Innovation in Brazil, India and South Africa: A New Drive for Economic Growth and Development INNOVATION IN THE CONTEXT OF INDUSTRIAL POLICIES IN BRAZIL July 2009 Rafael Oliva Advisor to the President
Presentation Agenda 1. Public Policies for Innovation in Brazil 2. The BNDES 3. The BNDES’ Support for Innovation: instruments
Pres esenta entati tion A on Agenda da 1. Public Policies for Innovation in Brazil 2. The BNDES 3. The BNDES’ Support for Innovation: instruments
State Policies Econom ic Policy Action Plan for S,T&I Production Education Developm ent Developm ent Policy Plan f Pla for Plan PDP PDE Growth th Accel Accelerati tion PAC PA Health Agricultural Developm ent Developm ent Plan Plan 4
The Action Plan for S,T&I (PACTI/MCT) Strategic Priorities 1.Expa pansion and d Co Consolida dation on of Nationa nal S,T& T&I System Qualify and train human resources; R&D laboratory infrastructure 2. S S,T& T&I f for S Social De Developm opment 3. 3. R R,D&I i in S Str trate tegic c Areas eas: biotechnology, health, nanotechnology, information and communication technology, space, nuclear energy, defense, renewable energy, biofuels, agriculture, biodiversity etc. 4. Prom omotion of of Techno hnological Inno nnovation in in Ent nterprises Major Goal PRIVATE R&D/GDP 1.5 % GDP 2010 in R,D&I 2010 target: 0.65% )
Production Development Policy INVESTMENT/GDP Brazilian Exports (% World) 2010 target: 21% 2010 target: 1.25% 2007: 17.6% 2007: 1.18% CAGR 2008-2010: 11,3% CAGR 2008-2010: 9.1% SMEs PRIVATE R&D/GDP 2010 target: 2010 target: 0.65% ) Increase the 2005: 0.51% number of export SME CAGR 2007-2010: 9.8% by 10%
National Expenditure in R&D (%GDP) 0.46 Mexico (2005) Argentina 0.51 Chile (2004) 0.68 India (2003) 0.78 Brazil (2008) 1.11 Russia 1.12 China (2006) 1.42 Canada 1.89 2.08 France Germany 2.53 2.68 USA Korea (2006) 3.22 Japan (2006) 3.39 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00
Private a te and governm nmental ntal i investm tment i ent in R&D ( (%) in Br n Braz azil 100 90 23 16 28 24 80 53 38 70 48 60 50 77 75 40 68 68 30 52 47 40 20 10 0 Italy (2006) Brazil France Germany Finland Korea Japan (2007) (2006) (2006) (2007) (2006) (2006) Enterprises Government
Most Brazilian researchers work at universities... Percentage of full-tim e researchers per institutional sector 2 0 0 5 44.6 Argentina 41.7 11.8 65.9 Brazil ( 1 ) 6.6 26.3 49.0 Spain 18.4 32.4 15.2 Russia 33.3 51.2 32.7 France 12.4 53.2 24.3 Germ any 14.8 60.9 25.6 Japan 4.8 68.3 15.2 Korea 7.1 76.6 13.3 USA 3.4 79.2 0 .0 1 0 .0 2 0 .0 3 0 .0 4 0 .0 5 0 .0 6 0 .0 7 0 .0 8 0 .0 9 0 .0 Business sector University Governm ent % researchers
Challenges Improve the capacity for coordination Accelerate uptake of technologies with great impact on the whole productive structure ICTs, capital goods, biotechnology, nanotechnology Mobilize the private sector Provide resources for investment in volume, costs and terms consistent with the different stages of innovation process Improve the existing instruments to characteristics of the knowledge society: the intangible capital agenda
Main advances S,T&I: a matter of the State New regulation for innovation Increased federal funds for S,T&I Improvement and expansion of existing S,T&I programs and creation of new ones
Presentation Agenda 1. Public Policy for Innovation in Brazil 2. The BNDES 3. The BNDES’ support for Innovation: instruments
Priorities Infrastructure (Energy and Transport) 1 9 5 0 Steel Work Heavy Industry – Consumer Goods - 1 9 6 0 PYMES Substitution of Imports 1 9 7 0 Basic Inputs – Capital Goods Energy 1 9 8 0 Agribusiness Competitive Integration Private Infrastructure and Exports 1 9 9 0 Privatization: Management of PND Social and Urban Development Innovation - Infrastructure – Production Capacity Today To Exports – Social Inclusion
The BNDES and Multilateral Agencies Development Banks Assets Net Equity Disbursements Bank US$ billion US$ billion US$ billion World Bank 233.6 41.5 10.5 BNDES 118.6 10.8 49.8 IDB 72.5 19.4 7.1 CAF 14.3 4.6 5.8 Source: BNDES (Dec./08), World Bank (Jun/08), IDB and CAF (Dec./08). (* ) In the World Bank, different to the others, the 12-month fiscal year ends on June 30.
Evolution of Disbursements R$ billion 9 2 .2 6 4 .9 US$ billion 5 2 .3 4 9 .8 4 7 .1 4 0 .1 3 7 .4 3 5 .1 3 4 .0 2 5 .6 2 3 .4 2 4 .1 1 9 .6 1 3 .7 1 2 .8 1 2 .6 1 1 .7 1 0 .9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 Default 2008: 0.15 (%)
Presentation Agenda 1. Public Policy for Innovation in Brazil 2. The BNDES 3. The BNDES’ Support for Innovation: instruments
The BNDES’ Innovation Policy Goal : to contribute to the increase of innovative activities in Brazil on a systematic basis Directives 1. Efforts in all economic sectors 2. Complementary to other institutions within the National Innovation System 3. By means of integration between financing and capitalization instruments Target: R$ 6 billion in disbursements between 2008-2010
The BNDES’ Innovation Policy INNOVATIVE CAPITAL FOCUS ON STRATEGY LINES INNOVATION TECHNOLOGY FOCUS ON PROJECTS NONREIMBURSABLE FUNTEC Projects in Research, RESOURCES Development and Innovation Technology Fund For micro, small and medium-sized companies Certification, conformity assessment, technology services, IP, BNDES CARD software, etc Direct Participation Funds EQUITY Criatec Program ( Seed Money )
Looking Ahead: Intangible Capitals Agenda IC A C AGEND NDA A AT T THE THE BNDE NDES: 3 3 STE TEPS IC Rat IC ating IC R C Repo port Awar arenes ess • Better • Stimulate assessment and companies to avoid p id poor r constr truct / ct / improve e allo locatio ion o of • Include topic in Intangible Capital resour ources business agendas and • Devel elop g gau auges • Stimulate public policy and scorecards to companies to evaluate credit report Intangible re Capital Tes est w t with th 40 40 Gauges es in final al compan anies es validati tion phase
Final Remarks • PROMOTING INNOVATION IS A PRIORITY OF PUBLIC POLICIES IN BRAZIL • DIFFERENT GOVERNMENT AGENCIES HAVE BEEN ENGAGED IN THE EFFORT TO BUILD • BNDES HAS WORKED TO PROVIDE A WIDE RANGE OF FINANCIAL INSTRUMENTS • Financing and capitalization • Support for companies of all sizes and of all sectors • THE NEXT STEPS • Financing side: the intangible capitals agenda • ACCELERATE THE CONSOLIDATION OF THE CULTURE OF INNOVATION 20
Innovation in Brazil, India and South Africa: A New Drive for Economic Growth and Development INNOVATION IN THE CONTEXT OF INDUSTRIAL POLICIES IN BRAZIL July 2009 Rafael Oliva Advisor to the President
Lines, FUNTEC and Card
Innovative Capital Company Innovation Innovation Investment Strategy Plan (PII) • Goal: support for innovative efforts aligned with strategies and foreseen in the companies’ Innovation Investment Plans • Eligible Items: physical infrastructure + tangible and intangible assets • Financing and/or capitalization • Minimum Amount : R$ 1 million • Cost: 4.5% a.a. (valid until Dec./2009) • Participation: up to 100% • Term of Loan: up to 12 years
Technological Innovation Project Market Originality for Technological Risk Opportunity National Market • Goal: support research, development and innovation projects with technological risk and market opportunity : products and/or new processes (for the national market) or those that are significantly improved • Financing and/or capitalization • Minimum Amount : R$ 1 million • Cost: 3.5% a.a (valid until Dec./2009) • Participation: up to 100% • Term of Loan: up to 14 years
FUNTEC Direct Investment and in lost funds Scientific and technological projects Of strategic interest to Brazil Beneficiaries : • Technological institutes and support institutes • Conditions: company intervention The BNDES’ Level of Participation: up to 90% Projects are assessed by CCTEC
BNDES Card Innovation Eligible Items: Technological extension Technicians specialized in energy Conditions: efficiency and environmental impact Beneficiaries: micro, small and Prototype Development medium-sized companies Design, Ergonomics and Model of the Limit: up to R$ 500,00, per bank Product (BB, CEF, Bradesco) Quality assessment and implementation Fixed repayments in up to 48 of the product and software process months Develop packaging Interest rate: 1.00 % a.m. Acquisition and transfer of technology (registered contracts at the INPI) Feasibility assessment and request registration of intellectual property
Capitals Market
Direct Participation: Innovative PYMES R$ million 2005 2006 2007 2008 Investments (ctd) 6 8 16 17 Amount 66.8 98.1 367.3 377.2 Average Amount 11.1 12.3 23.0 22.1 Since 1988, when support for the PYMES began via risk capital, the BNDES offered support to 99 companies, with direct disbursements of R$ 1.3 billion.
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