Newsletter Edition 41 - November 2022


Brazil: there is light at the end of the tunnel

Even though the Brazilian economy is unfavorable regarding productivity and innovation, “there is light at the end of the tunnel”. The assessment was provided on November 17 by economist Zeina Latif, from Gibraltar Consultoria, in the round table “Innovation expectations: post-election Brazil” promoted by ABPI’s Corporate Committee. “I do not believe in total regression. Even with setbacks, there is a path to advance in the growth resumption agenda”, she said. “Although in a situation of low competitiveness, we are improving”.

Mediated by the coordinator of the Corporate Committee, Patrícia Gestic, the event also had the participation of the president of ABPI, Gabriel Leonardos, the representative of WIPO (World Intellectual Property Organization), Sacha Wunsch, and the manager of the Planning and Institutional Relations at EMBRAPII, Cristiane Rauen. In the debate, Leonardos reinforced the industry’s role in growth resumption. “Only industry can generate innovation, social mobility, and dynamism. And the industry must be environmentally and socially sustainable,” he said.

For Zeina Latif, the business environment in Brazil is still unfavorable due to legal uncertainty, political discontinuity, macroeconomic volatility, the fiscal crisis, and tax litigation, among other reasons. “Our industrial production has been stagnant since 2010, and our technological park has a technological lag of 30 years”, she stated. Still, Latif assessed that some successes allow Brazil to grow again. In this sense, she pointed out the decrease in patrimonialism; the redefinition of the role of the BNDES (Brazilian National Bank for Economic and Social Development), which is expanding the spectrum of financing for companies; and the growth of the capital market. “There is demand from the private sector for a liberal agenda,” she explained.

In her presentation, Cristiane Rauen presented expressive figures about the performance of EMBRAPII, a social organization qualified by the Federal Public Power that supports research institutions promoting innovation in Brazilian industry. With nine years of existence, the company has already supported 1,797 projects demanded by 1,246 companies, totaling resources of around R$ 2.5 billion. EMBRAPII, which finances up to 50% of the projects with non-reimbursable resources, has already invested R$ 830 million in R&D projects in partnership with companies and research institutions.

The scenario of moderate optimism regarding the future of Brazil has been confirmed by the data referring to the Global Innovation Index (GII) presented by the WIPO representative. According to Wunsch, in this regard, Brazil has made significant leaps in recent years: it holds second place in the Latin American ranking and, for the first time, appears among the 18 best economies in the region.

Of the seven pillars of the GII, Brazil has not grown only in “Institutions”. A highlight was the strong growth in the “Market sophistication” pillar (referring to the availability of funding for innovation), which was the weakest in 2019.

Among Brazil’s weaknesses presented by the GII are challenges related to policies for the business environment and entrepreneurship.

Watch the webinar on ABPI’s YouTube Channel.