Innovation in Brazil by Reynolds Elisabeth B.;Schneider Ben Ross;Zylberberg Ezequiel;

Author:Reynolds, Elisabeth B.;Schneider, Ben Ross;Zylberberg, Ezequiel;
Language: eng
Format: epub
Publisher: Taylor & Francis (CAM)
Published: 2019-03-13T16:00:00+00:00

All of the above sapped the ability of ST&I policy to coordinate government action and weakened the sectoral fund model. To a large extent, the dismantling of sectoral funds began within MCTIC itself as MCTIC began to allocate resources more generically and to reduce support for the sector-specific actions needed to consolidate an innovation system.

Industrial policy coordination: ABDI and Inova Empresa

Brazil’s three most recent industrial policy initiatives – the Industrial, Technological, and Foreign Trade Policy (PITCE), the Production Development Policy (PDP), and the Brasil Maior (Greater Brazil Plan) – provide excellent opportunities to assess the federal government’s coordination capacity.10 All of these policies faced coordination problems. Despite some creative solutions, policy outcomes underscore the difficulty of addressing these challenges.

While PITCE adopted an explicit focus on innovation and on sectoral policies, the coordination problem was obvious from its inception, since the MCTIC and the National Bank for Economic and Social Development (BNDES) did not participate in the first year of policy design (2004). Nonetheless, there were attempts to build consensus between the economic ministries and the Ministry of Development, Industry, and Foreign Trade (MDIC) through informal committees or sectoral chambers linked to the Office of the President of the Republic. Coordination efforts were somewhat successful later on, when a new minister for S&T and a new executive board for BNDES were appointed.

Two institutional innovations were introduced to address the coordination problem. The first was the creation of the National Council for Industrial Development (CNDI), which included several ministers and business representatives. PITCE’s initial design did not contemplate the CNDI, which was created in response to industry lobbying. The second institutional development was the creation of the Brazilian Industrial Development Agency (ABDI)11 “to promote industrial and technological development … by fostering competitiveness and innovation.” ABDI’s vision was “to accelerate the process of bringing industry to a new competitiveness level”; its objective was “to coordinate and implement PITCE in interaction with the relevant government entities and with the business community.”12 ABDI faced an immense task: being a quasi-government body (“para-estatal”), how could it coordinate actions involving several ministries and sectoral entities? Specifically, how could it coordinate the activities of BNDES, the government’s main industrial policy player?

Indeed, creating an external agency to serve a coordination role proved problematic. Some of the provisions in the statute that created ABDI and defined its mission ended up being vetoed by Brazil’s president when the statute was enacted.13 The reason for the veto was clear: a quasi-government body must not carry out activities that constitute the sole responsibility of the state. According to the statement justifying the veto, policy implementation “falls under the exclusive purview of the Ministry of Industry, Development and Foreign Trade, which is a Federal Government entity.”14

In addition to the CNDI, which met 14 times from 2004 to 2006, other spaces for public/private coordination emerged such as competitiveness forums (“fóruns de competitividade”), sectoral and thematic chambers, and working groups. PITCE’s results are widely considered to have been modest when compared to its original ambitions. PITCE proved to be more of a framework for government action than a concrete action plan.

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