In my earlier posts I have been observing Brazil from different perspectives and also written on emerging relationship between Brazil and Scandinavian countries mainly focusing on Finland. I argued in my earlier blog post on innovation law that major deficits of Brazilian innovation system are lack of science and engineering education, low level of technology transfer in university-private sector relationship, and lack of R&D investment and understanding in Brazilian private sector. In this post my purpose is to understand the science and engineering education starting from basic education.

So to understand the fundamentals of education, we need to discuss the state of basic education in Brazil focusing on reading, mathematics and science (PISA). In 2000 Brazil entered to PISA evaluation performance even they are not part of OECD and came last from 65 countries. However significant improvement have occurred in last 10 years as picture from Economist article “Education in Brazil – no longer bottom of the class” shows. Accordingly this improvement is caused by simple political decisions to invest in basic education. President Cardoso decided to invest in teacher salaries and pay families to keep their children in school and President Lula continued the same line in his period.

However, just investing is not enough (estadao). In next decade Brazil aims to invest on quality of education and especially on science and engineering based education such as maths, physics, chemistry and biology and infrastructure investment such as laboratory equipment  (UNESCO). Finnish education system strengths as argued by documentary – The Finland Phenomenon: Inside the World’s Most Surprising School System -are high quality teacher education, high level teacher independency creating personal motivation for teaching, low level of class difference in education leading to knowledge transfer (no private education in Finland), high investment of national GDP to education leading high salaries and good infrastructure, high appreciation of teachers in the society, central planning for skills needed in the society and social networking of teachers changing best practices. In Finland, the state decides what should be taught, but not how. Finnish students achieve with average 25 hours weekly schooling the same results as South Korean students with over 30 hours schooling per week:

“…Finnish students, who studied only 4 hours and 22 minutes during weekdays, only half of what Korean 15-year-olds do, scored higher than Korean students in mathematics...”

Still, it is good  to remember the evolutionary perspective of development. Brazil has progressed substantially in basic education since the 1980s. The nation witnessed an increase in school enrolment for children age 7–14, from 80.9% in 1980 to 96.4% in the year 2000. In the 15-17 age demographic, in the same period, this rate rose from 49.7% to 83%.Literacy rates went up, from 75% to 90.0%. (Source wikipedia)

Earlier sections show how innovation related discussion is strongly rooted in the innovation system of the countries. Innovation is closely related to science and engineering capacity and freedom of knowledge transfer in innovation system nationally and internationally. Universities are seen as powerful research centres and producers of highly skilled human resources. However first we need to understand how to provide human resources to universities as this blog post has highlighted. Private sector, in other hand, is responsible for creating societal and economic impact of new skills and technologies.

In Brazil, universities have been performing weakly on producing highly skilled research and development human resources that would benefit the society and especially private sector, university and public research knowledge is weakly transferred to benefit the society and private sector is reluctant to invest in R&D and hiring highly skilled R&D human resources. This means that policy intervention is needed. Next post I will discuss these issues in more detail. To conclude this post:

“We need to teach how to learn, learn how to teach…”

“… and change education paradigms constantly…

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As I have written in my earlier blog posts, Brazil is becoming every day more interesting country for innovation cooperation. All Nordic countries have realized that! First, biggest ever Norwegian delegation visited Brazil in February 2011.  Second, at the same month Danish delegation visited Brazil to sign Memorandum of Understanding (MoU) on bilateral cooperation in Science, Technology, Innovation and Higher Education. Third, on May 2011 Swedish Prime Minister Fredrik Reinfeldt visited “”Sweden’s second largest industrial city” to strengthen relations with Brazil in commerce, research and innovation. And now fourth, Finnish education-research-business delegation of 123 Finns lead by Prime Minister of Finland Jyrki Katainen and Minister for European Affairs and Foreign Trade of Finland Alexander Stubb are currently visiting Brazil. I have followed the visit from Twitter @EmbFinlandia and Facebook @embaixadafinlandia. Really big thanks already for people in Embaixada da Finlândia no Brasil for democratization of knowledge!

Here comes some conclusions from first two days of the visit:

  • High minister and president level meetings (See picture above of President Dilma Rousseff and Prime Minister Jyrki Katainen)
  • Cooperation between Finland and Brazil is integrated with cooperation between Mercosur and European Union (planoalto)
  • Second biggest Finnish foreign trade delegation all time with 60 companies and 123 people in total (source: EBC and alexstubb)
  • According to Paulo Tigre from Confederação Nacional da Indústria (CNI) Brazil offers opportunities for investments in infrastructure related to projects focusing on World Cup 2014 and Summer Olympics 2016 in oil industry and renewable energy supply chains like ethanol, biofuels, wind power and hydroelectricity. (source panoramabrasil)
  • Focus sectors for Finnish business delegation are forestry, mining, metal, ICT, naval and offshore (source: VNK)
  • Focus sectors for research and development need in Brazil are in renewable energies, telecommunications, natural disaster alarm systems, naval defence and offshore (source: planoalto)
  • Science and research exchange and mobility between Universities and public research organizations (source: Ciência sem Fronteiras)
  • Finnish Technical Research Centre (VTT) and VTT Graduate School offers opportunities for 100 Brazilian researcher and PhD students in near future (source: MCT)
  • Call for Brazil-Finland cooperation in 12 Finnish Universitities (UNIFI) (source MCT)
  • Finland promissed to contribute on capacity building of Brazilian teachers and professors (source Globo)
  • Cooperation in basic education (source MCT)

Please do not hesitate to comment if you have some insight from the visit to make information and knowledge visible for all interested on education, research, business and policy cooperation between Finland and Brazil. Leave you comment below and I will add it to the list.

Traditionally, understanding of major technological inventions culminated to ultimate triumph of rational minds taking linear process from scientific research to development and market diffusion to create huge economic and social impact. These master minds are many times called as entrepreneurs and many of them see the governments with their policies rather obstacles than enabler for their market success. As I showed in my last post on – history of Brazilian innovation system – government policies can really be the major obstacle for technological development. Does this mean that they can also be the major enabler? Entrepreneurs in more developed countries, such as Finland, many times do not see the underlying factors enabling their innovative activities. Short deep dive to Brazilian innovation system gives a good change to understand the system as whole and how it enables innovation.

I ended my last post to Innovation Law which was established 2004 in Brazil. One might ask why innovation law? To understand why, it is good to mention the rationale for policy making. In the economics literature government intervention is supported by the theory of market failures. One of them is that market system does not invest optimally to research to meet needs of the society in long term. Others include for example environmental protection, occupational health and safety, meteorological services and defence as well as transportation, energy and communication infrastructures. Next I will discuss why Innovation Law is crucial for Brazilian economic, social, and environmental development and operates as major indicator for new approach to innovation in Brazil.

First we need to understand what are the major market failures in Brazil that innovation law is targeted to tackle. In September 2011 seminar on “Research Policies for Grand Challenges – Strategies and Tools” was organized in Helsinki. Professor Glauco Arbix from The Brazilian Innovation Agency (FINEP) in his presentation concluded the major misconception of Brazil for innovation in the last century:

“Innovation and technology have been conceived as by-products of economic development rather than requirements for it!”

This indicates the misunderstanding of science and technology in national development in Brazil. As seen from the earlier post, until 1980s it was assumed in Brazil that scientific and technological development will automatically emerge with economic growth and industrial development. Three major gaps in Brazilian innovation system were identified by Professor Arbix in his presentation in Finland:

  1. Lack of understanding the innovation networks causing isolated scientific research in universities
  2. Underinvestment to human resources, especially engineering education
  3. Poor innovation culture, mind-set and management causing underinvestment to R&D in private sector

Brazilian investment in R&D has increased from 1.0% in 2006 to 1.3% 2010 of GDP. In 2010 Brazil produced 2.12% total scientific publications globally, a huge increase from below 1% in 1980s. This is more than many OECD countries, but we need to understand the micro level implications of this investment, to say, policies and strategies in practice. And it is good to remember that these measurements are many times biased but give some macro level indications where to focus on micro level developments.

First, we need to understand where science and research is made in national system. In Brazil almost 60% of researchers are working in universities while for example in Germany 65% and in US 75% of researchers work in private sector. In addition, most of the scientific production is basic research in nature, and university departments are many times isolated from the society with few interactions with private sector. It is still a mystery for me from where this isolation originates?

Second, we need to understand what kind of science and research is conducted. Accordingly, Engenharia Data reveals that only 6% of researchers in Brazilian educational system are dedicating to engineering. Even there has been substantial growth in last 10 year, Brazil still lack behind in engineering education. For example in Finland around 20% graduates comes from engineering related fields. The same applies to higher education. Needless to say that this has major implications in transforming the scientific results to products, processes and services which businesses, industries and society at large benefits.

Third, as already argued, private sector in Brazil is not investing to research and development activities. Even Brazil has many global companies there are only a few innovative companies in Brazil focusing on high-tech. There is not much microeconomic level research done in Brazil on this issue. It seems that lack of science, research and innovation oriented engineers in the labour market and poor dialogue between universities and enterprises give some hints for some reasons why private sector is not investing to R&D.

As stated earlier the policy rationale to intervene in market economy is when market failures emerge. It was only 2003 when Brazilian government and business sector realized the underlying factors inhibiting innovation performance nationally. I already listed the major objectives of Innovation Law in Brazil in my earlier blog – Brazil as natural future economy:

“Brazilian innovation, technology and international trade policy including Innovation Law was launched in 2004 and it followed Good Law 2005, PAC da Ciência 2007 and Productive Development Policy 2008. Innovation Law is designed to university-industry research relationship, promote shared use of R&D infrastructure, allow direct government grants for innovation in firms and increase mobility of researchers within the system. Good Law provides fiscal incentives for private R&D investment and funding for firms hiring Masters degrees and PhDs. The subsidy can reach 60% of the salary in remote underdeveloped are such as North East and Amazonia and 40% in rest of the country up to 3 years. PAC da Ciência growth action plan for science and technology funding has increased R&D”

With this post I do not mean that there is no innovative companies, public-private partnership in science and research or talented and motivate engineers in Brazil. The fact is that there has not been systematic approach or incentives in society to innovate in broad basis. That is why policies are needed to change the course. And Brazilian government is taking this issue seriously! In 2011 The Brazilian Innovation Agency FINEP invested approx. US$4 billion for innovation related projects.

In next posts I will focus on micro level analysis of local innovation systems in Brazil, specific innovation hot-spots and innovation and entrepreneurship activities in these specific locations. For example two recently constructed hotspots are nano- and biotechnology cluster (CNPEM) in Campinas and National Center for Advanced Electronic Technology (CEITEC) in South of Brazil in Porto Alegre focusing on microelectronics. Some international companies have already noticed new trend in Brazil. IBM is opened new research labs to Brazil in 2010 in cooperation with Government of Brazil. It the first IBM research lab in Latin America and first new one in 12 years. Chinese are also investing heavily to R&D activities in Brazil. In 2011 ZTE announced the investment for technology park after agreements between Chinese and Brazilian governments which will employ around 2000 people and same year Brazilian government signed a deal with the Chinese Academy of Sciences to build a nanotechnology center in Campinas. In addition, same year German public research institute Fraunhofer is established in Brazil, Norwegian public research institute Sintef Brazil and Centro de Pesquisa e Inovação Sueco-Brasileiro (CISB). And of course the Finnish counter part Technical Research Centre of Finland established VTTBrazil Ltd. March 2011.

I visited Brazil in December 2011 for the first time in three years. In 2007 I lived more than a year in Brazil, learned speak fluent portuguese (after living two years in Argentina learning spanish and making Latin American Business studies) and worked in Finpro Brazil. I visited University of Sao Paulo (USP) Instituto de estudos Avançados (IEA) to understand better the historical development of Brazilian innovation system and future prospects.  During the flight back to Finland I decided to write on recent developments in Brazil.

Brazil is the only emerging BRICS (Brazil, Russia, India, China, South Africa) country that have not been discussed widely in Finland from innovation perspective. This is understandable as Brazil is seen distant geographically, culturally and linguistically to Finns and Finland poses weak historical political and economic relationship with Brazil. Other reason is that Brazil has been performing relatively weak in innovation performance caused by lack of coherent innovation policies, and protective legislation have been creating challenges for foreign investment (Brazil ranked 129th out of 183 countries in the World Bank’s latest Doing Business report) and innovation cooperation. However, there are signals on emerging innovation culture in Brazil and context related systemic approach need to be taken to increase strategic cooperation between Finns and Brazilians. This blog focuses on Brazilian innovation system and policy from social, economic and environmental perspectives to understand educational, scientific, technological, business model and service innovations emerging from Brazil and its fellow Latin American countries, mainly Chile.

Brazil has many times in its history praised to be the land of the future. Let’s look first on some recent developments in Brazil why it might finally fullfil the promises. First, Brazil with population of 190 million, the past eight years “Bolsa Familia” social program have lifted over 40 million Brazilians out of poverty and into middle class. This creates interesting platform for creating context related innovations and scaling bottom-of-the-pyramid innovations (disruptive and reverse) globally. Second, Brazil was almost non-effected by financial crisis 2008, a signal for strong and stable macro-economic policies. This means that Brazil, first time in its history, is becoming an interesting country for long term investment and strategic cooperation. Third, Brazil is hosting Football World Cup in 2014 and Summer Olympics in 2016. This will increased investments on infrastructure development and pressure for Brazil to show its true nature internationally. Growth Acceleration Program (PAC) 2011 – 2014 invests US$526 Billion to sanitation, crime prevention, basic health clinics, savings and loan systems, electricity and water for all, logistics, and energy. Fourth, deep sea oil field discovered 2007 will double or in most optimistic estimates tenfold Brazil’s current 16 billon barrel oil resources. Combined with bioenergy and wind energy production and hydroelectric resources Brazil is becoming a global energy power and profits from these resources create funds for future investments and development. End of 2011 U.S. finally opened its markets to Brazilian ethanol which will boost the sales in the future. Fifth Brazilian climate change law requires reduction of greenhouse emissions by year 2020: 36 – 39% below 2005 levels and 80% reduction in deforestation puts Brazil in forefront on fighting against climate change. And last strong primary economy from iron ore to soy beans will continue to boost national financial resources driven by explosive demand growth in China and India. In 2005 there were only 3 companies (Petrobrás, Banco Bradesco and Banco Do Brasil) in Fortune Global 500 list as in 2011 there were total 7 companies (4 new companies Vale, JBS, Itaúsa-Investimentos Itaú and Ultrapar Holdings). Other primary economy companies are Aracruz, Votorantim and Gerdau. Emerging higher technology Brazilian companies are aeronautic company Embraer, automobile part producer Marcopolo, cosmetics company Natura and Information technology provider Totvs.

To change course from primary economy to knowledge based economy Brazil have implemented several science, technology and innovation (STI) policies. Brazilian innovation, technology and international trade policy including Innovation Law was launched in 2004 and it followed Good Law 2005, PAC da Ciência 2007 and Productive Development Policy 2008. Innovation Law is designed to university-industry research relationship, promote shared use of R&D infrastructure, allow direct government grants for innovation in firms and increase mobility of researchers within the system. Good Law provides fiscal incentives for private R&D investment and funding for firms hiring Masters degrees and PhDs. The subsidy can reach 60% of the salary in remote underdeveloped are such as North East and Amazonia and 40% in rest of the country up to 3 years. PAC da Ciência growth action plan for science and technology funding has increased R&D funding from 1.0% of GDP in 2006 to 1.13% of GDP in 2009. This percentage and growth can be considered remarkable as 30 years ago there was almost no infrastructure for scientific research.

Corruption referred as “mensalão” is the only single threat slowing down the Brazilian development and cause of high inequality! In end of 2011 Brazil passed UK becoming 6th largest economy globally. Continuing these developments, Brazil is expected to become the world’s fourth largest economy by 2030, behind China, US, and India. All this have not been and not will be possible without improvements in innovation performance. Future blog posts weekly will focus on different aspects of innovation in Latin America. Even “innovation” is considered many times confused term refering to political, economic, social and environmental development, I will carefully follow state-of-the-art academic and intellectual stream on using this term and provide insight on using this term in development rethorics.

I hope the Finnish approach to Brazil will change and take strategic stance when Finnish education-research-business delegation lead by Minister for European Affairs and Foreign Trade of Finland Alexander Stubb and Prime Minister of Finland Jyrki Katainen will visit Brazil in second week of February!

Please comment and add your insight on recent develpments in Brazil!

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