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The keys to development

Latin America's way out may be "creative destruction" based on science and technology

MIGUEL BOYAYANA lot of things have changed in Latin American in the last 17 years. The growth recipe of the Washington Consensus, formulated in 1989 – involving fiscal discipline, deregulation, and the privatization of government-owned companies, among other measures – impacted strongly on the economy, regional markets and even technological innovation, but  it was insufficient to ensure sustainable development: the region’s average GDP growth failed to exceed 4% and social inequalities became even greater. One third of our population enjoys a First World life while the other two thirds are not included in the market, said Jorge Katz, former director of the Economic Commission for Latin America and the Caribbean (Cepal), a professor of industrial economics at the University of Buenos Aires, in Argentina, and a visiting professor teaching innovation theory at the University of Chile, when he visited São Paulo.

“We need to overcome the idyll with the Washington Consensus.” The way out for Latin American development, in his mind, lies in “creative destruction”, where in the economics of knowledge,  science and technology (S&T) are the key.

The new character of the revolution that is needed in Latin America was the backdrop to the 7th Ibero-American Science and Technology Indicators Congress, organized by the Ibero-American Network of Science and Technology Indicators (Ricyt) and FAPESP, from May 23 to 25, in São Paulo. There is currently a new, knowledge-inspired social revolution that will lead to social changes. We need development policies that will consolidate a new industry, create new markets and enable regional duality to be overcome while meeting social demands, explained Mario Albornoz, Ricyt’s secretary. Within this new context, the construction of S&T indicators is a strategic tool for providing support to regional development policies.

This is the mission of Ricyt, which was created in 1995, through an initiative of the Ibero-American Science and Technology Program for Development (Cyted): to encourage and facilitate the production of indicators for the diagnosis and management of S&T in Latin American countries, Spain and Portugal. “At the time, we realized that most of the Latin American and Caribbean countries lacked reliable and internationally comparable S&T statistics”, recalled Albornoz.

The network was designed as a collective undertaking, given that the countries involved had problems in common: low rates of investment in innovation and in its results for society, an absence of long-term scientific and technological policies and a lack of entrepreneurship. It links national S&T organisms, universities, research institutes and regional entities and has made progress in the development of indicators of information, of public perception of science, of the social impact of S&T and in the globalization of science. We are currently going through a new stage, the basic objectives of which should be to attain greater competitiveness and social equity, which in turn translate into the need to increase exports and build dynamic comparative advantages based on knowledge, summarized Albornoz.

Innovation indicators
At the Ibero-American congress, Brazil stood out, largely because of the evaluation of the progress of technological development. Katz himself recognized that here the State played an active role and, due to the National Social and Economic Development Bank (BNDES – Banco Nacional de Desenvolvimento Econômico e Social) and  the National Council for Scientific and Technological Development (CNPq – Conselho Nacional de Desenvolvimento Científico e Tecnológico) contributed, for instance, to the consolidation of a strong and diversified industry, especially in the strategic sector of strong capital goods. The state does not intervene in Chile. Only now has it begun to adopt a policy of investment selectivity in order to build Chile 2020. The situation in Argentina is similar, he analyzed.

Brazil is also ahead in terms of development indicators. The main initiative is the Industrial Research into Technological Innovation (Pintec), carried out by the Brazilian Geography and Statistics Institute (IBGE), with the support of the Studies and Projects Financer (Finep). In the first waves (2000 and 2003), Pintec assessed the number of industrial companies carrying out innovation in technology and processes,  investments in R&D, cooperative relations with other institutions, and people employed, among other factors. In its third wave, to be published this year, Pintec is also expected to include the services sector.

The latest Pintec wave showed that innovation has progressed slowly in the country. Between 2000 and 2003, although the number of companies that engaged in R&D grew, this growth centered on small firms that were developing low cost, low risk imitative innovations. The other companies reflected a drop in innovation-related spending. Pintec data reveal  weak points in the advance of innovation in the country and shows where  technological development policies should be strengthened.

The information derived from Pintec, which is based on the methodology of the Oslo Manual, of the Organization for Economic Cooperation and Development (OECD), does not allow one to identify the innovative performance of specific sectors. However, it provides basic input for building another, more sophisticated indicator – the Brazil Innovation Index (IBI), the result of an editorial initiative at the Inovação magazine, together with the Uniemp Institute and the Department of Scientific and Technological Policy at the Institute of Geosciences (IGE) at the State University of Campinas (Unicamp), with FAPESP’s support.

The new index evaluates the innovation capabilities of companies, taking into account innovation efforts and their outcome, thus enabling  companies in several industrial sectors  to be classified in order of technological intensity. The ranking of the most innovative companies was announced during the 7th Ricyt Congress. Our classification universe consisted of 30 manufacturing companies that Pintec consulted, explained Carlos Vogt, FAPESP’s president and creator of this index.

In addition to the companies’ responses to the Pintec 2003 questionnaire, which were given to the research team on a voluntary basis for the preparation of the indicator  with total confidentiality, IBI also used information regarding the patents registered by the National Institute of Intellectual Property (INPI – Instituto Nacional de Propriedade Intelectual), as well as data from IBGE’s Annual Industrial Research (PIA) 2003, that measure investments in the training of personnel and the acquisition of equipment, among other elements.

Market and technology
The index’s underlying idea is that technological efforts are not an objective per se, but simply tools for ensuring company growth, explained Ruy Quadro, from Unicamp. Thus, IBI is divided into two major indicators: Aggregated Efforts Indicator (IAE), which take into account the inputs used in the innovation process – and the Aggregated Results Indicator (IAR), which measures the impact of innovation on company performance. Each of these major indicators was subdivided into another 15, such as the indicators from human resources, from sales revenue of innovative products, and from patents, among others.

The differences between sectors in the R&D efforts and in the number of patents were offset by balancing the results obtained by each company with the average  innovative performance in its sector of activity. So that large companies would not gain undue advantage, in the evaluation of   innovative effort, the researchers took into account the net revenues and the number of employees.

The sector innovation rankings were built based on the similarity of technological behavior. Using this criterion, the companies were arranged into four groups: high technology sectors, medium to high technology sectors; medium to low technology sectors and low technology sectors.

In group 1 (high technology), one of the most R&D intensive sectors in the country, the first and the third places went to the automotive sector. The top ranking firm was Delphi, an auto parts manufacturer with a technological performance far above the automotive sector’s average. Embraer ranked second, because its relative weight in the sector is very high.

In Group 2, comprising companies of medium to high technological intensity that engage in R&D continuously, the first three places went to the chemical industry, with Silvestre Labs ranking first. This is a manufacturer of pharmaceutical products in the Rio de Janeiro biotechnology center (BioRio), whose results indicators stood out. It has 150 employees, more than half of whom are dedicated to R&D, and it has already taken out six patents. The second place went to Vallé, from the town of Montes Claros, in the state of Minas Gerais, which works in the animal health sector.

Group 3, comprising companies of medium to low technological intensity, produced uneven results. The first place went to Brasilata, a manufacturer of steel cans with a staff of 900 and more than 50 patent requests in Brazil and abroad; it achieved spectacular performance in terms of its results indicators. The second place went to Faber Castell, a company classified in the “furniture and assorted products” sector. Its Aggregated Efforts Indicator was outstanding. Usiminas, a basic metalworking firm, posted a balance of efforts and results, ranking third.

Group 4 is comprised of the sectors with the lowest degree of technological intensity in Brazilian industry. The first place went to Santista Têxtil; the second to Grendene, a footwear manufacturer, and the third place went to Rigesa, a pulp and paper industry.

In its next wave, the IBI will be fine tuned in order for biases found in the comparison of small and large companies to be corrected and to include the services sector. However, according to Quadros, it already has a triple advantage: it will allow society to become aware of the work of innovative companies from a different point of view than that of the traditional indicators; it will also function as a benchmark reference for the government and development agencies to calibrate their public policy tools geared toward the private sector; finally, it will enable companies to evaluate their innovation performance vs.  other competitors in the market. “The next step will be to prepare the Campinas Manual, a sort of grammar for the IBI, with explanations about its syntax”, explained Vogt.

MIGUEL BOYAYANAccess to science
The indicators allow one to also evaluate the degree of information the public gets about scientific and technological development in the country. The Ricyt Congress was the arena for the presentation of the early results of the research into Public Perception of Science and Technology, prepared by the Ministry of Science and Technology (MST), together with the Brazilian Academy of Sciences and with Fiocruz, with the collaboration of Labjor, from Unicamp, and FAPESP support.

This was the second country-wide study of the subject. The first was carried out in 1987 by the Gallup Institute, thanks to a CNPq initiative, and found, at that time, that only 20% of the interviewees showed any interest in studying science-related themes. This time, 2,004 people were surveyed all over the country; their mean age was 36 and their mean monthly income stood at R$952.29. The research was conducted using a quantitative questionnaire in November and December of last year. It found, for instance, that Brazilians like science better than they like politics. This is also the case in Europe, compared researcher Yurij Castelfranchi, from Labjor. But the attraction to science is lower than to themes connected with medicine and health (60% interest), the environment (58%), religion (57%), economics (51%) and sports (47%).

The research also revealed discrepancies in gaining access to knowledge: access to scientific information varies as a function of income and education. The Class A respondents had visited science or art museums, gone to libraries and zoos, or taken part in science Olympics in the last 12 months. These results are similar to European standards. In class E, on the other hand, the frequency of these elements was close to zero. Moreover, 90% of interviewees were unable to mention any scientific research institution in the country.

The MST research relied on the same methodology employed in the Project on Indicators of Public Perception, Scientific Culture and Participation of Citizens, which Ricyt started designing in 2001, in Uruguay, Spain, Argentina and Brazil. The project reviewed the traditional indicators – relating positive attitudes to science with the level of schooling, for example — aiming at expanding the scope of the analysis and observing the extent to which scientific culture is impregnated into society. The methodology was tested and perfected and a research guidance manual is due to be published in November.

Access to science
Latin America is also engaged in developing indicators that can allow one to effectively evaluate its scientific production. The main world reference is Thomson ISI (Institute for Scientific Information), which indexes more than eight thousand carefully selected newspapers and scientific journals, covering 164 fields of knowledge. “For this reason, we have had the tendency to publish in international journals indexed by ISI”, stated Rogério Meneghini, from the Latin American and Caribbean Center for Health Sciences Information (Bireme). The impact of Brazilian researchers’ articles, as measured by the number of times they are cited (and this rule applies to all of Latin America) is of little effect vis-à-vis qualified competition: the impact index of Brazilian science in the Journal Citation Report is 0.20. As a matter of comparison, Holland’s is 9.58 and the USA’s stands at 38.33. On average, the articles produced in developed countries have an impact factor of 1.9 and those from developing countries attain 0.3, stated Meneghini.

The option of publishing in ISI indexed journals  has driven Brazilian researchers into an author-fuelled vicious circle that has kept most of Brazil’s scientific output hidden over the last few years. SciELO, created in 1997, with FAPESP support and in partnership with CNPq, expanded the visibility of Brazilian research, as well as of a significant part of Latin American science, with 200 indexed journals, selected by means of a critical and strict evaluation process. Its content is totally open and free of charge.  However, there is a charge for consulting  the articles in most electronic libraries. In Brazil, the democratization of access is ensured by the Coordination of the Training of Higher Level Personnel (Capes), which invests US$ 32 million per year in the purchase of nine thousand indexed journals. “From the ethical point of view, how can one deal with scientific work, which can lead to fabulous profits, without making access easier?” asked Meneghini, who advocates the idea that scientific articles, especially those that are the product of government investments, should be available in the electronic media free of charges or copyrights.

Brazilian Innovation Index
The most innovative companies

High technology sectors
1o Delphi (automotive sector)
2o Embraer (other transportation equipment sector)
3o Marcopolo (automotive sector)

Medium-high technological intensity sectors
1o Silvestre Labs (chemical sector)
2o Vallé (chemical sector)
3o Natura (chemical sector)

Medium-low technological intensity sectors
1o Brasilata (metal products)
2o Faber Castell (furniture and various other items sector)
3o Usiminas (basic metalworking)

Low technological intensity sectors
1o Santista Têxtil (textiles)
2o Grendene (footwear)
3o Rigesa (pulp and paper)