Charting new directions: - Alfred Herrhausen Gesellschaft

Charting new directions: Brazil’s role in a multi-polar world 21Navigating thelabyrinth: innovationand developmentGlauco ArbixBrazil is at a key stage in its economic development.It has weathered the global financial crisis betterthan most countries and demonstrated high ratesof economic growth over the last decade. Yet, theBrazilian economy also faces significant challenges,including an appreciating real and competition fromcheap imports that threaten the industrial sector. In aninterdependent and globalised economy, innovationhas a significant role to play in spurring growth andhelping national economies find their distinctive niche.In Brazil, there is a new emphasis on innovation thatcomes from the recognition of the need to diversifythe economy, to expand exports and to increase theeconomy’s productivity and competitiveness. It isalso an area where, though Brazil has made a lot ofprogress in the recent past, it still has a long wayto go.The ecosystem of innovationThe debate about the meaning and potential ofinnovative practice still suffers from conceptualconfusion and it is important to differentiate innovationfrom invention. While invention and innovation areconnected by a continuum, innovation refers to a firstcommercialisation of an idea or project. Therefore,the sphere of innovation is a company, capable offine-tuning production and marketing, while inventionhas a different orientation and occurs in laboratories,universities and research centres. The transformationfrom invention to innovation does not always happenquickly and requires different types of knowledge,abilities, skills and resources.It is often the start of competition between firms,usually based on small changes, addition or copies,which enables the evolution from an inventioninto a viable product for the marketplace. Indeed,innovation is the result of extensive processes ofimprovement and redesigns, which may or may notinvolve technology, academic research or appliedresearch. All processes, discoveries, new productsand services, whether high-tech, low-tech or notech,that add economic value are innovations. Subtlemechanisms, seemingly minor and unimportant, areoften the real engines of the economy rather than bigleap advances in high technology.However, it is not easy to visualise the innovationprocess in all its breadth. Innovation often goesbeyond the horizon of business and developsthrough an extensive network of employees. Indeed,its commercial aspect is only one of its many faces.The web formed involves companies, entrepreneurs,researchers, distributors, academic institutions andconsumers, and creates a highly diverse and complexinnovation ecosystem. There is no ready recipe forguidance in this environment that, despite recentadvancements, still resembles a labyrinth.Brazil’s legacy and recent developmentsBrazil is a country that industrialised late and theprocess of developing science and technologyresearch only began in the 1970s, and was basedmostly at universities and research institutions. It isalso important to keep in mind that Brazil experienceda long period of macroeconomic instability in the nextdecades which significantly influenced the agendaof government, academia and business. As result,there was a low priority assigned to the economicsof innovation in the 1980s and early 1990s.The perspective began to change as the Brazilianeconomy stabilised and responded to the dynamicsof globalisation. In the late 1990s, sector funds wereintroduced to make resources available for researchNavigating the labyrinth: innovation and development | Glauco Arbix