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Paths and horizons to advance on

National meeting evaluates the situation of Science, Technology and Innovation (S,TeI) and proposes strategies for the scientific and technological development of the country with greater participation by companies

They were three days of presentation of ideas, problems, proposals and even of concrete institutional changes: during the event the Federal government, demonstrating its political willingness to pave the way for a rising trajectory in science, technology and innovation in the country, set up the Center of Administration and Strategic Studies, unveiled the Innovation Bill and announced the implantation of four new Sectorial Funds for research support, those of Biotechnology, Agribusiness, Aeronautics and Health. There were many hours of debate, divergence of opinion and intense political negotiations inside the walls of the Tennis Academy of Brasilia, all of this was preceded by an opening ceremony in grand style on the evening of the 18th of September, under the command of the President of the Republic, Fernando Henrique Cardoso.

This may well be a possible summary for the National Conference of Science, Technology and Innovation promoted by the Ministry of Science and Technology (MCT) and the Brazilian Academy of Sciences between the 18th and the 21st of September in the country’s capital. However, this would express little of the of the perceptible driving force to build a different country, to understand more, to transform, to construct and to innovate, that ran through the words and manifestations of a considerable number of the 1,200 people, from all over the country, who helped to trace out strategies and directives for scientific, technological and innovative policies for the next ten years. Therefore, it was anything but strange, that at the end of the conference, the minister of Science and Technology, Ronaldo Sardenberg, had considered the conference “a landmark in the history of Science and Technology in Brazil”.

“We have the next decade to reach the group of countries who are leading”, he stated. At the end of this path, he admitted, we might be reaching the level of 2.5% of our Gross National Product (GNP) being invested in research and development (ReD), but for this “we need sustained efforts” he emphasized. A little too excessive in enthusiasm? If it was, it did not jar with the general climate of the Conference, in spite of the frank exposition of some considerably critical visions about what effectively has been done by the Federal government to ensure national development.

For example, there was the diagnosis that among the main stumbling blocks for technological advance in the country are the absence of an industrial policy and of fiscal incentives for technologically based companies, the lack of integration between the areas of the production of knowledge and the productive sectors as wellas grave problems in the structure of higher education. However, in parallel, ideas were put for practical ways ofrefining proposals destined to consolidate and expand academic research and business innovation throughout the country.

In a certain manner, the dive into the national challenges in the area of S,TeI made possible by the Conference – and understood, in the majority, as basic challenges for any political project for the building of a prosperous and more socially just nation – provoked enthusiasm that appeared to show away even the heavy climate of pessimism that has settled over the world since the acts of terrorism of the 11th of September in the United States. Anyhow, in the opening session of the event, it was the president of the Republic himself who was responsible for taking it out of the shadow, after having affirmed that, in relation to science, technology and innovation “our goal is to secure our participation on the frontier of knowledge and on the cutting edge of technology, in such a manner that we do not continue with an unbalanced national society and with asymmetrical globalization”.

Then dwelling upon international events, the President stated that they bring to the scene the necessity “to re-examine, from the moral point of view, a series of questions that are not being dealt with in the international debate”. He observed that “terrorism is an enemy whose face does not appear”, and for this reason “those who look to find it in some State, belief or people, are misguided, because one is dealing with a network phenomenon”. The idea of humanity needs to be rethought, he stated, then going on to invite those present to reflect on the contributions that Brazil could make for a revision of this asymmetrical international order.

If in the days that followed this point was not dwelt upon in a specific form, there were actually concerns for the future in the reflections produced by the more than one thousand guests at the Conference, among them researchers, entrepreneurs, businesspersons, parliamentarians, journalists, administrators and the Federal and State executors of science and technology policies, representatives of the Ministry of Science and Technology (MCT), of development agencies and other organs of the Federal government and directors of State Research Support Foundations (Faps).

In five plenary sessions and five symposiums, composed of 30 round tables, 136 speakers took turns at the task of presenting a diagnosis and proposals regarding the five major topics on which the conference was organized: Advance of Knowledge, Standard of Living, Economic Development, Strategic Challenges and Institutional Challenges. These are topics that hundreds of people have been poring over on since last year when the MCT launched the project DECTI – Strategic Directives for Science, Technology and Innovation on a ten-year horizon.

From this work came the Green Paper on Science, Technology and Innovation, a basic document for the National Conference and for the six preparatory regional conferences which preceded it on the 16th and 17th of August (see Pesquisa FAPESP issue 67). From the National Conference, a type of climax to all of this political enterprise, there will be a White Paper, with the consolidated strategies and directives for science, technology and innovation for the next decade. However, one has to take into consideration that the practical results of the work have already begun to pop up.

The Center of Administration and Strategic Studies is one of them: it will be the assisting organ in the administration and allocation of MCT resources, defining projects and investment priorities. “The Center will help us to have a strategic vision, directed towards results”, explained the Minister. Another is the draft of the Innovation Law that the government will be sending to the National Congress, whose objective is to amalgamate the interaction of the universities with the private sector. “The law does away with various obstacles”, said Carlos Américo Pacheco, executive secretary of the MCT.

And the changes won’t stop there. The MCT included in the draft of the law the regulation for the creation of four new Sectorial Funds – Health, Biotechnology, Aeronautics and the Agribusiness – two articles that intend to spur investments in technology in the private sector. On of them gives authority to the Financier of Studies and Projects (Finep) to transfer resources of the Green-Yellow Fund and to reduce the interest rate for technology based companies. The other allocates resources to guarantee liquidity in the market of venture capital.

Government support
Among the businesspersons participating in the Conference, there was a consensus that the competitiveness of Brazilian product depends on innovation investments. Eugênio Staub, the president of Gradiente, pointed to the necessity of a “re-industrialization” of the country. “We have an effective engineering for the substitution of imports. Now the time has come for us to carry out innovation.” It was estimated that the bottleneck for technological advance in the private sector is the lack of definition of industrial and fiscal policies for investments in innovation.

“In spite of incentives such as the Information Technology Law and the Sectorial Funds, a large part of the total of companies don’t participate in these efforts, since the return on the invested capital is very low”, recognized Herman Wever, the president of Siemens of Brazil, a company that, in the opposite direction to the trend, has made of innovation a strategic policy. Wever has no doubt that the action of the Government is fundamental for getting company innovation off the ground. “By establishing industrial policies, the Brazilian government will be doing the same as our competitors such as South Korea, the United States and Germany. One cannot believe that the market can do everything on its own. There are fiscal incentives that the World Trade Organization (WTO) accepts.”

The expectation of businesspersons and entrepreneurs is that the State creates a favorable climate for innovation, with measures which “stimulate competition, reduce institutional and economic instability in order to minimize the change of direction of resources for activities non-productive and to increase the investments destined towards the qualification of personnel”, suggested Renato Fonseca, the director of the National Confederation of Industry (CNI). The president of the Confederation of Industries of the State of São Paulo (Fiesp), Horácio Lafer Piva, added to the list of requests the approval of a fiscal reform law. “We have a very high and stupid taxation. The market fights back through tax dodging.”

However, the big plea from the private sector really is for effective fiscal measures that increase the external competitiveness of the Brazilian product. This most definitely is the core of the proposal presented by the National Association for Research, Development and Engineering of Innovative Companies (Anpei in the Portuguese acronym) in order to stimulate innovation. “Autochthonous technological development cannot do without fiscal incentives”, argues the Anpei in a fifteen-point document presented during the Conference, equivalent to those practiced by countries such as South Korea, Canada and Australia.

Some of the measures by the agency have already been incorporated into the bill on Sectorial Funds and the draft of the Law of Innovation. The others could be presented by parliamentarians in the National Congress. The parliamentarian Luiza Erundina (Socialist Brazilian Party – PSB-SP), who took part of the Conference, is willing to send to the Federal Parliament projects that contribute towards technological development and the competitiveness of the country.

Integrated action
The lack of incentives has had in fact negative effects on the vast majority of the sectors of Brazilian industry. For example, the company Embraer, one of the leading exporters of Brazilian, would have been able to save close to US$ 75 million of the US$ 230 million invested in the development of the aviation project ERJ 145 if Brazil had had support legislation for ReD similar to that of Canada or of the United States. “We need to have integrated Government action of stimulating commercialization and support for ReD”, proposes Horácio Forjaz, vice-president of Embraer.

The Brazilian chemical industry, a sector which registers the ninth highest income on the international market, is another example. Imports exceeded the sum of US$ 10 billion last year and our exports were only a little more than US$ 4 billion, a deficit of US$ 6.6 billion. In the evaluation of Pedro Wongtschowski, the director-superintendent of Oxiteno, a company of the Ultra Group , the restrictions to growth have their origin in financial costs, in the tariffs of importing capital goods, in the high taxes and costs of exporting, in the high taxation in general and in the low integration between industry and the universities. “We need to transform the businessperson into an innovator and the innovator into a businessperson”, says Wongtschowski.

In the electronics industry the situation is no different. “Last year we imported US$ 9.5 billion in components, against US$ 3 billion in crude oil”, compares Marco Aurélio de Almeida Rodrigues, vice-president of the Brazilian Association of the Electrical and Electronic Industry (Abinee). This year the deficit in this sector has reached US$ 5.4 billion. “It is urgent that we make an effort to manufacture components on a large scale and not the simple importation of a factory of chips”, he warns.

For Nelson Brasil, a director of the Brazilian Association of Pure Chemicals (Abifina in the Portuguese acronym), the way out is to encourage internal manufacturing through measures that stimulate “the competitive substitution of imports”, through technological innovation.” There is installed productive capacity as well as an out-of-date technology which could be reactivated”, he guarantees. In the case of the chemical industry, he suggests that the government adopt measures through the Unified Health System (The Brazilian national health -SUS), such as, for example, anticipated programs of purchase, with guarantees of tax compensation.

The business community has no doubts that investments in ReD would have a positive effect on the commercial balance of payments, improving the position of the country in international negotiations dealing with high technology. Throughout the world, exports in this sector account for to 20% of total exports. “In Brazil, they represent only 5% of the external business of the country”, says Julio de Almeida, a director at the Institute of Industrial Development Studies (Iedi).” Regarding exports, Brazil is near to those closed economies.”

The changes that are in the path of innovative technology demand some reflections. “Brazil is a unique case in which there have been two great occurrences of technological and industrial re-tooling”, comments Antonio Barros de Castro of the Economics Institute of the Federal University of Rio de Janeiro (UFRJ). With the first, in the decade of the 80’s, the country equipped itself similar to a medium sized European country. The second industrial movement took place during the 90’s and produced a notable industrial advance, products, techniques and of organizational formats.”

“However, this cycle has ended and it is necessary to look for a new solution.” For him the path is that of innovation which uses “what most modern to produce goods that are simpler and cheaper.” Also, he emphasizes: “I am not speaking of giving up on technology and science, but to use the most advanced science and technology to take downward leaps and with this to enormously increase the buying power of the population, which will then have access to various products new to them.”

In the evaluation of Luciano Coutinho, of the Economics Institute of the State University of Campinas (Unicamp), the country should look to the future and forget about lost opportunities over the last few decades. As he says, what is needed is to break taboos such as that of State subsidies and guarantee markets for private companies. The high level of the production of knowledge in the country is in stark contrast to the low level of business innovation. The solution to this paradox, beyond than the simple intervention of the State, demands an “alliance of knowledge” according to Carlos Henrique de Brito Cruz, the president of FAPESP. “Knowledge has also to be present in companies and in other sectors of society”, says Dr. Cruz. The amalgamation of this alliance, he underlined, is the innovative capacity which will run through our companies if they hire researchers formed in our good universities. Dr. Brito Cruz cited the example of the Physics Institute of Unicamp, which has generated twelve companies over the last thirty years, and which together, have an income of some R$ 300 million per year. “One of the great results of the Conference was the consolidation, between academics and businesspersons, and the idea that the company is the location for innovation, while the university is the place for education and science.” José Fernando Perez, the scientific director of FAPESP, defended a “national pact” for science and technology, which would demand, for example, that the States comply with their determined constitutions and would therefore pass on to the FAPs their rightful resources for investing.

Educational challenges
The challenge to take research into the company itself demands quality in college education in the country. “It is a great mistake to increase the number of private universities in relation to those that are public” cautioned Castro. For Glacy Zancan, the president of the Brazilian Society for the Progress of Science (SBPC), “there is no way of putting off university reforms.” Public universities are responsible for the formation of almost the complete total of 6,000 professionals who receive their doctorate title on Brazil. As well, this number is growing significantly. In 1993, there were one thousand doctorates awarded.

“Brazilian transformations are more visible abroad. Brazilian science is now quoted throughout the world. The great challenge is the construction of strategies and of converges in order to generate an innovative atmosphere”, said Evando Mirra, the president of CNPq. Brazil is among the 17 countries which most carry out science within the world. “We have to get rid of our inferiority complex”, commented Eduardo Krieger, the president of the Brazilian Association of Sciences (ABC). “The green paper is an excellent registration of how far we have gone in science and technology” asserted Perez. However, in spite of the positive evaluations, regional inequality in the production of knowledge and the poor geographical distribution of researchers, added to the lack of stimuli, are preventing the country from exploring all of its potentiality.

The report by Luiz Hildebrando Pereira da Silva, who after a long period at the Pasteur Institute in France, landed at the Research center into Tropical Medicine in Porto Velho, in the State of Rondônia, makes this point clear. “In one of the good riverside schools we proposed carrying out among the children a competition to identify fruit native to the region. The total number of fruit brought in added up to forty seven. Numerous types of fruit couldn’t be put on the list.

We didn’t find biologists or botanists at the Federal University of Rondônia (Unir) capable of giving a name to these unknown fruit and not even to those already known.” For Silva, this story illustrates the economical potential of the region in terms of its biodiversity, variety of products of interest as food, for pharmacology, toxicology and biotechnology, contrasting with the fragile or nonexistent human potential capable of using it.

Positive experiences
The National Conference was also the stage for the presentation of positive experiences in technological and innovative developments in different parts of the country, such as the Small Business Innovation Research (PIPE) and of Partnership for Technological Innovation (PITE), of FAPESP. The secretary of Science and Technology of Pernambuco State, Cláudio Marinho, presented projects financed through the Support Foundation for Science and Technology of the State of Pernambuco (Facepe) for the improvement in the production processes in sectors where there is strong regional demand, among them those related to the industries of confection, wine, dairy products and egg production.

A revolutionary law for innovation

The bill on the Innovation Law that the Federal government will be sending to Congress proposes a true revolution in the area of academic research in the country. Its objective is to amalgamate the interaction of the universities with the private sector, opening up the way fore business innovation. The bill predicts, for example, partnership contracts between public scientific and technological institutions and the private sector for the development of projects, as well as contracts for the transfer of technology and the licensing of products.

The new rules will authorize teaching and research institutions to open up their laboratories to private companies and to allow them a reduction in the working load or a leave of absence for a period of two years of researchers who decide to set up a Technology Based Company (EBT in the Portuguese acronym) or to collaborate in research projects with institutions and/or companies. In this case, the maintenance of the position of the researcher on leave and of his or her immediate replacement by public concourse or temporary hiring in an emergency character, will be assured to the institution. Once approved, the rules will be valid for Federal organs. The state universities and institutions will have to be regulated by specific state law.

Another relevant point is that of Article 26 of the bill, which authorizes organs and entities of Federal Public Administration, direct or indirect, to buy goods and services produced by EBTs and for companies supported by government programs of scientific and technological development, without going through an auction bidding. Consequently, this manner of acquisition by the government will not follow the rigid law that oversees the regulation of public auction bids, explained Elza Brito da Cunha, one of the lawyers responsible for the drawing up of the draft law.

In another Article, that of Nº 31, the law creates the possibility of technological orders on the part of development agencies: it authorizes the Union to hire companies “of recognized technological capability” to carry out research that involve technological risk for the solution of a specific technical problem or for the development of an innovative product or process. Also, Article N° 32 authorizes the institution of Mutual Investment Funds in EBTs, formed through resources raised through of the System of Distribution of Securities and supervised by the Securities Commission (The Brazilian watchdog on the financial markets).

The draft project is presently under public consultation for a period of fifty days beginning on the 21st of September on the site of Ministry of Science and Technology ( “The idea is to harvest suggestions for improving the project”, explains Carlos Américo Pacheco, the executive secretary of the MCT. “The experience of the Sectorial Funds showed to us that anticipated consultation allows for the project to be voted into law more quickly. “In Congress, the new law will be annexed to the bill of senator Roberto Freire (PPS-PE) which is going through the proper channels in the Federal Senate. Senator Freire, present during the debates, believes that by having a consensus and an endorsement by the Finance Ministry, the passing of the project will be much quicker, and may well be approved by the end of the year.

The Center is going to assist in the administration of the MCT´s resources
A civil society organization for carrying out studies and advising on the administration of the Sectorial Funds as well as the actions of the MCT. This is the function of the Center of Administration and Strategic Studies (CGEE in the Portuguese acronym), which had its statutes approved during the Conference. The crowded rooms during the sessions of presentation and consultation by the participants of the event, and the long queue by those attending the Conference that formed to sign the act of its constitution, showed the importance of the CGEE for this moment in the development of Science and Technology in the country.

Called simply the Center, it is going to function as a non-profit civil association so as to gain agility in the hiring of personnel and in offering services to government organs and to companies. The financial resources of the Center will come from its contracts with public and private institutions and by agreements with the Federal government. Evando Mirra, the current president of CNPq, was acclaimed president by those present at the assembly shortly after the approval of the statutes.

The formation of the administration council of the Center, which will be the organ for the deliberation and guidance of the work of the entity, was established after various understandings, including those during the Conference. The composition of the council begins with the members linked to public authorities or that is to say: the MCT, Finep, CNPq, Capes and a member from the Ministry of Development, Industry and Foreign Commerce.

Then there are four members from civil entities that are related to the areas of Science, Technology and Innovation: SBPC, ABC, the National Confederation of Industry and a representative chosen from from the ranks of the following institutions: the Brazilian Association of Technological Research Institutions (Abipti), the National Association of Promoters of Advanced Technology Enterprises (Anprotec), who are incubators, and the National Association of Research, Development and Engineering of Innovative Companies (Anpei).

The list is completed with the elected members. One representative elected by the associates, who are those people who signed the Center’s constitution act during the Conference and those, normal people, firms or educational institutions or representatives of society, accepted by the administrative council. The other five members, who will complete the total of fifteen, are the following: three elected by the administrative council from the people indicated on triple lists by the Forum of State Research Foundations (FAPs), Forum of Pro-Rectors of Research and Post Graduation and by the National Forum of State Secretaries for Science and Technology and two elected by the council of the Center from professionals linked to the sector through indication by the ABC, SBPC, CNI, Sebrae and the Inter Syndicate Department of Strategies and Socio-Economic Studies (Dieese).

A development leap
The Conference defines strategic directives for the country´s future

Forgive me for the simplicity of the model which I am going to use, but it was the thing that touched me most after participating in the National Conference of S,TeI. Clausewits stated that a war is won with a well trained army; modern weapons; good logistics in the supply line to the battle front; an organized Joint Chiefs of Staff who know how to define the necessities and the priorities of battle; along with a good system of communication. In the fight to implant in reality the culture of which S,TeI are the strategic elements of the development plans of nations, do we have a space for Brazilian society? The answer appears to me to be yes. We have an “army” with a precarious base, but with good “officers”.

Our basic, secondary and college education systems, still leave a lot to be desired and we have many years of hard work ahead of us. Curiously, however, our post graduation demonstrates an excellent quality level. We are forming five thousand doctors per year, a number comparable to some of the developed nations. Our production of scientific papers has already placed the country among the top twenty (18th) in the world. We can say then that for S,TeI our “army” being formed has good potential.

And the logistics? The creation of the Sectorial Funds opens up the possibility of creating a flow that is more permanent and stable towards research resources, whether they be in the area of technology, of basic research or for infra-structure. The guarantee of a continuous doling out of resources is the logical base for the planning and the continuity of research. At the same time, the volume of resources will take an enormous jump and will automatically increase with the growth of each sector. The “weapons” are the modernized laboratories and the basic research that the Sectorial Funds themselves are going to provide.

The Green Paper, the Regional Conferences, the National Conference and the future White Paper which contain the strategic directives will establish the basic plan for action in the field. Thousands of researchers, businessmen, politicians and government staff will participate in this group of activities. We have created a “Joint Chiefs of Staff” with the establishing of the Center of Administration and Strategic Studies (CGEE), space for reflection and the formulation of directives to be proposed for S,TeI and, furthermore, for Strategic Planning and Development. The objectives of the CGEE make clear the necessity that this reflection and formulation of strategies should be done by listening to the community and to those with front line experience in the various sectors.

The “High Command” will arrange the “combat plans”. For the fight, it will be important to have a good and efficient system of communication linking the “High Command” and to the “Joint Chiefs of Staff ” to the “army”, a task which will be met by the Forum of Pro-Rectors of Research and Post Graduation, the National Forum of State Secretaries for Science and Technology and the National Forum of the Research Support Foundations. So that these three forums may always be well informed, they are participating in the Administrative Council of the CGEE. Their capillary characteristics make them ideal for the flow of information and of actions.

There are still two other remarkable items. The first is related to the participation of the business sector. Our society already understands the importance of companies in Research and Development (ReD) activities, with public support, done directly through fiscal subsidies, stimulating partnerships with universities, research centers or even through the direct purchase of technology – systems used in countries that have turned themselves more competitive thanks to measures of this Nature.

The second was the presentation of the Innovation Law, which can be found on the MCT’s website, open to suggestions, and which is creating an excellent opportunity to transform researchers into entrepreneurs and to stimulate ReD among entrepreneurs. As a final consideration, it is worth stating that our country is not going to make this jump overnight because these things are still being created. However, without them there will be no jump. The problems are being diagnosed by a good diagnostics team. There is cohesion and logic in the measures. They are becoming independent of those who govern them; they are converting themselves into law.

Francisco Romeu Landi is the director-president of FAPESP and the president of the National Forum of the Research Support Foundations

Results of the regional meetings
On the first day of the debates at the National Conference of Science and Technology, the proposals drawn up during the six regional meetings that took place on the 16th and 17th of August were presented.

São Paulo
The proposals from São Paulo were based on the following premise: to transform knowledge into development through activities of ReD in companies, to improve the infra-structure of research and education and the application of strategic knowledge in social policies. “If the place of Science and Education is the university, then the place for the Development of Technology and for Excellence is the company” affirmed Hernan Chaimovich, vice-rector of the University of São Paulo (USP), responsible for the presentation of their proposals. São Paulo suggests access by the companies to part of the Sectorial Funds resources by way of ReD projects, independently from partnerships with universities and institutions.

As a matter of fact, this suggestion was incorporated into the bill which is creating four new Sectorial Funds. A review of the Law of Fiscal Incentive (8.661/93) was also proposed, in the same manner as the proposal drawn up by Anpei on the use of purchasing power by the State and the integration of companies with universities. São Paulo also suggested the diversification of college education, for example by way of courses sequenced in a specific formation. (see the complete proposal on the website:

Central-West Region
The proposals had their focus on the recovery of the scientific and technological weakness in relation to the other regions of the country, through the implementation of programs of integration in the areas of Science and Technology, regional diagnoses, amplification of the offer of post graduate programs, as well as the modernization of the structure of the Federal universities.

North East Region
The North East wants to increase the number of doctorates in the region; to re-enforce post graduation at the doctorate level, to improve ambulatory installations, to re-enforce emergent regional groups and to give priority to projects with local counterparts.

Northern Region
The region proposes the creation of an Amazon Fund for S,TeI and the creation of a Sectorial Fund for Biodiversity, incentives for the financing of S,TeI through the productive sector and to stimulate the constitution of local ReD networks and their diffusion.

South East Region
The South East Region defends the idea of internal development, of partnerships between municipalities and SeT institutions, as well as local productive groups, especially with reference to the financing and formation of human resources.

Southern Region
The region calls for the regionalization of the actions of the MCT together with the other ministries in the support of development and innovation, and the creation of Centers of Excellence in Innovation and the Administration of Technology, linked to the principal research centers, and to the implementation of an on-line information system about S,TeI.