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Sector Funds

Model of success

FAPESP's PIPE will be a benchmark for the MCT's programs for business innovation

The Ministry of Science and Technology (MCT) is going to sign an agreement with the Research Support Foundations (FAPs) to implant business innovation programs in the states. Financed with money from the 14 sectorial funds created to foster research and development, the programs are going to receive an identical contribution from the FAPs. “The idea is to make invitations for projects jointly”, explains Wanderley de Souza, the MCT’s executive secretary. According to Souza, the ministry’s strategy takes its inspiration from the model of the Small Business Innovation Research Program (PIPE).

Created and sponsored by FAPESP, PIPE supports projects to develop innovative products and processes presented by researchers linked to small companies. The Minas Gerais Research Support Foundation (Fapemig), for example, is now drawing up its program along the same lines as PIPE, as its president José Geraldo de Freitas Drumond explains. In Rio de Janeiro, the agreements will be adapted to the Technology in Small Business Program (TPE), implemented by the Carlos Chagas Filho State of Rio de Janeiro Research Support Foundation (Faperj), currently deactivated because of budgetary constraints. “In all the states, the agreements are going to support research in companies”, says the executive secretary.

Announcement en bloc
The MCT now has the authority of the Managing Council of the Sectorial Fund for Biotechnology to invest R$ 10 million in technological innovation projects in companies from the area. “But the announcement of the agreements will be made en bloc”, Souza reveals. The ministry is just awaiting the authorization of the managing councils of the sectorial funds for Agribusiness and Health to announce total investments of R$ 20 million in programs in the three areas. “As the agreement involves equal contributions, we will set off with a R$ 40 million program”, Souza reckons. “In São Paulo, to be sure, the program is going to get off the ground. In others, it may be more difficult.”

The MCT is going to adopt a strategy of transferring resources from the sectorial funds to the companies through the intermediary of the FAPs until Congress approves a bill altering the legislation on the funds and authorizes the funds to be handed over directly to the companies. “Since the resources in the funds come from the economic activity itself, we may perhaps bring about the changes in the law by means of a normative instruction”, Souza supposes.

The transfer of resources to business research, warrants the secretary of the MCT, will not jeopardize academic research. “The funds were created to support innovation. We are carrying out studies to support also basic research in the universities, university-company integration and the training of human resources, as well asthis new business innovation program”, he says. “The idea is to harmonize the whole research system.”

Wanderley de Souza also revealed that the National Council for Scientific and Technological Development (CNPq) is going to launch a scholarship program to “put doctors into companies both in Brazil and abroad”. The program will probably have a three-year duration, to be financed by the CNPq in the first year, and then with the costs shared with the companies. In the third year, there is a provision for hiring a scholarship holder. “The program is ready to begin”, he says.

Promising partnership
The resources from the sectorial funds will make it possible for Fapemig, for example, to resume the programs for supporting business research, suspended in 2002. “The draft of the new programs is now ready”, Drumond explains. The intention is to start with 15 scholarship holders in companies in the biotechnology centers from Belo Horizonte and the north of the state; in information technology, from Santa Rita do Sapucaí, Pouso Alegre and Itajubá; or then in the agribusiness and textile sectors. “We are designing the legal instrument for implementing the agreements”, he explains. The program for business innovation, drawn up in partnership with the MCT, should take onto the market an enormous stock of research held by the universities. “In the last 16 years, we have 3,000 research projects concluded, and we do not know where they are. The basic research projects, you can count on your fingers. The rest is innovation”, says Fapemig’s president.

“This is one example of the partnership that is necessary and possible between the federal government and the states in piecing together scientific and technological policy in the country”, says José Fernando Perez, FAPESP’s scientific director. “PIPE has to be expanded on a nationwide scale.” The agreements and joint invitations for projects are also going to strengthen the FAPs, which, in his assessment, is another important step in the direction of the new federative pact for the development of science and technology in the country. Perez underlines that the equal contribution provided for in the program is strategic for involving the state governments in the process. “Without this, it would be paternalism.”

Since 1997, PIPE has been financing 258 projects for developing innovative products and processes. The projects are coordinated by businessmen, researchers from the company or connected with the universities, of which no master’s or doctor’s degree is required, only graduation or a curriculum that proves their competence and experience in the specific area of the research. By 2003, the program had already invested R$ 34.9 million and US$ 3.9 million in innovation (see table).

The research projects are carried out in three stages. In the first, the Foundation sets aside up to R$ 75,000 to test the feasibility of the project. In the second, the company may receive up to R$ 300,000 to develop a process or prototype. In the third stage, when the project goes into a commercial scale or a production line, FAPESP offers support for carrying out a business plan, by means of agreements maintained with the Financier of Studies and Projects (Finep) and the Micro and Small Business Support Service (Sebrae) of São Paulo, besides venture capital institutions.