFMG), Universidade Federal do Rio Grande do Sul (UFRGS), Universidade


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Federal do Triângulo Mineiro (UFTM), Universidade Federal do Rio de Janeiro (UFRJ), Universidade Federal de São Carlos (UFSCar), Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), and Universidade Federal de Itajubá (Unifei).

3.3.2 Academic autonomy

Public universities have full autonomy in research, including the capacity to autonomously design research agendas and topics of research specialisation. In regard to management of research budgets and on hiring personnel, public universities depend on the relevant authority in the federal government (Ministry of Education, MEC) or in the state government. Generally the governing model adopted by universities is the University Council.

Members of the governing body of the public universities are selected from within the university. Private universities may have an additional governing body that sets out broad strategic orientations with members external to the institution (from business, government and private non-profit sectors). Rectors/Deans in public universities must be elected by peers and top ranked names are submitted to the relevant authority, i.e. the Minister of Education, who usually validates electoral top choice, for nomination.

3.3.3 Academic funding

Public universities are funded through budgetary appropriations, mainly for payment of professors’ salaries. Along with a handful of private research universities, they also receive block funding for graduate and undergraduate scholarships on the basis of performance assessments (mainly based on bibliometric indicators diplomas/graduate degrees granted). Public competitive funding is available for infrastructures and research projects at the institutional as well as at the research unit level. Universities – by and large - make decisions for allocating resources autonomously in line with their research units’ priorities and financial capacity obtained through competitive grants. Due to a high level of variability from one university to the other in terms of the amounts of academic block funding and competitive grants and their annual changes, it is difficult to calculate shares for each of the funding modes. Official data, in this respect, is not available.

3.4 Knowledge transfer

This section will assess the national policy efforts aimed to promote the national and trans-national public-private knowledge transfer.

3.4.1 Intellectual Property Policies

Compared to North America, the average university in Brazil generates far fewer inventions and patents. This is largely due to a less systematic and professional management of knowledge and intellectual property (IP) by them. Additionally, the efficient knowledge transfer in Brazilian-European research institutions is hindered by a range of factors, including: cultural differences between the business and science communities, lack of adequate incentives, legal barriers as well as underdeveloped and fragmented markets for knowledge and technology.

At most public federal universities which have established sharing rules on revenues of IP ownership of research results and associated IP rights, the inventors receive 1/3 and the university 2/3. The latter is split half in order to finance the IP processing and


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administrative costs and the other half will be allocated to the department of the inventing research unit.

The 2005 Innovation Law and subsequent modifications supported the creation of Knowledge Transfer Office (KTO) at universities (Núcleo de Transferência de Tecnologia NIT) and created the possibility for federal public academic researchers to establish a start-up firm without losing institutional tie and public employee retirement benefits. In 2006, MCTI supported the creation of the National Forum of KTO Managers (Fórum Nacional de Gestores de Inovação e Transferência de Tecnologia FORTEC). Then, MCTI established the Working Group on IP (Grupo de Assessoramento Interno de Propriedade Intelectual GTA-PI) to promote a uniform institutional IP culture in articulation with the Inter-Ministerial IP Group (Grupo Interministerial de Propriedade Intelectual GIPI) and the Inter-Ministerial Commission on the Innovation Law Framework. Further, the PACTI Pro-Inova programme reinforced the commitment to the expansion and strengthening of KTOs.

Monitoring and reporting of Knowledge Transfer activities is carried out by the MCTI. Public research institutions with KTOs have the legal obligation to provide information to the MCTI on their patenting and licensing activities annually. For the few private ones which receive support this is voluntary. In 2008, of the 101 institutions that provided patenting information (82 public and 19 private) to MCTI, 67 had filed for patents (1,021 patents filled in Brazil (INPI) – versus 767 in 2007- and 112 patents filed abroad (not specified where) – versus 93 in 2007) and 31 had been granted patents (146 in Brazil – versus 122 in 2007 - and 21 abroad – versus 10 in 2007).

In March 2009, FINEP made a R$ 10m (€4.0m) call to support Technological Innovation Nuclei (ILO/TTO or NIT in Portuguese) at public universities/research centres which funded 8 projects involving 73 institutions. In 2008, a R$10m (€4.0m) call for the implementation, structuring and consolidation of regional and state-level NITs approved 8 projects involving 64 institutions. In that year there were 81 NITs, distributed in 64 public and 17 private institutions (institutions that provided information to MCTI in 2009). However estimates point to the existence of 140 NITs. In general, the support system for facilitating knowledge transfer has improved over the past few years due to the creation and evolution of KTOs which, however, are still poorly staffed.

3.4.2 Other policy measures aiming to promote public-private knowledge transfer

Since 2009, the First Enterprise programme (PRIME) is supporting the creation of university spinoffs. It awards locally competitive milestone-based small grants of up to R$200,000 (€96,552) to start-ups. It is implemented in a decentralised manner by anchor incubators that were selected through a competitive call; this leads to a local network of agents. The PRIME programme has benefited 1,381 start-ups up to 2010. Private support systems for the early development of university spin-offs in form of venture capital and business angels are still widely lacking. There is no public support to business angel group formation. For the moment, there are only two formal groups operating and two existing public seed capital funds target well above the financial needs of university spin-offs.

In terms of inter-sectorial mobility, this is generally low. While public researchers cannot move easily between the public and private sectors, many professors provide consulting to business firms, mostly large ones.


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The interaction between research institutions and SMEs is improving thanks to the Sibratec programme discussed in 2.2.1. Similarly, the support for incubators and more recently for technological parks, has continued to increase.

An involvement of the business sector in the governance of universities and PROs is non-existent in the public sector. There are a few exceptions in private research universities, where representatives from the private sector can join the university boards.

3.5 Cooperation, coordination and opening up national research programmes with the EU

This section assesses the effectiveness of national policy efforts aiming to improve the coordination of policies and policy instruments across the EU.

3.5.1 National participation in intergovernmental organisations and schemes

In the last few years, cooperative programmes with the Mercosur countries have multiplied and expanded with the creation of cooperative network-based research centres in biotechnology and nanotechnology and joint programmes in renewable energy, space and nuclear technology.

3.5.2 Bi- and multilateral RDI agreements with EU countries

In recent years, Brazil has evolved and strengthened multiple bilateral cooperation agreements in STI with ERA countries. For example, the cooperation between Brazil and Germany is based on a 1969 general agreement which expanded over the years to include in 2009 genomics and nanotechnology. Nowadays MCTI and its agencies provide R$20m (€14.0m) in funds for these cooperation programmes, the majority for the Amazon High Tower Observatory programme. Other Brazilian thematic research programmes with German participation include areas of manufacturing technology, marine sciences and water resource mitigation in the North-East.

Current CNPq international bilateral cooperation comprises 42 joint projects with 24 countries, among those several ERA countries. They comprise, for example, bioenergy with Finland, biofuels with the European Union; and several projects with France’s International Associated Laboratories (i.e., CNRS: engineering, materials, nanotechnology, and chemistry; with INSERM: biomedical and health sciences). CNPq maintains also collaborative research mobility programmes with the United States - Bilateral Call nº 15/2009, CNPq/National Science Foundation in several natural sciences, life sciences and engineering and Argentina (Call nº 10/2008 with 12 projects approved in nanotechnology, engineering and health. Capes/MEC also has several research mobility programmes, mainly with Mercosur countries, in particular Argentina (see section 2.5.2).

In 2009, an international centre (Fundação Centro Internacional de Educação, Capacitação e Pesquisa Aplicada em Águas – HidroEx) to train, research and develop solutions for the sustainable management of water resources was created.

3.5.3 Other instruments of cooperation and coordination between national R&D programmes

Brazil participates in the 2006-2010 Mercosur Science and Technology Framework Programme, under the Specialized Meeting on Science and Technology of


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MERCOSUR (RECyT), established in 1998. The MERCOSUR Framework Programme 2006-2010 aims to establish the MERCOSUR Science, Technology and Innovation Area. Its partners make efforts to identify multiple funding sources and explore the use of resources from the Mercosur Structural Convergence Fund. RECyT takes part in Mercosur international agreement negotiations, including those with the European Union on science and technology issues. Among RECyT’s most important initiatives are the annual Mercosur S&T Award (since 1997), the biotechnology research and industry information platform BIOTECSUR (a product of the BIOTECH - MERCOSUR – EU project) and the Digital Mercosur programme, aimed at the promotion of MERCOSUR-EU common policies and strategies in the area of Information Society and at reducing asymmetries in the field of ICT. The programme is part of the 2007-2013 Mercosur cooperation regional strategy of the European Commission and calls for a total investment of €9.6m (the majority provided by the European Commission).

3.5.4 Opening up of national R&D programmes

Current national programmes are not open for third country researchers. However, there is a noticeable increase in the number of calls on national thematic network-based research programmes which either require or strongly encourage the participation of third country researchers.

3.6 International science and technology cooperation

3.6.1 International cooperation (beyond EU)

No explicit national RDI policy measure has had a specific eye toward strengthening the international cooperation in S&T. International cooperation in form of multilateral and bilateral agreements have grown in recent years partly due to Brazil’s growing domestic market and role on key global issues as environment and renewable energy. Yet, increase in international S&T co-operation is a priority goal of PACTI. A total budget of €30m was programmed over the four-year period. Within PACTI, the Agrobusiness RDI strategic area has a programme for international interactions for the advancement of STI. It comprises support to the public agricultural research firm Embrapa Virtual Foreign Laboratories Labex, including one lab in Agropolis (Montpellier, France) and Wageningen University (The Netherlands). Thematic cooperation in strategic areas has been established with the United States and the European Union on biofuels; with Canada on renewable energy; and with China, France, the United Kingdom and Ukraine in space technology.

For example, between 2006 and 2010, in the framework of the Biotechnology Competitiveness Programme, the Brazil-Argentina Biotechnology Centre (CBAB) funded 133 courses for 1,730 Brazilian, Argentinean and other Latin-American students and 29 joint projects with Brazilian and Argentinean research institutions.

Further, among Brazil’s several multilateral STI cooperation programmes there are a few with the involvement of ERA countries: CERN Switzerland; European Union and Pierre Auger Observatory (Argentina); and thematic programmes on Atlantic Forest (Germany) and Marine Sciences.


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3.6.2 Mobility schemes for researchers from third countries

There are no such schemes in place at this time. However, as noted in section 3.1.1, the Brazilian Academy of Sciences has recently made calls to the government to encourage the immigration of foreign young researchers to Brazil.


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4 CONCLUSIONS

4.1 Effectiveness of the knowledge triangle Whereas most of the components of the knowledge triangle in Brazil have been put in place over the past few years, the quality and capability of each vary widely and institutional incentives to generate meaningful and sustainable relationships among them are still lacking. Thus, despite significant increases in funding and considerable structural expansion, effectiveness is still limited. Research funding at all levels is allocated on a competitive basis. Similarly, projects are mostly selected on the basis of the quality of proposals and subject to external peer review, although in a few sub-areas with limited research community size, a bias may be encountered in the process. Furthermore, the political rule that a share of research and innovation funds be allocated to underdeveloped geographic regions within the country, could introduce competitive distortions and constrain the full development of a smaller number of large scale innovative regions. Both overall public investment in research and innovation are growing in a predictable manner. Despite budgetary cuts at the beginning of 2011, policy related programmes are designed and based on a multi-annual strategy. Governance structures however are still fragile and ill-equipped to monitor, fine-tune and evaluate programmes. There is an inter-ministerial bureaucratic competition, with diverse and often divergent programmatic priorities (MCTI; MEC; MDIC) often vying for area leadership. Overlapping coordination governance organisations (ABDI/MDIC; BNDES/MDIC; MCTI; MEC) further impair its effectiveness. A seemingly adjusted institutional division of labour among the policy areas of research (CNPq/MCTI; Finep/MCTI), education (Capes/MEC and CNPq/MCTI) and innovation (Finep/MCTI; BNDES/MDIC) preserves a stability at the cost of weak, arms-length relations among areas.

Table 3: Effectiveness of knowledge triangle policies

Recent policy changes Assessment of strengths and weaknesses

Research policy Increase in research financial resources and growth of network-based research programmes.

Emerging decentralisation of research planning and funding to state research foundations.

Expansion in scope of mandatory research programmes funding to less-developed region resource expenditures.

Strength: increased volume of research and possibility of establishing new research groups. Weakness: first funded networks become closed networks and hamper development of emerging groups. Established research groups become complacent. Strength: increase in capillarity and scope of research programmes; discovery of new talent. Weakness: many state research foundations do not have expertise and human resource capacity to select researchers and groups, much less so to monitor their evolution. Strength: broader geographic coverage of research programmes. Weakness: weak research groups get funded without corresponding productive results.


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Innovation policy Emerging cooperation with leading trade business associations and other research institute associations to strengthen innovation policy implementation and validate policy instrument design.

Major new institutional financing actors and emergence of multiple new financing sources; rapid expansion of innovation grants.

Strength: Enhances effectiveness of research triangle as it allows for better communication among heterogeneous actors. Weaknesses: Fragmented or overly consensual policy statements and catch-all policy and instruments; special interests policy mechanisms. Strengths: more financial resources for innovation. Weaknesses: firms have difficulties in identifying adequate financing sources; excessive finance and innovation grants crowd-out development of private early stage venture capital sources (e.g., business angel investment).

Education policy Continued expansion of federal public higher education system; expansion of undergraduate scholarship programme for low-income students, in both public and private higher education institutions.

Strengths: more opportunities for free higher education to low-income middle school graduates. Weaknesses: Many public university seats remain vacant for lack of demand, partly due to strong demand for new employees (economy growth remains strong); and private sector higher education, which accounts for majority of enrolment, continues to face academic quality issues.

Other policies A STI long-term policy PACTI II for the period 2011-2014 is under elaboration by MCTI, alongside a new industrial policy PDP II for the same period by MDIC and ministerial partners.

Strengths: Policy continuity and continued programme expansion; and enhancement of research excellence and RDI internationalisation with attraction of foreign corporate R&D centres and expansion of foreign scholarships for top universities. Weaknesses: Planned repatriation of Brazilian researchers may reverse internationalisation; Finep’s drive to become a financial institution may sacrifice research volume and project scale for quality and sustainable cooperative networks.

4.2 Comparison with ERA 2020 objectives - a summary The Brazilian government is continuing to pursue a growth strategy for research, to recast the importance of education and training and targeting their scaling up, and to enhance the role of innovation in economic, and lately, social development. Efforts have been pursued to strengthen the individual components of the knowledge triangle but clear incentives to promote sustainable relationships are still lacking. Research and innovation strategic priorities are set both from bottom-up research orientations top-down from large firms, declining sectors' demand as well as short-term trade balance concerns. Research infrastructure is good in some universities and research institutes and there is a shortage of qualified human resources in some industrial segments. Policy design is rather intuitive than based on empirical evidence and analysis. Policy instruments are increasingly being fine-tuned, but initial design errors often compromise these efforts.


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Table 4: Assessment of the national policies/measures which correspond to ERA objectives

ERA objectives Main policy changes

Assessment of national strengths and weaknesses

1 Ensure an adequate supply of human resources for research and an open, attractive and competitive labour market for male and female researchers

- Continued increase in domestic scholarships (resources in R$ doubled in real terms between 2007 and 2010) and an expressed intention to renewed and significant expansion of foreign scholarships; - National Education Plan 2011-2020, in Congress, has as one of its 20 goals to increase the share of 18-24 enrolments in universities from 10% in 2010 to 30% in 2020.

- Highly inadequate supply of engineers to some segments and missing private demand for science & engineering high-level trained personnel. - National Education Plan’s approval has been stuck in Congress; experts call it overambitious and lacking financially targets; enrolment in 87 federal public universities will double, sacrificing quality.

2 Increase public support for research

- Public budget for R&D increased in nominal value from € 7,594.0m in 2007 to. € 11,270.2m in 2009; as share of GDP, it increased from reached 0.74% in 2007 to 0.89% in 2009.

High levels of R&D expenditure were unaffected by 2008-2009 crisis, but will be slightly affected by the early 2011 budget crisis.

3 Increase coordination and integration of research funding

- Continued support for and multiplication of Mercosur joint research programmes is accompanied by Latin American drive (i.e., creation of Latin American university in Foz do Iguaçu) and expansion of EU thematic cooperation programmes (biofuels).

Following Brazil’s regional foreign policy strategic trend, Latin American educational initiatives compete with Mercosur ones; overall research internationalisation policy reactive and reluctant towards effective strategic integration and in a way, too inward looking.

4 Enhance research capacity Strengthening of bilateral and multilateral research and training facilities

Key medium term strategic areas such as nanotechnology.

5 Develop world-class research infrastructures (including e-infrastructures) and ensure access to them

Increased funding of research infrastructure and support to national research institutes (INCT); enhancement of research high-speed network; new PACTI discussions mention multi-user national labs.

Emphasis on national research networks use of facilities for correcting research capacity; imbalance over international world class networks.

6 Strengthen research institutions, including notably universities

Strong funding for university and research institutes’ infrastructure, renovation, and expansion.

Risk of research overcapacity in smaller universities.

7 Improve framework conditions for private investment in R&D

New S&T ministerial team issued a discussion paper on innovation framework; New PACTI I development cites enhancement of legal framework for fiscal incentives and promotes

Limited scope of fiscal incentives; reluctance of private firms to increase R&D expenditures and SMEs lack of innovation capacity and motivation continues to worry policymakers.


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new competencies, and revamping of framework for technological parks and incubators.

8 Promote public-private cooperation and knowledge transfer

Strengthening of TTOs and diffusion of IP best practices.

TTO human resources with limited knowledge transfer capability and experience; relative organizational isolation of TTOs.

9 Enhance knowledge circulation

Renewed efforts to increase Brazilian organizations participation in EU initiatives.

Domestic organizations have little incentive to engage in EU initiatives: firms because of strong domestic market and research organizations and universities because of large and diverse availability of funds.

10 Strengthen international cooperation in science and technology

Multiplication of bilateral S&T agreements; deepening of strategic areas in some agreements.

No clear international cooperation strategy and no planned integration with national priorities and goals.

11 Jointly design and coordinate policies across policy levels and policy areas, notably within the knowledge triangle

Except for Mercosur biotechnology platform, no major changes

On-going realignment of Brazilian foreign policy will constrain any development in this direction.

12 Develop and sustain excellence and overall quality of research

INCT programme. Fragmentation, regional policy and rapid graduate education expansion may hamper sustainability of excellence.

13 Promote structural change and specialisation towards a more knowledge - intensive economy

Effort in microelectronics (CIETEC state company); use of domestic market as enticement for local production of components.

Import-substitution policy risks failure due to rapid technological change and lack of large scale local capabilities and sustained demand.

14 Mobilise research to address major societal challenges and contribute to sustainable development

PACTI under discussion cites promotion of a ‘green economy’, to combat poverty and social inequality, as one of its four drivers.

Previous STI social development programmes became politicized in Congress, that is, focus of Congressional amendments to serve local interests (so-called pork and barrel politics).

15 Build mutual trust between science and society and strengthen scientific evidence for policy making

-Business Movement for Innovation and National STI week; multiplication of empirical studies that generate hard evidence for policy making and sets arena for debate.

Scientific evidence for policy making still limited and underutilized; government-led studies and programme self-assessments introduces bias and raises credibility issue.


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References

Botelho, Antonio (2011). Erawatch Network Research Inventory Brazil Country Fiche 2011. Innovastrat Consultoria.

Conselho Consultivo da RENE (2010). Plano de ação em C,T&I 2007-2010 - Balanço sintético. Recife, 17 de dezembro de 2010. Power Point presentation.

Elias, Luis Antonio Rodrigues (no date). Science, Technology and Innovation for National Development Action Plan 2007 – 2010. Deputy Ministry. Ministério da Ciência e Tecnologia. Power Point presentation.

FINEP (2011). A Finep no Século XXI. Financiadora de Estudos e Projetos • Janeiro de 2011.

Luis Rabello Fernandes (2010). A Política Nacional de Inovação. Reunião da Mobilização Empresarial pela Inovação. São Paulo, 22 de outubro de 2010. FINEP. Power Point presentation.

Mercadante, Aloizio (2011a). Audiência Pública Ministro de Estado da Ciência e Tecnologia- Senado Federal. Brasília, 4 de maio de 2011. Ministério da Ciência e Tecnologia.

Mercadante, Aloizio (2011b). “A ABC a caminho de seu centenário.” Ministro de Estado da Ciência e Tecnologia. Rio de Janeiro, Academia Brasileira de Ciências – ABC, 3 de maio de 2011. Power Point presentation.

OECD (2010). “Brazil-Country Note” in: Science, Technology and Industry Outlook 2010. Paris. OECD.

Oliva, Glaucius (2009). INSTRUMENTOS DE COOPERAÇÃO INTERNACIONAL NO AMBITO DO CNPq. Reunião das Sociedades e Associações de Física da América Latina. 25 de fevereiro de 2010. Ministério da Ciência e Tecnologia.. Power Point presentation.

PACTI 2007-2010/PDP (no date). Inovação como Agenda Estratégica nas Políticas do MCT. Power Point presentation.

Controladoria-Geral da União (2011). Prestação de Contas do Presidente da República / 2010. Brasília: Controladoria-Geral da União.

Controladoria-Geral da União (2010). Prestação de Contas do Presidente da República / 2009. Brasília: Controladoria-Geral da União.

Sennes, Ricardo (2009). Innovation in Brazil: Public Policies and Business Strategies. Washington DC. Woodrow Wilson Center-Brazil Institute.

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List of Abbreviations

ACS Alcântara Cyclone Space Brazil - Ukraine Bi-national Corporation AEB Brazilian Space Agency (MCTI) ANEEL National Electric Energy Regulatory Agency BASis National Higher Education Evaluation System Database (INEP/MEC) BNDES National Bank for Economic and Social Development CAPES Foundation for Support of Higher Education (MEC) CEA Alcântara Space Centre (MCTI) CEPEL Electric Energy Research Centre (MME) CNEN National Nuclear Energy Commission (MCTI) CONAES Commission of Higher Education Evaluation (INEP/MEC) CNPq National Council for Scientific and Technological Development CONSECTI Conselho Nacional de Secretários Estaduais para Assuntos de

C,T&I CONFAP Conselho Nacional das Fundações de Amparo à Pesquisa CT-Infra Infra-structure sectorial fund EMBRAPA Brazilian Enterprise of Agricultural and Husbandry Research (MAPA) ESF European Social Funds ERDF European regional development fund FAPESP São Paulo state Research Support Foundation FINEP Studies and Projects Financing Agency (MCTI) FIOCRUZ Oswaldo Cruz Foundation (MS) FNDCT National Fund for Science and Technology Deevelopment FP European Framework Programme for Research and Technology

Development HEI Higher education institutions HES Higher education sector IES Higher Education Institutions INCT National Science and Technology Institutes INEP National Institute of Pedagogical Studies Anísio Teixeira (MEC) MAPA Ministry of Agriculture, Husbandry and Supply MCTI Ministry of Science, Technology and Innovation MD Ministry of Defence MDIC Ministry of Development, Industry and Foreign Trade MME Ministry of Mining and Energy MEC Ministry of Education MINICOM Ministry of Communications MPOG Ministry of Planning, Budget and Management MS Ministry of Health OEPA State Organisation for Agricultural Research PAC Programme of Growth Acceleration


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PACTI Action Plan in Science, Technology and Innovation for National Development , 2008-2010

PAPPE Programme for Support of Research in Enterprises PDA Plano de Desenvolvimento da Agropecuária PDE Plano de Desenvolvimento da Educação PDP Productive Development Policy PRIME First Innovative Firm Programme (FINEP/MCTI) PRO Public Research Organisation Proinfra S&T Institutes Modernization Programme (CT-Infra/FINEP/MCTI) R&D Research and development RHAE Strategic Activities Human Resources Training (CNPq/MCTI) SF Structural Funds SINAES National Higher Education Evaluation System (INEP/MEC) SNPG National Graduate Education Programme (CAPES/MEC) S&T Science and technology STI Science, technology and innovation TTO Technology transfer office UFRJ Federal University of Rio de Janeiro USP University of São Paulo UNICAMP State University of Campinas (São Paulo)

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