Creativity + Innovation + Investments = Opportunities
Brazil´s government objective lies on creating an engine of growth based on innovation, upgrading its national industry, and creating competitive advantages on a global scale, whereas spending on Research, Development (R&D) is essential.
The country is increasing the spending on R&D and taking vigorous actions to improve its innovation ecosystem. Brazil´s vibrant economy is ready to take the next step and enter the league of countries driving technology innovation in the world.
The Brazilian innovation legal framework is being updated and globalized, since having proper legal arrangements are crucial to support innovation for large-scale companies, including guarantees that the R,D&I investments are protected through solid Intellectual Property (IP) policies.
The increasingly favorable environment for innovation provided by public policies and regulations, coupled with the strengthened Brazilian economy, has attracted public and private investments. In the last 10 years, Brazil has attracted the attention of several global companies willing to enlarge its R,D&I projects or to establish research centers in the country.
Innovative companies such as Google, Intel, General Electric, Whirlpool, Boeing, IBM, Microsoft, Siemens, Qualcomm and BG Group, among others, already have R&D Centers in Brazil.
Funding and Incentives
The Brazilian government provides different financial incentives with the main purpose to improve the financial conditions (through tax reductions, favorable financing conditions, among others) and allow companies to expand and allocate more resources to R,D&I.
The Lei do Bem, Good Law (no. 11.196/05), consolidates several tax incentives benefiting corporations that conduct research and development on technological innovation. Some key incentives are:
- Deduction on all expenses related with operational expenditures with R,D&I , for tax income calculation purposes;
- 50% Tax reduction over the Industrialized Goods Tax (Imposto sobre Produtos Industrializados), destined to R,D&I;
- Full amortization, within the year of acquisition, of all new equipment and machinery utilized during R,D&I activities;
- Accelerated amortization of goodwill expenses destined to R,D &I activities;
- Exemption of income tax for remittances destined for the registration of trademarks, patents, and cultivars abroad.
The country has also been developing a quite comprehensive portfolio of funding sources for companies of all sizes and stages of development, while enhancing coordination and collaboration between several federal entities that provides financial support to R,D&I.
One important financial incentive recently launched in 2013, the Plano Inova Empresa, specifically targets innovation activities across different sectors as a key mechanism to increase productivity and competitiveness in the Brazilian economy. With a total investment expected of US$16.8 billion between 2013 and 2014, it offers greater support of high-risk technological projects and strengthens of the entire innovation ecosystem.
A well-qualified workforce is a key attribute for the development of a strong R,D&I, as it impacts the quality and time to market of projects at both academic and enterprise levels.
Having that in mind, Brazil has invested to expand its undergraduate and postgraduate courses. The number of undergraduate students increased at a compound annual growth rate (CAGR) of 9.8% from 1,206,273 students (2001) to 2,346,695 students (2011) representing a CAGR of 6.9% over the period.
Also critical to the advancement of S,T&I, the volume of MsC and PhD graduated in the country have witnessed a growth rate of 312% and 332%, respectively.
Figure 52: Number of Master and PhD Students, Brazil, 1996–2011 - (Source: CGEE)
Knowledge created by this educational sector represents a fundamental component on the development of innovation – since the focus on innovative ideas or thesis (PhD) on the incremental knowledge derived from existent theories. From 1994 to 2011, the number of published academic articles in Brazil increased by 556%.
The country has been rapidly approaching the top ten group of countries that publish high-level scientific papers (with approximately 2% of total) and is the leading country in Latin America.
In 2011, in order to build and promote a world-class workforce in R,D&I the Brazilian Federal Government created the “Science without Borders Program” (Programa Ciência sem Fronteiras) with the goal to offer 101,000 scholarships to the best Brazilian university students. These students will undertake research in the best and most relevant universities around the World. It is a mobility program that aims to launch the seeds of what will revolutionize the Brazilian R&D system.