President’s Corner

Implications of the Brazilian Development Experience for Kenya

Mariza Almeida
Vice President
Triple Helix Association
Professor at Federal University of the State of Rio de Janeiro
Brazil
*email address protected*

Innovation can make a difference in developing countries although sometimes the innovation climates in these countries can be difficult, characterized by low educational levels, poor infrastructure, and lack of experience in promote innovation policies.

Based on the successful experiences of some developed countries in promoting innovation policies, many have been engaged in copying similar experiences.  However the effects on the countries’ economies are different, due to their specific conditions, including the consequences of economic and political circumstances, priorities, education levels, and impact of the global market.

Nevertheless, the design and implementation of innovation policies in developing countries has been a challenge since the specific characteristics of their national innovation systems makes it difficult to transfer lessons from one country to another.  This is due to: 1) the components of the system, related competences
and capabilities of the organizations within the system, a weak institutional framework and weak level of interaction; or 2) dynamics of the system arising from new capabilities, required by firms and institutions, that are not yet available in the system (Chaminade et al., 2013).

Taking into account the above mentioned aspects, it can be interesting to reflect on a recent Brazilian experience in conducting an innovation policy, with their positive and negative outcomes.  The main concern of the federal government in launching the policies for stimulating innovation, was Brazil’s economic dependence on natural resources, mining and agriculture, and a foreign trade deficit.

Between 2003 and 2015, three development policies were implemented in Brazil.  The first was the Industrial, Technology and Foreign Trade Policy (PITCE) from 2003-2006, and the second was the Production Development Policy (PDP), covering the period 2007-2010, which was followed by the Greater Brazil Plan from 2008-2011.  The principal characteristic of these plans was a combination of innovation, trade and industrial policies.

The fact that the above policies were established in recent years, has led to a difficulty in evaluating the results and impact, since they relate to the phenomena of an inherently long-term nature; and the traditional indicators, such as percentage of GPD devoted to S&T, and number of patents, doesn’t allow us to explain the internal changes arising from the implementation of the innovation policies.  For this reason four other indicators were added to stress the changes in the internal context due to innovation.

Major trends resulting from innovation policy that have emerged after fifteen years of implementation are as follows.  These incorporate actions encompassing the government, industry, and university, and reflect the changes during this period of experimentation:

  1. The increase of the resources for S, T & I from 0.96% of GDP in 2004 to 1.24% of GDP in 2013 (MCTI, 2015).  The stronger growth accentuated the proportional difference between public investment and the private sector, with the former growing faster than the latter.  In 2013 these reached 0.71% and 0.52%, respectively, due to the innovation support policies.
  2. The number of patent applications in Brazil by residents and non-residents has increased since the implementation of the innovation policies.
  3. The new legal framework includes a set of laws proposed by the federal government and approved by Congress that completely changed the legal environment relating to innovation, university-industry cooperation and company R&D.  The first was the Innovation Law, which the government proposed in 2000 but was only approved by Congress in 2004, and regulated in 2005.  Subsequently, other laws were approved, like tax incentives for R&D, public procurement and research in specific areas, like stem cells.  The states also began to propose and approve their own state laws in support of innovation, addressing local problems and other specifics related to the economic context.
  4. New instruments to support innovation policies have been created over the years that have enabled federal and regional agencies to implement the policies.  Some of them were connected with financial support for innovation in different formats: tax incentives for R&D, direct support to R&D and innovation in firms; stimulus to create a venture capital industry in the country, etc.
  5. The increasing role of SMEs in supporting and implementing innovations is a consequence of the innovation policies; whereas previously R&D in the Brazilian production sector was concentrated in state-owned companies within strategic sectors, while the majority of the companies were characterized by a very low level of sophistication, technology intensity and R&D investment.  In recent years, a total of 3,949 companies have received direct financial support from federal and state agencies to develop
    innovation in products, services and processes in different industries.  From this total, 2,767 are small, 173 medium, 138 large, while for 871 there is no information about the size.
  6. The transformation of universities due to technology-based entrepreneurship, and indeed the transformation towards entrepreneurial universities are increasingly seen as an important element of regional competitiveness (Etzkowitz and Leydesdorf, 2000).  This has been taken into consideration in the Brazilian innovation policy.  Following the approval of the Innovation Law, various activities were conducted in universities to promote entrepreneurship, innovation, patenting and the creation of spin-offs.  According to the annual report from the Ministry of Science Technology and Innovation, Intellectual Property Policy of Brazil’s Scientific and Technological Institutions (Formict), published in 2015 and covering the 2014 activities, it showed that the number of Technology Transfer Offices (TTOs) increased from 94 in 2010 to 180 in 2014.  The number of patent applications from universities increased by 96.57% with a total of 5,081 in the period 2003-2014.  There was also an increase in technology university-companies contracts between 2009 and 2014, which were up by 69.13%.

Among the problems identified was the priority to increase the competitiveness of existing sectors, with a focus on commodities; with low emphasis on new areas.  Note that for long-term sustainability, a country should create favorable conditions for achieving mastery in new areas.  From this aspect, it is possible to conclude that for developing countries the greatest difficulty is not in defining the instruments or successfully put these into operation, but in analyzing the context, and the local problems that public policy is intended to address; or expending effort on problems that have been wrongly diagnosed.  This seems to be the major limitation of the innovation policies developed in the country during the period under study.

Related to the learning process of the agencies that operated the innovation policy was the difficulty in the evaluation of the policy in order to assess economic and social impacts on the country.  Nevertheless, the results of some partial studies indicated that there was growth in internal R&D in companies, investments in research, an increase in the number patents, inter-company revenues and participation in foreign markets.  In the case of the universities there has been an enhanced number of patents, partnership with firms, entrepreneurial education and implementation of science parks.

Open opportunities for innovation by our researchers have been driven by the technological needs of developing countries that have been not addressed by institutions of developed countries.  Examples include innovation in agriculture where Embrapa, a state owned company, developed research that has been contributing to agribusiness.  Another important illustration is the work of the institution Fiocruz Foundation that has been studying tropical illness, and in 2015 identified the zika virus that has been an important source for the development of public policy in this area.

Internal conditions in Brazil changed markedly in 2015 due the economic and political crisis that affected the capacity for investment and changed the priorities in public policy, with a decrease of resources for innovation, education and research.  This is contrary to the assertion that an effective innovation policy is crucial for development in the long term.

Nevertheless, given the circumstances, this research contributes to the understanding of the methods for adopting and diffusing an innovation policy in a developing country.  This study can help the organizers of the International Triple Helix Summit on 4-6 April 2016 in Nairobi, Kenya, to think about the opportunity to address local problems by incorporating the Triple Helix model in their public policies encompassing university, industry, and government to reach the sustainable development goals.

References

Chaminade, C, Lundvall, B-Å, Vang, J and Joseph, K J D.  (2011)  Designing innovation policies for development: towards a systemic experimentation-based approach.  In Lundvall, B Å, Joseph, K J, Chaminade, C and Vang, J. (Eds). (2011) Handbook of innovation systems and developing countries: building domestic capabilities in a global setting.  Edward Elgar Publishing.

Etzkowitz, H and Leydesdorff, L.  (2000)  The dynamics of innovation: from National Systems and ‘Mode 2’ to a Triple Helix of university-industry-government relations. Research policy 29(2): 109-123.