The effort to incorporate innovation into the standard routines of Brazilian companies has gained momentum and networking coordination for ten years, since the advent of the Mobilization for Business Innovation. MEI, a forum organized by the Brazilian National Confederation of Industry (CNI) currently unites more than two hundred corporate CEOs. An assessment of the first decade of this initiative demonstrates tangible results. With an agenda focused on improving laws and public policies, its ongoing work advising companies, and a robust dialogue with authorities and researchers, MEI has succeeded in demonstrating the impact of innovation on competitiveness, while creating an unprecedented platform for collaboration between government and the private sector.
The meetings of the forum’s Leadership Committee, which take place every three months, always include the presence of government authorities. In a meeting at the end of 2017, the heads of the Ministries of Health, Industry and Commerce, and Science, Technology, Innovation, and Communication were all in attendance. “The participation of ministers, executive secretaries, and even the President of the Republic in the leadership meetings signals the government’s recognition of the importance of innovation in Brazil,” says engineer Pedro Wongtschowski, vice president of the board of directors of the Ultra Group, one of the coordinators of MEI since its inception. “Social interaction is important to maintaining a continuing dialogue between the public and private sectors.” The four meetings held in 2017 attracted representatives from 273 companies, and for 179 of these companies, it was the CEO who attended the meeting. Topics discussed included the future of advanced manufacturing, problems in the system for protecting intellectual property, and alternatives for easing cuts in the federal budgets for science, technology, and innovation.
The idea of creating MEI was inspired by the experience of countries such as France, Germany, and the United States, which during the 2000s mobilized their industries around agendas of innovation and competitiveness. One of the ambitions of the Brazilian initiative was to involve business leaders—the importance of innovation had been recognized only by those at mid-management levels, such as those responsible for R&D. It worked. “We started with a small group of 30 to 40 entrepreneurs who did an efficient job of indoctrinating others. This created a virtuous circle, incorporating only people with decision-making power. Today, we reach more than 200 CEOs, who form a club of highly valued relationships, both for the connections that are created among peers and for the influence in the formulation of public policies,” says Rafael Lucchesi, director of education and technology at CNI and director-general of the Brazilian National Service for Industrial Training (SENAI). The Mobilization for Business Innovation, under the coordination of CNI, was created during the management of then-president Armando Monteiro Alves, with the participation of business leaders such as Pedro Wongtschowski, Pedro Passos of Natura, Horacio Lafer Piva from Klabin, Bernardo Gradin, then with Braskem, and Ricardo Pelegrini, head of IBM Latin America, among others.
One of the milestones in MEI’s history was its 2009 manifesto “Innovation: Building the Future,” which proposed greater engagement between government and the private sector in support of innovation, but made it clear that this agenda, although it was in the interest of society as a whole, belongs primarily to companies. “The key idea was that companies are the chief protagonists in fostering innovation because they depend on it for their survival,” says economist Carlos Américo Pacheco, a professor at the University of Campinas (UNICAMP) who advised CNI in drafting the manifesto. “Companies innovate by necessity and innovate in what the market demands of them. They don’t innovate because the government wants them to, or in order to take advantage of knowledge generated by universities.” In the estimation of Pacheco, who is currently the CEO of FAPESP’s Executive Board, MEI succeeded in disseminating its innovation agenda despite the limited advances in putting the agenda into practice at companies. “The economic dynamics of the past few years have slowed things down, but companies’ awareness of the importance of innovation has been much greater.”
The MEI guide, updated four times a year, informs entrepreneurs on available sources of innovation funding
While CNI already maintained a dialogue with the Ministries of Finance and Industry and Commerce, MEI extended this dialogue to include science and technology managers in areas such as intellectual property, financing for innovation, and human resource development. It also moved to eliminate legal obstacles that hinder businesses. One example was the recent regulation of changes in the legal framework on science and technology, approved in 2016 (see Pesquisa FAPESP issue no. 265). The MEI forum, which had actively participated in the original debate on the drafting of the law, produced two proposals to guide the regulation: the first, two years ago, on its own, and the second more recently, in partnership with other business entities. “We helped create proposals that would encourage the use of tools that are common in advanced countries, such as technology bonuses and technology subsidies,” says economist Gianna Sagazio, national superintendent of the Euvaldo Lodi Institute, the innovation director at CNI, and a MEI coordinator. The forum also held discussions with government and legislators on ways to improve the environment for innovation in businesses, which included topics such as reworking the IT Law and tax incentives for startup investments.
In order to promote innovation, MEI has created strategies that range from awarding exemplary businesses and publicizing their practices, to providing information on funding instruments and research institutions capable of establishing good partnerships. One example is MEI Tools, a guide that is updated four times a year and brings together sources and funding programs provided by banks, agencies, and institutions, and provides guidance on how to take advantage of them.
In an initiative fostered by MEI, CNI created technology and innovation institutes, dedicated to supporting the industrial sector. Today, there are 51 SENAI Technology Institutes operating in 17 states, which have already responded to requests from more than 15,000 companies in technical and consulting services, and in performing trials and testing. There are also 21 SENAI Innovation Institutes, which conduct applied research for developing new products, technologies, prototypes, and pilot plants. Each institute is dedicated to a specific field, such as microelectronics, biomass energy, green chemistry, and advanced manufacturing, among others. At the end of last year, there were approximately 200 projects being run at the innovation institutes. Half of them were for large companies, while the other half was divided between medium and small companies and startups. “This structure was discussed at MEI as a major program for increasing industry competitiveness within SENAI,” explains Gianna Sagazio.
The MEI coordinators played a prominent role in the creation of the Brazilian Agency for Industrial Research and Innovation (EMBRAPII), an NGO created in 2014 linked to the Ministry of Science, Technology, Innovation, and Communication (MCTIC). “The executive board of EMBRAPII, which I chair, is formed by other MEI leaders. We participated in every debate regarding the organization’s creation,” says Pedro Wongtschowski. About 340 projects from Brazilian companies have already had access to EMBRAPII’s grant funding to carry out R&D projects in scientific institutions and specialized technologies. The funding model is tripartite. The proposing company and EMBRAPII invest equivalent amounts in the project. The third pillar is the accredited research units, made up of teams linked to university laboratories or technological institutions (see Pesquisa FAPESP issue no. 260). The president of EMBRAPII, Jorge Guimarães, recalls that the idea of creating an “EMBRAPA [the Brazilian Agricultural Research Corporation] for industry” was proposed in 2010 in a study delivered by the Coordination for the Improvement of Higher Education Personnel (CAPES) to the Brazilian Society of Physics. “CNI and other institutions linked to innovation embraced the idea and helped persuade the government to implement it. The resources for an EMBRAPII pilot program came from a partnership between FINEP [Funding Authority for Studies and Projects] and CNI,” he says. The organization’s headquarters in Brasília work out of CNI facilities, rent-free.
In 2015, CNI consulted large and medium-sized companies about their level of innovation and asked which countries they used as markers for assessing the future. The results helped MEI organize a program, called Immersion in Innovation Ecosystems, which gives entrepreneurs and executives a chance to experience innovative companies and research centers abroad—as well as those in Brazil. Created in 2016, the program has already facilitated trips to countries such as Germany, Sweden, and the United States. More than one hundred people participated in the program last year. One phase of the program took place in Brazil and took participants to SENAI Innovation Institutes and EMBRAPII research units in cities such as Porto Alegre, Joinville, Curitiba, Rio de Janeiro, and Salvador. The other two were overseas trips. In September, a group of twenty-five entrepreneurs spent four days in the United States and were given technical tours of companies such as Cisco, Google, and Intel, and institutions such as the Stanford Research Institute and Lawrence Livermore National Laboratory in California. And in October they went to Sweden, carrying out a tour of visits to technology parks and companies such as Saab and the startup accelerator Epicenter. “Several participants reported that the experience is transformative, and helped them gain new insights on how to work on innovation,” explains Ricardo Pelegrini, the program’s organizer, former president of IBM Brazil, and one of MEI’s executives.
Document with recommendations for strengthening engineering education is being evaluated by the National Education Council
Before running the immersion program, Pelegrini had been invited to coordinate CNI’s initiative to attract research centers from multinational corporations to Brazil. The mission drew on his background—seven years ago he succeeded in bringing IBM’s ninth international research center to Brazil, which had been contested by 70 countries. “When they were down to just two competitors, Australia and the United Arab Emirates, I went to IBM headquarters to defend Brazil’s candidacy and used the example of MEI to show that there was a growing focus on innovation in Brazil and an awareness of the importance of innovating.” Two vice presidents from IBM came to Brazil to see some research institutions, including FAPESP. “The fact that there’s a foundation in São Paulo with a structure complementary to the federal financing of science and technology helped in forming a positive image of the country,” says Pelegrini.
To encourage debate on innovation, MEI incentivizes the production of studies and statistics. A study conducted for CNI by economists from the Federal University of Rio de Janeiro (UFRJ) and UNICAMP will conclude this month, with the objective of evaluating the impacts of emerging technologies on the competitiveness of Brazilian industry over the next 10 years (see Pesquisa FAPESP issue no. 264). The Industry 2027 project was a recurring theme at MEI’s leadership meetings last year. Another highlight was the partnership signed with the organizations responsible for the Global Innovation Index (GII), which will allow Brazil to participate in the creation of the report’s indicators. In the ranking that assesses the level of innovation in 140 countries, Brazil appears in 69th place, behind other emerging economies such as India and China (see Pesquisa FAPESP issue no. 257). “This position isn’t compatible with our place as the world’s eighth largest economy. Our participation in the index will help us to better understand our deficiencies,” says Gianna Sagazio.
A concern for the lack of human resources being groomed for innovation led MEI to link with the Brazilian Association of Engineering Education (ABENGE) in drafting a document with recommendations for strengthening the training of engineers. The document proposes changes in curricula and teaching methodologies, in addition to measures to improve the quality of teaching staff. The proposal was submitted to the National Education Council. “The people who make innovation happen in businesses are the engineers,” says Vanderli Fava de Oliveira, a professor at the Federal University of Juiz de Fora and president of ABENGE, which unites the country’s engineering schools.
The number of engineers educated in Brazil has grown significantly in recent years—from 25,000 in the year 2000 to 100,000 in 2016. One MEI and ABENGE working group made recommendations that focus on the need for training high-level professionals. “A sizeable portion of engineering programs are private and don’t have the same quality as those in public universities,” explains Oliveira. “One necessary change for educating more highly trained engineers will be the creation of a residency system that places students in businesses, similar to the medical education system.” The joint submission gave more substance to the proposal, he believes: “The document has the viewpoint of those who train the engineers, and the viewpoint of those who need the engineering manpower.”
Andre Clark, president and CEO of Siemens Brazil and one of MEI’s leaders, believes that the program tends to play an important role in the creation of new industrial policies. “The forum has helped coordinate elements of state policies, knowledge generated in academia, and business strategies,” he says. “Now it’s necessary to increase industry’s potential for innovation, and MEI proposes to discuss this in an even-handed manner, without defending benefits for specific sectors or protectionism, but improving the environment for everyone.” For Pedro Wongtschowski, one of the challenges MEI faces is to help put in practice the changes made possible by the recent innovation legislation. “With the reduction of federal science and technology budgets, we also have the task of proposing new ways of financing innovation that will revive the investment capacity of key agencies like FINEP,” he says.