Having lost the main battles of the eighties and nineties to promote the transition from the traditional industrial structure (based on the old metal-mechanics and chemical sectors) to the new industries (based on electronics and science-based activities), the Brazilian industry was however able to gain in terms of efficiency and productivity. Some high-tech sectors – like electronics – were ruined and almost disappeared; and some others – such as pharmaceuticals – were reduced to some stages and to specific cantons. Nevertheless the remaining industries, under pressure for several years, were able to restructure and gain competitiveness. In the early nineties, their first move was directed mainly towards static efficiency, something that other countries also underwent. In recent years, these industries have redirected their efforts towards dynamic efficiency, pursuing strategies that increasingly encompass efforts on technology and innovation. The point to be hold here is that firms from sectors that have their structure deep-rooted in the Brazilian economy have been effective in taking innovative trajectories, which go beyond the diffusion of solutions already known.

It is worth to emphasise that such innovative trajectories may not correspond to the internationally well-know sectoral patterns of innovation. To understand the nature of technological efforts and innovation in these countries, one cannot just take into account the technological intensity of industrial sectors according to R&D levels in developed countries. For instance, the OECD classification defines technological intensity of sectors according to R&D expenditures undertaken by firms on the developed countries, most of those firms being multinational corporations. Given R&D activities are rather centralized within OECD countries, it is reasonable to claim that technological intensity of industrial sectors in the developing countries may well be rather different from the established patterns of the developed ones. Therefore, sectors which are high technologically intense (the high-tech) in developed countries (where most of R&D resources are invested) cannot be seen from the same perspective in countries where R&D investments are at a quite low level. In a previous research Costa and Queiroz (2002) note a non direct correlation between technological intensity and technological efforts carried out at sectoral level. For instance, considering an index for technological efforts (based on R&D personnel), they observe that high tech sectors (like pharmaceutical, electronic material & telecom equipment, and medical, precision & optical instruments) scored relatively low, while low tech sectors (like food & beverages and rubber & plastic products) had higher scores.

Having highlighted this point, the paper looks at the nature of and technological efforts at firm level considering both high tech and traditional sectors, and taking into account their competition pattern.

The OEI data base

For carrying on its purpose, the paper draws upon the Brazilian Observatory on Strategies to foster Innovation (OEI), a broad study, intended to consolidate an information system on technological and innovative strategies. The OEI has been developed to and sponsored by The Federal Agency to Foster Science, Technology and Innovation (FINEP), linked to the Ministry of Science and Technology (MCT). It has been carried out (over the last two years) by a network of academic researchers from different Brazilian universities and institutes. The OEI sample covers more than 450 firms of 33 industrial sectors, and 200 technology-based firms . A detailed questionnaire was designed for the OEI, which was applied on face-to-face interviews, to gather information and build further understanding on innovation and technological efforts undertaken by the private sector in Brazil. It is worth to mention that the OEI questionnaire was designed to distinguish between innovation as diffusion from innovation as the result of inventive efforts. Such a distinction, proposed by Arundel et al. (1998), is very useful to understand the nature and intensity of technological innovation, as well as the role played by different actors, the kind of technological effort undertaken and its motivations. The sectors covered by the OEI have different levels of technological intensity, from the aircraft and semiconductors industries to agro industrial ones, like meat and coffee industries. Moreover, some specific questions were designed in order to get further information on technological activities by foreign affiliates, which account for almost half of the OEI sample.

In line with the argument hold in this paper, and based on the field research already carried out, we can state that firms of some of more traditional sectors present levels of innovation that can be compared with those of high tech sectors. The explanation seems to be that firms from traditional sectors have strategies towards innovations in order to find solutions for their current problems and to react to market pressures. Also, the structure and competitive dynamics of traditional sectors tend to be the ones more strongly rooted within the Brazilian economy, a feature which is not necessarily linked to ownership of capital, meant domestic or foreign.

Government Policy Implications

A deeper understanding on the nature and intensity of innovation process, its main actors and their technological efforts is crucial for the design and implementation of government policies, particularly science & technology, and industrial policies. Thus, this paper contributes to the debate on S&T policies in developing countries, where the dynamics of high-tech sectors may not be rooted on local R&D efforts, while firms from traditional sectors present a tendency towards innovation – even if incrementally – guided by their competition strategies. Government policy to be effective in fostering innovation must be aware not only about the sectors but also the actors which are more locally engaged in, and then more promising to strengthen local economy.

References

Arundel, A. et al. (1998). The future of innovation measurement in Europe: concepts, problems and pratical directions. STEP Group/IDEA, 1998. (Paper Series IDEA 3). Available in: www.step.no/projectarea/IDEA/papers.htm.

Costa, I (2003). Empresas Multinacionais e Capacitação Technológica na Indústria Brasileira (Multinational firms and technological capability building in the Brazilian industry). D-Phil Thesis on Science and Technology Policy. UNICAMP, Department of Science and Technology Policy. Available in: www.finep.gov.br/portaldpp (only available in Portuguese)

Costa, I. and Queiroz, S. R. R de (2002). FDI and technological capabilities in Brazilian industry. Research Policy, Special Issue, v.31, n. 8/9, 2002.

Furtado, J. et al. (2003). FDI and Technology Policies in Brasil. EAEPE Conference 2003 (Proceedings…). Available in: http://eaepe.infonomics.nl/papers.htm.