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close this book Laying the foundation - The institution of knowledge in developing countries
close this folder Part II The institutionalization of science in Latin America
View the document Chapter 3 Institutional development of basic sciences
View the document Chapter 4 Institutional failure or success: variables affecting agricultural research
View the document Chapter 5 Institutional development of research in economics
View the document Chapter 6 Institutional development of educational research
View the document Chapter 7 Industrial research and development institutions in brazil

Chapter 7 Industrial research and development institutions in brazil

Jacques Marcovitch and José Adelino Medeiros

This chapter looks at the origins, development, and performance of technological and industrial research institutes in Brazil. Although the discussion here is based on the Brazilian experience, some of the conclusions may apply to other Latin American countries as well.

Technological research institutes and technological centres within corporations and universities bring scientific and technological knowledge to industry and play a key role in the acquisition and transfer of technology. These centres facilitate technological innovations involving products, processes, and services. These bodies are able to act as intermediaries between academia and industry and to connect scientific and empirical knowledge with the production process because they understand and function in both worlds. They generate technology by transforming scientific and technological research into technological innovations.

These institutes fall into four main categories:

· Public institutes for technological and industrial research (federal and state institutes),

· Private institutes for technological and industrial research,

· Technological research centres connected to universities, and

· Technological research centres run by industry.

Despite the crisis that currently threatens their survival, these institutes have played and will continue to play a crucial role in Brazil's technological development. They have emerged to bridge the gap between industry and academia that exists in most developing countries. Universities often find it difficult to establish links with industry. They may fear that efforts to apply research to production would divert the university from its main goal, which is to train human resources and contribute to the development of knowledge. Technological research centres take advantage of the efforts, human resources, and equipment of universities to connect industry to the sources of knowledge.

The excitement that greeted the development of these institutions in the 1970s was soon overshadowed by the costs of the 1980s. So far, there are no signs that the scientific-technological sector will be revitalized; a radical reorientation is needed. The economic instability in Latin America has impeded many attempts to produce long-term results; the biggest casualty has been scientific and technological development projects.

With few exceptions, the scientific and technological apparatus has become outdated and stagnant, owing in part to the lack of enthusiasm shown by individuals involved in it. As a result, Latin America has fallen even further behind countries that lead the way in science and technology. However, this situation has laid the groundwork for the adoption of realistic and consistent measures that can stimulate technological and industrial research.

 

Trends in Science and Technology in Brazil

Brazil's significant scientific and technological progress has been fragmented and dispersed throughout certain areas of knowledge and economic sectors. In the 1980s, Latin America experienced an economic and fiscal crisis that contributed to the deterioration of higher education in Brazil. At the same time as the frontiers of scientific and technological knowledge were being pushed back on the international level, science and technology in Brazil was suffering a severe setback.

Scientific and technological development was the subject of much discussion during the 1989 presidential election campaign in Brazil. The authors of this chapter were given access to questionnaires completed by presidential candidates as part of a survey conducted by the Brazilian Technology Magazine for CNPQ. This material was published in the interviews of Mascarenhas (1989) and provides the basis for the following discussion.

According to the CNPQ survey, defining a medium- and long-term strategy for developing science and technology and giving the sector top priority would require that

Brazil must increase its investment in science and technology, carry out a more strict coordination and articulation of activities and choose priorities and routes for research and training of human resources in a careful and steady way.

Decisive action on the part of the state and a comprehensive reformulation of the actions and strategies of technological research institutions, as well as of national productive and economic sectors, are essential. These subjects are of particular interest for the analysis under consideration.

As Brazil enters the 21st century, its technological development and links to the industrial sector still do not occupy a well-defined and durable space. Brazil does not compare favourably with other nations. Currently, Brazil invests about 0.6% of its gross domestic product (GDP) in science and technology; Italy invests 1.5%; Korea, 2%; Japan, 3%. Brazil has 400 researchers per million inhabitants; Italy has 200; Korea, 2000; Japan, 6000. In Brazil, the private sector's proportion of total investment in science and technology is 8% (in Italy it is 30%; in Japan, 72%) .

Although some progress has been made in scientific and technological development in Brazil, there have also been countless setbacks and a lack of firm and consistent policy guidelines. Some scientific and technological developments must be stimulated selectively, and stagnation must be identified along with human resources involved in education.

According to Marcovitch (1990, p. 28) the scars of recent economic failures still affect science and technology in Brazil today. The government has dealt with urgent problems through confrontation or "clashes": turbulence, crises, and collapses are all part of the country's socioeconomic context. Unrest turns into a crisis, a crisis into a collapse, and, before a collapse turns into chaos, a "clash" approach is adopted, leading once again to unrest.

In recent years, industrial and technological policies have suffered from such an approach. The former government took many years to develop such a policy, which was finally announced in May 1989 in an atmosphere of great anticipation. The plan included concrete projects and seemed to have both internal and external consistency. Unfortunately, its regulation was distorted by the guidelines followed. A year later, the productive sector was no longer a priority, and technological development programs had not been strengthened.

In 1990, the current government introduced two documents vital to the country's industrial and technological policy: General Guidelines for the Industrial and Foreign Trade Policy, in June, and Support to Technological Training in Industry, in September. These documents advocated a more efficient use of the market, a substantial reduction in incentives, tariff protection, and the competitive reconfiguration of industry through an increase in productivity and the adoption of international quality standards. The Brazilian Quality and Productivity Program supports these activities.

The impact of the new policy should be carefully monitored. Enhancing the competitiveness of Brazilian firms abroad will require strengthening the domestic market through better income distribution. A company's export capacity depends on economies of scale, which can be adversely affected by a consumer market weakened by inappropriate income distribution.

The sectors generating technological progress were given special attention in Brazil's industrial and technological policy in light of their overall contribution to modernization and economic development. The proposals anticipated such activities as identifying selective markets, products, and services capable of maximizing the impact of new technology. According to the plan, Brazil's technological infrastructure was also to be updated. Efforts were to be concentrated on modernizing research institutes, laboratories, and university research centres and, in the future, creating new institutes in emerging areas.

 

Technological and Industrial Institutions in Brazil

Industrialization in Brazil reached its peak after World War II. There was a decline in the foreign demand for primary products and a reduction in import capacity. Brazil's industrial machinery overcame these problems by adopting a model of import substitution, emphasizing the production of consumer goods with technology from abroad. This marked the beginning of a technologically dependent industrial structure. This hurt the capital goods industry, which favoured the production of consumer or intermediate goods.

According to Kataoka (1987, p. 29), it was later recognized that the import substitution policy could not accelerate industrial growth. Since 1967, different measures have been taken. These new measures were geared toward encouraging the export of manufactured goods as well as expanding the domestic market for durable consumer and capital goods.

The period between 1968 and 1973 was characterized by serious stagnation in Brazil's development and the beginning of explicit technological policy. A study by Gusmao (1987) shows a noticeable increase in exports and significant public investment during this period, which led to a major expansion of the productive segment of the state apparatus. Industrial research institutes proliferated; approximately 60% of these centres were created between 1966 and 1980. There was also a more profitable use of existing capacity, especially in projects that provided technical support to infrastructure activities.

This chapter provides a profile of these institutions and exposes the thinking behind the scientific-technological base that existed in the country up to the late 1970s. It also discusses the problems that emerged in the 1980s and persist today.

Tables 1, 2, and 3 classify industrial technology institutions and centres in Brazil by type, date of establishment, regional distribution, and size (number of employees). Research institutions run by federal and state governments are worth considering given their number and size. Although the number of university centres appears to be higher (28 against 25), it is obvious that they have fewer employees than government institutions. Other factors that must be taken into account are the concentration of institutions in the southeastern and southern region and the low participation of the private sector in technological research activities.

Table 1. Distribution of industrial-technological research institutions in Brazil (1985) according to founding date and institutional category.

Founding date

Federal and state institution

Private institution

University- related centres

Industry supported institutions

Total

Up to 1955

7

1

2

1

11

1956-1965

3

1

2

1

7

1966-1975

12

-

15

3

30

1976-1985

3

3

9

2

17

Total

25

5

28

7

65

Source: Gusmao (1987, p. 29).

Table 2 Distribution of industrial-technological research institutions in Brazil (1985) according to region and institutional category.

Region

Federal and state institution

Private institution

University- related centres

Industry supported institutions

Total

North

-

-

-

1

1

Northeast

4

-

1

1

6

Centre-west

-

-

-

1

1

South

3

1

12

3

19

Southeast

18

4

15

1

38

Total

25

5

28

7

65

Source: Gusamo (1987, p. 30).


Table 3 Distribution of industrial-technological research institutions (% in parentheses) in Brazil (1985) according to number of employees and institutional category.

In assessing the current situation of technological research institutions in Brazil, it is clear that the relationship between government research institutions and the industrial sector is precarious and interrupted. Although there are some successful cases, the activities of most research centres do not meet industrial needs.

The problem lies mainly with public-sector technological research institutions. Other types of centres have less conflictual situations in spite of current problems. These are the captive centres of industries such as auto parts, for example; sectoral institutions for technological research in state-supported monopolies such as oil, telecommunications, and electricity; and, finally, university foundations with links to the productive sector, such as the one at the Universidade de Sao Paulo.

A common problem of research institutions is that they deviate from their original objectives. It is true that some so-called pure research can be carried out at technological research institutes, and it is also possible for research institutions to complement the training of human resources according to the needs of specific fields However, these activities should be seen as secondary to the primary objectives of technological research institutions. The costs associated with additional activities should not consume more than 20% of institutional budgets under normal conditions.

The anomalies were verified in several Brazilian research institutes that duplicated the role of the university. The constant changes in government programs imposed on those institutions and the obsolete laboratories made the situation worse. Researchers and politicians tend to be more concerned with the success or failure of research projects than with analyzing the performance of research institutions. Gómez (in Chapter 2) reminds us how important it is to study the performance of research institutes and the variables associated with their creation, development, and performance. In any analysis one must bear in mind the objectives of the institution (specialized versus diffused); the kind of technological information generated (routine versus creative); the type of penalties (individual versus collective); and, finally, the environment surrounding the institution (calm atmosphere or competitiveness).

The majority of institutions mentioned have not become instruments to support the technological development of Brazilian industry. As Souza Neto (1986, p. 92) has pointed out:

Industries have used other means to obtain technology... Acknowledging the heterogeneity among institutes, there were few successful examples of development and technological transfer for the national industry and, even less so, cases of contracts for joint development action.

Data from Souza Neto shows that state research institutions most frequently relate to industry through analysis, essays, consultancies, and technical assistance. These institutions are not sufficiently structured or instrumental to provide leadership in the generation or transfer of technology. Even successful cases have not resulted in awards for the researchers involved. These institutions must increase efforts to strengthen relations with industry and develop new technologies. The strategy adopted must give them autonomy and flexibility; it must also function to diversify and strengthen the financial participation of government.

These institutes were conceived as government instruments to support the technological development of national enterprise. However, this objective has not been achieved. The researchers' fees and the configuration of the institutions have precluded attainment of their goals. They have ended up reproducing parameters of many Brazilian universities that do not favour relationships with the productive sector.

Brazil's National Space Research Institute (INPE) was created by the federal government in 1961. Today, with 1 500 employees, INPE is in charge of carrying out civilian research and development activities related to space and its applications.

A study by Kataoka et al. (1987) suggests that researchers are the main source of project ideas used by institutions. These ideas may be inspired by technical publications and exchanges with other organizations, or based on previous training and experience. This immediately leads to the "science-push" position. To benefit from research efforts, the community of users must ensure that institutional activities are transferred. This has in fact occurred with two important products from INPE, meteorology and remote sensors.

In Brazil, activities related to space technology do not have a high enough volume of production to motivate major industry participation. Other countries developing space technology, such as France and the United States, have adopted better interaction mechanisms between research centres and industry.

In Brazil, a split occurred between INPE and industry when INPE adopted, in its technological segment, mechanisms similar to those used in space science and in applications (meteorology and remote sensors). Government hesitation and changes in the state structure also helped to discourage interaction with industry.

The position of Brazilian industry on research institutions has been highlighted in a study by the National Confederation of Industry (CNI 1988, p. 19). It states that there is little integration between universities, research institutes, and productive enterprise. It also argues that in spite of the existence of some centres of excellence with a highly reasonable level of integration with industrial enterprises, there is still a rather high lack of communication between the research activities conducted in universities or research institutes and industrial enterprises; 65% of the entrepreneurs participating in the Brazilian Industry Competitiveness Evaluation Group consider that the stare of such integration is inadequate.

Several factors inhibit a productive relationship between research institutions and industry:

· Industry's lack of preparation to receive development, in terms of technical training;

· Lack of integration between industry and the research institution from a project's inception (teams should work together, using the facilities of the research institute);

· Problems with adequate technical documents;

· Uncertainty about the nature of the enterprise to receive technologies or processes developed by research institutes;

· Difficulties in contractual negotiations surrounding the transfer of the technology between the institute and the entity receiving it; and

· Limited institutional effort expended in stimulating and strengthening technology transfer and the link to industry.

From the standpoint of industry, the consequences of the separation between research institutions and enterprises are

· The existence of techniques developed by research institutions that have not been commercially explored;

· The presence of an interaction that allows the research system to explore matters with the capacity of economic application; and

· The presence of a rigid entrepreneurial attitude that is not inclined to look for technological solutions outside company walls.

Kataoka et al. (1987) also looked at the other side of the coin by analyzing a sample of three technological research institutions. The most serious problems and consequences identified were

· The departure of qualified personnel due to low salaries reduces the level of technical experience;

· The lack of formal technical documents during project implementation makes technological transfer more difficult for the client;

· Bureaucratic obstacles to importing equipment needed for projects discourages the adoption of new research and development lines and inhibits the technological innovation process;

· Cumbersome management practices and limited use of consistent criteria and techniques for evaluation, planning, and project control result in poorly conceived projects and cost overruns;

· A lack of specificity in allocating project funds means that allocation is done without a plan and only when needs arise. This can result in