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Investments

Discontinuous effort

Scientists and employees protest against the slashing of 23% of federal government spending on science and technology

LARISSA RIBEIROThe leaders of the scientific community and business sector sparked mobilization to pressure the government to review a 23% cut off the Ministry of Science, Technology and Innovation (MCTI) budget announced in January. A manifesto published in Folha de S. Paulo on March 21 criticized the second consecutive year of cuts in resources from the ministry, which lost R$ 1.5 billion of R$ 6.7 billion approved by Congress. The article also showed the impact that reduction will have on companies’ innovation efforts and the development of the country. “Today, Brazil is the sixth largest economy in the world and recognized as a global leading nation. The repeated cuts and resource contingencies for scientific research and innovation are not compatible with the recent government commitment to maintaining Brazil’s leadership status,” states the manifesto signed by the National Industry Confederation (CNI), the São Paulo State Industry Federation (Fiesp), the equivalent in Rio de Janeiro (Firjan), Paraná (Fiep), Bahia (Fieb) and Minas Gerais (MG), the National Research and Development Association of Innovative Companies (Anpei), the National Association of Entities Promoting Innovative Enterprises (Anprotec), and the Brazilian Society for Science Advancement (SBPC), as well as the Brazilian Academy of Sciences (ABC). “In the most innovative countries, investment is the result of significant contributions from both the private and the public sectors. Brazil needs a high rate of innovation to improve its social indices and enhance its scientific and technological development,” stated the document.

The manifesto was the way the entities opened negotiation channels with the government. The SBPC, for example, had already requested a hearing at the Presidential Palace to discuss the cuts, but got response. In February, the Brazilian Physics Society (SBF) and SBPC publicized notes criticizing the cut, which echoed throughout the scientific community and abroad. The journal Nature even published an article on the subject. However, these measures did not provoke a reaction from the government. However, the day after the publication of the manifesto the ministers of Science, Technology and Innovation, Marco Antonio Raupp, and Education, Aloizio Mercadante, called a news conference to respond to criticism. “We were positively confronted by our colleagues in the scientific and business communities on resources for science and technology,” said Raupp, who refuted the entities’ calculations. According to him, some of the government’s investment in innovation is not accounted for in the MCTI budget, for example FINEP’s (the Studies’ and Projects’ Financier, an agency linked to the Ministry) investment portfolio, which will invest an additional R$ 6 billion through the National Bank’s of Social and Economic Development (BNDES) resources.

040-041_Orcamento_194-1The ministers used the opportunity to encourage the business sector to invest more in innovation. “The participation of enterprises from the business sector overall is the major challenge. This is a characteristic of the countries that are growing in this area. All of them experience higher company investment than the support provided by the government,” said Raupp. In 2010, the country invested slightly less than 1.16% of its GDP in research and development (R&D). The private sector’s participation was 0.55% and the government’s, 0.61%, according to the MCTI. The government’s goal of increasing the investment to 2% of GDP therefore depends, in fact, on greater private sector involvement. In countries such as Germany, it accounts for up to two thirds of total investments. It is certain, however, that the federal budget are a setback in terms of reaching this goal. “GDP increased by 3% last year. As there was an overall budget cut, the investment percentage based on GDP will certainly fall as compared to 2010,” says Helena Nader, president of the SBPC. Resources increased during president Lula’s second administration, with a gradual release of money from sector funds, the key science funding source in the country. In 2010, the so-called “contingency” resources reached zero after full implementation of the budget and it was promised that this would continue to be the case. “Instability is one of the worst poisons for the development of a science and technology system,” says Carlos Henrique de Brito Cruz, FAPESP’s scientific director.” In 2003, President Lula promised to take R&D expenditure to 2% of GDP by the end of his first term. In 2006, the expenditure was 1.01% below the 2001 values. In 2007, CT&I’s federal plan reduced the target, announcing that by 2010 the expenditure would reach 1.5%. The MCTI website reports 1.16% of GDP in 2010,” says Brito Cruz.

Luiz Davidovich, physicist, professor at the Federal University of Rio de Janeiro and director of the Brazilian Academy of Sciences, says that although it is early to make a thorough and correct analysis, the situation appears to result from political discontinuity. “Last year’s cuts, which at the time seemed exceptional, are now occurring again. What you see happening today is going in the opposite direction of what we observed with the previous administration,” says Davidovich, one of the organizers of the manifesto. “There seems to be an inconsistency in the science and technology policy. The government will send 100,000 young people on internships abroad within the Science without Borders program. Meanwhile, it is not preparing the ground for them to return. There’s no point sending anyone abroad without strengthening the system in Brazil,” he says.

040-041_Orcamento_194-2The 2011 cuts, of R$ 1.7 billion, affected the National Fund for Scientific and Technological Development (FNDCT). According to the leaders of the scientific community, they slowed down the activities of institutions such as the National Council for Scientific and Technological Development (CNPq), which lost US$ 430 million, and FINEP. “The investments that the country needs are not happening,” says Helen Nader. “What is the National Research Council doing with its major public calls? The overall call sought qualified research projects, but was unable to fulfill the needs of all because of the spending cuts. When I meet small business owners, the complaint is the same in relation to FINEP. And the effect is cumulative. The federal government’s spending cuts signal to the states that the matter isn’t that important. That it’s not a priority,” says Helena Nader, pointing out a divergence between what the government preaches and practices. “I really believe in President Dilma and her sincerity. However, it’s impossible that someone with her line of discourse, who believes in the potential of science and technology for the development of the country, would make a cut that size,” she says. Last year, the SBPC and ABC managed to persuade the government to include scientific, technological and innovation development among the greatest challenges of the next five years. “As president of the SBPC, I felt proud to have taken part in this mobilization, but when a budget cut is needed, spending on science, technology and innovation is seen as an expense rather than as investment in the future.” To Luiz Davidovich, the damage in company-university cooperation can already be seen. “The Green and Yellow Fund, for example, had no new projects,” he said, referring to a funding source managed by FINEP and designed to forge partnerships and promote synergies between the public and the private sectors within the national innovation system.

The business sector rejects the suggestion that it does not strive to innovate. Chairman of the Innovation and Competitiveness Council of FIESP, Rodrigo Loures says that the increase, though modest, of registered innovative companies in IBGE’s most recent Technological Innovation Survey (PINTEC) occurred more as a result of the dynamism of the companies themselves than of any government actions. “Economic studies have already shown that there is a direct relationship between the attitude of governments and business participation in technology investments. Where governments value the science, technology and innovation, there is a positive response from both the university and the private sectors. With the budget cuts, the government shows that it doesn’t prioritize science, technology and innovation as part of a national development strategy. This is extremely worrying,” said Loures. According to him, there is already a reduction in the demand for FINEP programs. “There is skepticism and discouragement among businesses towards public policy. The latter often create critical mass, build momentum, grow the economy and stimulate enthusiasm towards entrepreneurship. All of this is impaired with the budget cuts.” Loures says that, despite the investment increase in the second term of the Lula administration, the funding was never really major. “There have been three years of continuous progress, thanks to the efforts made since 2008. That doesn’t mean that this changed the government’s agenda,” he says. The Council of Science and Technology, which brings together ministers and is headed by the president, has had very few meetings in recent years. “It’s undeniable that Lula emphasized innovation in his speeches, but the Ministry of Finance never took this to heart. There may have been some improvements, but not of a magnitude capable of halting the pace of the country’s deindustrialization,” said Loures. FAPESP’s scientific director, Brito Cruz agrees. “Part of the federal government questions the companies about increased spending on R&D, while another keeps the exchange rate, labor costs and the tax burden at a level that makes the Brazilian business environment hostile to R&D investment,” he says.

040-041_Orcamento_194-3The Anpei executive secretary, Naldo Dantas, confirms that the cuts could jeopardize the effort to transform the Brazilian industry, whose products are of low to medium technology level to a medium-high technology profile. “Companies can’t invest in high risk innovation themselves. Government support is therefore essential for this. Companies were beginning to include projects compatible with grant announcements in their portfolio. These are used to enter into partnerships with universities at the forefront of innovation. It is this type of partnership that is being damaged,” says Das. “With the budget cuts, the government signals that Brazil doesn’t want to work with high risk, in contrast with countries like Germany and Korea,” he says.

The attitude towards science funding in other countries, even among those acutely affected by the international crisis, fuels the scientific community’s indignation. “China, for example, announced to its people a significant increase in resources for basic science in the same event at which the expectation that this year’s growth would be the lowest in recent years was divulged,” says Helen Nader. “Meanwhile, Brazil cut more than a fifth of the MCTI’s resources,” says the SBPC chairman. The president of the Brazilian Physics Society, Celso de Mello, says that there is no scientific or technical justification to support a cut of more than 20%. “The scientific community bewildered and indignant. We’re heading in the opposite direction of the successful countries.” According to Melo, reversing expectations can compromise the growth strategies of Brazilian science. “Researchers in other countries as well as Brazilians living abroad but wanting to work here showed interest. With these cuts in sight, we will be unable to attract talent. Science needs continuity to thrive,” he says.

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