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Helena Tenório Veiga de AlmeidaHead of Program Design and Operational Policies Department
Helena Tenório Veiga de AlmeidaHead of Program Design and Operational Policies Department
Information Meeting on Intellectual Property Financing
WIPO, Geneva
March 10, 2009
Information Meeting on Intellectual Property Financing
WIPO, Geneva
March 10, 2009
Presentation Structure
• Highlights of BNDES – 5 min
• IP Financing Strategy – 10 min
• Innovation Numbers in Brazil – 5 min
• Intangible Assets Evaluation Project – 5 min
Highlights of BNDES
Founded in June 20th, 1952
100% state company under private law
Key instrument for implementation of Federal
Government industrial and infrastructure policies
Main provider of long-term financing in Brazil
Emphasis on financing investment projects
Brazilian Export Bank
Equity investor through BNDESPAR
Innovation
Infrastructure
Industry Competitiveness
International businesses of Brazilian
companies.
Exports
Social inclusion
Environment
Areas of Activity
BNDES vs Multilateral Banks
IDB = Inter-American Development Bank
IBRD = The International Bank for Reconstruction and Development (World Bank)(*) Unlike other institutions 12 months fiscal year ends June 30th
CAF = Corporación Andina de Fomento
US$ millon BNDES IDB IBRD CAF
31/12/2007 31/12/2007 30/06/2008* 31/12/2007
Total Assets 114,409 69,907 233,599 12,597
Shareholders' Equity 14,070 20,353 41,548 4,127
Net Income 3,827 134 1,491 401
Loans Disbursements 33,962 6,725 10,490 5,844
Total Loans 92,885 47,954 99,050 9,548
Capitalization 12.3% 29.1% 17.8% 32.8%
ROA 3.8% 4.7% 1.9% 3.6%
ROE 33.2% 0.7% 6.0% 10.5%
Non performing loans 0.11% 0.10% 0.47% 0.01%
Founded 1952 1959 1945 1968
• BNDES Innovation Strategy
The argument
Development in Knowledge Economy = Promote Innovation
Commercial banks don’t support innovation financing
The public bank must be prepared to finance innovation, because: It is political priority for the country Resources must be available and financial instruments
should be appropriate It means an organizational cultural change Risk analysis should be improved Technical competence is essential
The public bank must be prepared!
BNDES ‘s role in promoting Innovation
Support to Innovation becomes one of BNDES highest priorities.
The BNDES’s role is to support investments in projects aiming to transform research into economic value. It’s a broader concept of innovation, not restricted to industry segments technologically sophisticated.
If so, where is the “I” of Innovation in “B.N.D.E.S
initials”?
The Innovation Dimension at BNDES
•Although the answer is not clearly stated in the monogram, it can be found in each letter that forms BNDES’s initials
BANK – Financing is required in order to transform ideas into value. Equity participation is the most proper financial tool to risky investments (usually without tangible guarantee)NATIONAL – Fully harmonized with the Federal Governmental Industrial Policy. Intends to avoid the “brain drain” from Brazil.ECONOMIC DEVELOPMENT – Global Competitiveness imposes to the country's economies constant changes in their technological basis in order to keep the path of growth and development SOCIAL - Innovation should not be restricted to large enterprises with respectable R&D departments. There is a huge number of SMEs and academic research centers full of innovative ideas which may be turned into successful entrepreneurships throughout Brazil, creating income and qualified jobs.
Innovation: Definition
“An innovation is the implementation of a new or significantly improved product (good or service), or
process, a new marketing method, or a new organisational method in business practices, workplace
organisation or external relations.”
(Oslo Manual - Version 3)
Revised definition of innovation, considering economic, organizational and marketing perspectives.
The objective is to better accommodate service industries and non-technological innovation
Innovation can cover:
Research; Science; Technology; Invention; Discovery
Innovation: Concept
It involves a series of scientific, technological, organizational, financial and commercial activities
• acquisition of technologyacquisition of technology
• industrial engineeringindustrial engineering
• industrial designindustrial design
• capital acquisitioncapital acquisition
• manufacturing start-upmanufacturing start-up
• marketing for new or improved productsmarketing for new or improved products
• patent work patent work
• financial and organizational changesfinancial and organizational changes
It is:
Uncomfortable Risky
It helps to:
Enhance economic growth Employment - create new and better jobs Reduce environmental impact Maintain firms’ sustainability
It requires:
Time Knowledge Drive STIMULATION!
Innovation: Characteristics
Observing the companies:Observing the companies:
Need to improve the firm Need to improve the firm innovative capabilitiesinnovative capabilities
Observing the companies:Observing the companies:
Need to improve the firm Need to improve the firm innovative capabilitiesinnovative capabilities
BNDES Experience: BNDES Experience: Discussions regarding the Discussions regarding the projects’ merit and projects’ merit and relevance of the innovationrelevance of the innovation
BNDES Experience: BNDES Experience: Discussions regarding the Discussions regarding the projects’ merit and projects’ merit and relevance of the innovationrelevance of the innovation
Inputs to Design BNDES IP Strategy
The goal is to contribute for the upswing of innovation activities in Brazil and the performance of such activities on a regular basis.
Data:Data:
Assess of the features Assess of the features of Brazilian innovative of Brazilian innovative firms – PINTEC firms – PINTEC StatisticsStatistics
Data:Data:
Assess of the features Assess of the features of Brazilian innovative of Brazilian innovative firms – PINTEC firms – PINTEC StatisticsStatistics
Governmental Goal 2008:Governmental Goal 2008:
Increase private R&D/GDPIncrease private R&D/GDP
from 0,51% (2005)from 0,51% (2005)
to 0,65% (2010) to 0,65% (2010)
Governmental Goal 2008:Governmental Goal 2008:
Increase private R&D/GDPIncrease private R&D/GDP
from 0,51% (2005)from 0,51% (2005)
to 0,65% (2010) to 0,65% (2010)
New Innovation Financing Policy of BNDES
NON-REIMBURSABLE FUNDS
EQUITY
LINES OF CREDIT
Closed-End Investment Funds and Equity
Direct operation
Seed Money
TECHNOLOGICAL INNOVATION
FOCUS ON STRATEGY
FOCUS ON PROJECT
INNOVATIVE CAPITAL
FUNTEC TECHNOLOGY FUND
support research, development and innovation projects in nationally relevant areas
PROSOFT, PROFARMA, PROTVD, PRO-Aeronautics and Engineering SPECIFIC SECTORS
CREDIT CARD Only for Micro, Small and Medium Enterprises
Among the products: Innovation Services, Certification and IP Applying Costs
Innovative Capital Facility – Focus on Firm’s Strategy
Long-term financing and/or subscription of securities
Support companies to develop capabilities to undertake innovative activities on a regular basis. This includes investments in tangible capitals, including physical
infrastructure, and intangible capitals.
Such investments must be consistent with the companies’ business strategies and be presented as per the Innovation
Investment Plan model.
Lines of Credit
Technology Innovation – Focus on Project
Long-term financing and/or equity participation
Support technology projects aiming at the development of new or significantly improved products and/or processes (at least for the
domestic market) involving technology risk and market opportunities.
Lines of Credit
Funds and Equity Participation
Follow-onFollow-onofferingsofferings
InitialInitialPublic OfferingPublic Offering
“Start-Ups”
Seeds
CapitalCapital
MarketsMarkets
Early stage
companies
Emerging
companies
Establis
hed
companies
Seed MoneySeed Money
Private EquityPrivate Equity
Venture CapitalVenture CapitalCRIATEC
15 New Funds
Governance Funds
Technological Fund – FUNTEC
Part of BNDES’ annual profit
Non-Reimbursable Fund
Beneficiaries:
Technology Institutes and Supporting Institutions
Strategic areas Health
Renewable Energy
Environment (control cars and plants emissions).
Support research, development and innovation projects in nationally relevant areas, allowing taking strategic opportunities for Brazil, enabling
it to take leading positions.
IP Negotiation : according with BNDES policies
Disbursements to innovation (2008)
FINAME
Lines of Credit 58
Specific Sectors Programs 215
FUNTEC 33
Investment Funds (2007) 85
Equity participation (2007) 150
Machines to SMEs 418
TOTAL 960
US$ MM
• Innovation In Brazil: some figures
Brazil: Highlights
INVESTMENTS IN R&D (%GDP)INVESTMENTS IN R&D (%GDP)
ISRAELISRAEL
SWEDENSWEDEN
FINLANDFINLAND
JAPANJAPAN
SOUTH KOREASOUTH KOREA
USAUSA
TAIWANTAIWAN
GERMANYGERMANY
SINGAPORESINGAPORE
FRANCEFRANCE
CANADACANADA
NETHERLANDSNETHERLANDS
UNITED KINGDOMUNITED KINGDOM
CHINACHINA
4,704,70
3,893,89
3,483,48
3,333,33
2,992,99
2,622,62
2,522,52
2,462,46
2,362,36
2,132,13
1,981,98
1,781,78
1,781,78
1,341,34
SPAINSPAIN
ITALYITALY
RUSSIANRUSSIAN
BRAZILBRAZIL
HUNGARYHUNGARY
SOUTH AFRICASOUTH AFRICA
INDIAINDIA
PORTUGALPORTUGAL
MALAYSIAMALAYSIA
CHILECHILE
TURKEYTURKEY
POLANDPOLAND
MEXICOMEXICO
ARGENTINAARGENTINA
1,121,12
1,101,10
1,071,07
1,021,02
0,940,94
0,860,86
0,850,85
0,800,80
0,690,69
0,680,68
0,670,67
0,570,57
0,500,50
0,460,46
Source: OCDE (2007), Ministry of Science and Technology (MCT,2007), World Bank (2006) and RICYT Source: OCDE (2007), Ministry of Science and Technology (MCT,2007), World Bank (2006) and RICYT (2006).(2006).
MASTER AND Ph.D. DEGREESMASTER AND Ph.D. DEGREES
19901990 19951995 20002000 20062006
STUDENTS GRADUATEDSTUDENTS GRADUATED
MASTERMASTER 5.5795.579 8.9828.982 18.14018.140 29.76129.761
Ph.D.Ph.D. 1.4101.410 2.4972.497 5.3445.344 9.3669.366
NUMBER OF COURSESNUMBER OF COURSES
MASTERMASTER 942942 1.2021.202 1.4901.490 1.9121.912
Ph.D.Ph.D. 445445 635635 821821 988988
Source: MCT (2008)Source: MCT (2008)
Brazil: Highlights
Source: Institute for Scientific InformationSource: Institute for Scientific Information
BRAZILIAN SCIENTIFIC PRODUCTIONBRAZILIAN SCIENTIFIC PRODUCTION
NUMBER OF NUMBER OF ARTICLESARTICLES % WORLD% WORLD
0
3.000
6.000
9.000
12.000
15.000
18.000
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
0,00
0,50
1,00
1,50
2,00
2,50
Brazil: Highlights
Brazil: Highlights in innovation
• Incubators in Brazil (2008)
– 383 incubators: • 339 active, 32 being implemented and 12 projects• 85% attached to universities (64% are public)
– 17 research support foundations
– 5,620 enterprises connected to incubators and responsible for generating 30,000 direct jobs
• The Evaluation of Intangibles Assets Project
BNDES and the Knowledge Era
Knowledge Economy vs Industrial SocietyKnowledge Economy vs Industrial Society
Credit Risk: higher emphasis in the futureCredit Risk: higher emphasis in the future
New Approach for Evaluating and Monitoring of Projects /New Approach for Evaluating and Monitoring of Projects /Enterprises / Economic GroupsEnterprises / Economic Groups
New factors to be observed: intangible assetsNew factors to be observed: intangible assets
Integrated ActionsIntegrated ActionsKnowledge ManagementKnowledge Management
Development of Core CompetencesDevelopment of Core CompetencesIT ToolsIT Tools
Challenges for BNDES’s operations:
● 27 ●
Evaluation System and New Metrics- Focus on Intangible Assets -
• Knowledge, Know-how• Governance• Innovation, R&D• Process• Patents and brands• Design• Reputation• Social and environmental accountability• Human Resources• Partnerships (technological, commercial, integration
with Research Institutes and Universities)• Marketing• Value added products• Export drive
STRATEGICSTRATEGIC
CAPITALCAPITAL
STRATEGICSTRATEGIC
CAPITALCAPITAL
INNOVATION AND INNOVATION AND PROCESS CAPITAL PROCESS CAPITAL INNOVATION AND INNOVATION AND
PROCESS CAPITAL PROCESS CAPITAL
RELATIONSHIPRELATIONSHIP
CAPITALCAPITAL
RELATIONSHIPRELATIONSHIP
CAPITALCAPITAL
CORPORATE CORPORATE GOVERNANCE GOVERNANCE
CAPITALCAPITAL
CORPORATE CORPORATE GOVERNANCE GOVERNANCE
CAPITALCAPITAL
INTELLECTUAL INTELLECTUAL CAPITAL CAPITAL
INTELLECTUAL INTELLECTUAL CAPITAL CAPITAL
FINANCIAL CAPITAL FINANCIAL CAPITAL FINANCIAL CAPITAL FINANCIAL CAPITAL
BNDES’ Methodology for Intangibles
● 30 ●
RATING FOR INTANGIBLE CAPITAL RATING FOR INTANGIBLE CAPITAL
IllustrativeIllustrative
RELATIONSHIP CAPITAL: CUSTOMER SATISFACTION
• Has a good transactional relationship with suppliers and clients
• Develop long term relationships with suppliers and clients, adapting products and processes to maximize value on the entire supply chain
• Develop long-term relationships with suppliers and partners...
• Establish partnerships with companies in unrelated business to capture synergies and growth opportunities
• Develop relationships...• Establish partnerships...• Cooperation and
alliances are at the core of the business model, leveraging competencies of each agent to optimize and maximize returns over the entire network
• Feedback and improvement
RELATIONSHIP CAPITAL: NETWORKS AND ALLIANCES
11 22 44 55
RELATIONSHIP CAPITAL: BARGAIN POWER
INTELECTUAL CAPITAL
INNOVATION CAPITAL
IC Rating:76
IC Rating:76
56 evaluate items
• Has weak relations with suppliers and clients
33
New National Cultural Heritage Treasuries :
Bossa Nova Music
Flamengo’s supporters
Minas Cheese
Innovation and Creativity in Brazil
The Brazilian Development Bankwww.bndes.gov.br
THANKS!