Brazil:
institutional building for
innovation-based development
Glauco Arbix Finep
New Economic Thinking, Teaching and Policy Perspectives:
A Brazilian Perspective within a Global Dialogue
Shaping Financial Institutions for Innovation and Development
Ford Foundation, Minds, BNDES, Banco de Desarrollo de América Latina Rio de Janeiro, November 8th 2011
What is really new?
Primary Product Export Economy Import Substituting Industrialization Lost decades
Source: IBGE 9,5
9,0 8,5 8,0 7,5 7,0 6,5 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0
1901/10 1911/20 1921/30 1931/40 1941/50 1951/60 1961/70 1971/80 1981/90 1991/02 2003/10
The Brazilian Economic Growth
Average rates – Real GDP – 1901/2010
Average 4,65%
Average 7,26%
Average 2,10%
Average 3,98%
4,23 4,24 4,52 4,39
5,90
7,01
6,17
8,63
1,52
3,98
2,41
State New Activism
Source: PNAD – IBGE – 1977-2008
Average Gini
Lowest Gini Index
Gini
Gráfico 2.2a: Evolução da desigualdade na renda familiar per capita no Brasil: Coeficiente de Gini (1977-2007)
0,552 0,559 0,592
0,598 0,600 0,600
0,599 0,602
0,580 0,612 0,615
0,599
0,587 0,623
0,604
0,593 0,594 0,596
0,634
0,589 0,582
0,588
0,593
0,587 0,581
0,566 0,569
0,520 0,550 0,560 0,570 0,580 0,590 0,600 0,610 0,620 0,630 0,640
1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Anos
Coeficiente de Gini
Source: IBGE, 2010.. *Esimate
Valor mínimo do coeficiente de Gini
Valor médio do coeficiente de Gini
20100.52
Lowest Gini Index
Average Gini
Brazil: Inequality reached the lowest level Brazil: Inequality reached the lowest level
in 30 years in 30 years
(Gini Index – 1977-2010) (Gini Index – 1977-2010)
Different quality of economic growth
Brazil is reducing poverty and inequality, and expanding innovative social safety networks.
And its government is playing a more active role in the making of overall policies oriented towards investment, innovation and
competitiveness.
Growth + Job creation + Social policies + Minimum wage + Low inflation
Unique Combination
State action is more market-adjusting than market- dominating.
Since 2003 there is an unprecedented expansion of social benefits targeted at the poorest citizens.
… … that differs from its dirigist predecessor that differs from its dirigist predecessor
2007: Growth Acceleration Program (PAC)
2007: National Plan for S&T
2008: National Plan for Education
The idea of building a national development plan gained momentum
Industrial policy is back again, focused on innovation
2004: Industrial, Technological and Foreign Trade Policy (PITCE)
2008: Productive Development Policy (PDP)
2011: Brazil Maior Plan
Brazilian S&T policy is gradually shifting towards the economy, keeping its focus on enterprises
1. Expansion of the National System of S,T&I 2. Promote innovation in enterprises
3. R&D in strategic areas
4. S&T&I for social development
Fostering innovation in enterprises is one of
S&T National Plan four priorities
Key issue to be resolved:
Innovation and Technology have been
conceived as byproducts of economic growth
rather than requirements for it.
Legacy
1940 - 1980: 1940 - 1980: Development through economic growthDevelopment through economic growth
1990s: 1990s: Development through liberalizationDevelopment through liberalization
2000…: Efforts aim to overcome S&T policy which has never 2000…:
been an engine of growth. Innovation is at center stage.
Recovering stateness:
Recovering stateness:
Public policies have to deal with three categories of institutions Public policies have to deal with three categories of institutions
1.1. TransformativeTransformative: dismantling and leading to points of no return.: dismantling and leading to points of no return.
2.2. CorrectiveCorrective: by reorienting and adapting missions.: by reorienting and adapting missions.
3.3. ConstructiveConstructive: building new institutions.: building new institutions.
Dismantling, Adapting, Constructing Dismantling, Adapting, Constructing
1.1. It started with the It started with the dismantlingdismantling of developmental state of developmental state institutions (most state-owned companies, ISI, and closed institutions (most state-owned companies, ISI, and closed
economy).
economy).
2.2. Institutions have been Institutions have been reorientedreoriented toward new missions toward new missions (MCTI, MDS, BNDES, FINEP and state owned banks).
(MCTI, MDS, BNDES, FINEP and state owned banks).
3.3. Institutions have been Institutions have been createdcreated. .
1990s 2003-2011 Innovation Policies
None
PITCE – 2004
PAC - 2007
PDP – 2008
S&T Plan – 2007-2011
Brazil Maior Plan
New Regulatory Rules Competition Protection Law (1994) Innovation Law (2004)
Lei do Bem, 2005d
Biotechnology security law (2005)
Computer and Software Tech Law New Institutions Regulatory Agencies(9)
Sectoral Funds (14) - CGEE ABDIe
CNDI and CNDESf BNDES & FINEP
main targets Privatization, Exports
Pronex Venture Capital
Economic Subvencion
Inova Brazil
Business Entrepreneurship Fund
Pro-Innovation
Firms Internationalization Program
INCT - National Institutes for S&T (126) New Sectoral Tools New Automotive Regime
Informatics Law
Prominp (Petrobras)
ProSoft (enlarged)
Pro-Pharmaceuticals
Sibratec – National Technology Networks
New Policies, Tools and Institutions (2003-2011)
New Policies, Tools and Institutions (2003-2011)
What does this shift mean for the role of the Brazilian institutions?
The pathway towards a more market and innovation- The pathway towards a more market and innovation-
friendly economy is prepared with more state friendly economy is prepared with more state
intervention.
intervention.
Finep Finep
Is transforming itself into a Financial institution, in order to provide:Is transforming itself into a Financial institution, in order to provide:
more credit + economic subvention + and to manage a more credit + economic subvention + and to manage a
variety of investment in tech-funds (seed & venture K) variety of investment in tech-funds (seed & venture K)
Is supporting a new enterprise social network to foster companies Is supporting a new enterprise social network to foster companies cooperation
cooperation
To pave the road to a more knowledge-intensive based economy To pave the road to a more knowledge-intensive based economy
Finep Priorities Finep Priorities
AEROSPACIAL DEFENCE
ENERGY
PHARMACEUTICALS
GREEN TECHNOLOGIES ICTs
HIGH TECH
INFRASTRUCTURE
Showcase of innovation in green technologies and Showcase of innovation in green technologies and
sustainable development practices sustainable development practices
Rio + 20:
Rio + 20: Green Economy Knowledge Fair Green Economy Knowledge Fair
Finep: Rio + 20 Finep: Rio + 20
US$ 1,5 bi: “Brasil Sustentável” Program (2012-15) US$ 1,5 bi: “Brasil Sustentável” Program (2012-15)
biomass & renewable energybiomass & renewable energy
smart gridssmart grids
climate changeclimate change
urban mobility, materials and constructionurban mobility, materials and construction
solid wastesolid waste
biodiversity & Amazonbiodiversity & Amazon
social technologiessocial technologies
US$ 1,5 bi
