The Regional Dimension of the Brazilian Innovation System

Marcos Costa LimaJonatas Ferreira

Ana Cristina Fernandes

Brazil is marked with profound social disparities, superposed by regional unevenness in terms of development

standards. Therefore, it’s a fragile country in a world dominated by Transnational

Corporations, which profit on these inequalities.

CELSOFURTADO

in : Em Busca de Novo Modelo. Reflexões sobre a Crise Contemporânea. Paz e Terra, 2002

Summary

1. Analytical Background

2. A Brief Contextualization of Brazilian Regional and Economic Issues

3. Innovation Spatialization in Brazil

4. Conclusions

Analytical Background

Theoretically, we take into account:

1.The National Innovation System (Freeman)

2. The Learning Economy (Lundvall)

3. The Finance-driven Accumulation Regime (Chesnais)

4. The Regional Innovation System (Storper)

5. Agglomeration Economies (Sabóia); (Lemos)

6. Local Productive Arrangements –APL’s (Cassiolato; Lastres)

With regard to the relation between the dynamics of regional space and the location and agglomeration of firms in

productive and innovative systems, we understand that:

History matters and is decisive: it restates the complexity of interactions between society and space;

Geographic proximity matters and facilitates interactions and communication among agents: firms;

government and people;

Geographic proximity also stimulates new learning and improves the possibility of coordinate actions

Besides firms, the presence of such institutions as universities, research centers, laboratories and of

qualified human capital foment sustainable development and proactive synergies;

Regional development happens if it is related to competitiveness in places where institutional capacities,

infrastructure, knowledge and skills exist;

The presence of the State is decisive;

One thing is a region in a rich country and quite another is a region in a peripheral one

A Brief Contextualization of Brazilian Regional and Economic

Issues

Regional Asymmetries

Economic Density according to GDP per capita Brazilian Regions

•

Today, from 68 urban agglomerations of intense and recent industrial dynamics, 79% are located in the South and Southeast regions, but only 15% in the Northeast and 6% in the North and Center-West.

Regional Disparities Data

Industrial centralization persists in the country

The dispersion movement of industry, which had favored the less developed regions in the eighties, stopped.

HEALTH and LIFE:

Life expectancy of Brazilians grew (1993-2003) in average 3,6 years, being higher among women;

Sanitation exists in average for only 16,3% of the poorest 40% in Brazil

But in the Southeast it exists for 71,5% of the poorest 40% .

Instruction degree

Very low for a country that intends to get into the knowledge society.

National average of functional illiteracy for people at age 15 or older is 20,7%

In the South this indicator is 16,4%; in Southeast, 16,9% and in the Northeast 30,6%

National Average of people with less than a year of instruction or no instruction at all is 15.9%.

In the Northeast it is 29,9%.

Indicators N NE S SE CW

Life Expectancy 69.3 66.7 71.7 70.1 70.1

Functional Illiteracy

23.8 30.6 16.4 16.9 20.2

People at age 25 or older with less than a year or no instruction

15.9 29.9 9.6 10.5 14.4

TABLE

SOCIAL INDICATORS PER REGION

Source: IBGE/PNAD 2006 for population – IBGE 2005 for other indicators

Labor and Income

Population

Total

BR N NE SE S CW

100 4.63 27.03 43.8 16.5 7.13

Up to1/2 MW 10 10 20.4 5.7 5.7 6

from ½ to 1 MW

17,8 24.2 25.7 14.2 12 18.3

More than 5 MW

10,3 7.6 4.1 13.7 11.4 12.6

TABLE

ECONOMICALLY ACTIVE POPULATION PER INCOME CLASS (%)

Source: IBGE 2005

BR N NE SE S CW

Agricultural 20.7 9.7 37.2 10.4 23.9 17.8

Industrial 14.4 13.8 9.2 17.1 17.6 11.0

Building 6.5 8.4 5.1 7.2 6.2 7.2

Commerce 17.7 22.6 16.2 18.5 16.4 18.9

Services 33.6 40.2 28.2 37.3 29.3 37.7

Others activities

6.9 6.9 3.7 9.3 6.3 7.3

TABLE

OCCUPIED POPULATION PER SECTOR

Source: IBGE 2005

Ownership of Durable Goods

Table

URBAN PRIVATE HOMES WITH DURABLE GOODS (%)

BR N NE SE S CW

TV Color set 90.3 84.6 82.1 94.1 92.1 89.7

Refrigerator 91.7 83.9 79.4 96.5 96.0 92.1

Wash Mach 38.4 23.21 13.3 47.9 52.6 31.5

PC 17.5 7.7 8.4 22.0 20.9 15.7

PC Internet 13.2 5.1 6.0 16.8 15.6 12.4

Fixed Telephone

57.8 37.4 37.4 66.6 67.1 59.1

Source: IBGE 2005

Source BITOUN, 2005

Industry Indicators - Disparities among Regions

INDUSTRIAL EMPLOYMENT dropped 27.1% between 1989 and 1998, and the greatest loss occurred in the

Southeast (35.3%).

DECENTRALIZATION favors mainly the Northeast and the South

Region 1996 - 2004

South 18% - 21%

Northeast 7.4% - 10.1%

Center-West 1.1% - 3.3%

However, the South plus the Southeast still represented 81.6% of industrial employment in 2004.

The participation of technical and scientific professionals in industry is quite low in Brazil.

Participation of Technical and Scientific Professionals

In 1999 only 5.4% of workers were in this group.

The situation per region is a bit more favorable to the Southeast (6.6%) and gets worse in the Center-West

(3.0%).

REGIONAL INNOVATION

Resources in S&T (1991-2000) underwent great flotation of federal expenditures, even considering the

increment obtained through the incorporation of Sectorial Funds, starting from 1999 (MCT).

Brazilian Spending in S&T:

Federal Government 46.6%

State Governments 17.0%

Private Sector 36.4%

INNOVATION RATE

Source: IBGE: Pesquisa Industrial – Inovação tecnológica, 2005.

In the Brazilian case the rate is 33.3%.

Sweden, Austria, Canada, Denmark, Holland and Germany present innovation rates superior to 60%.

In Brazil, process innovation rates in industry were of 27%, superior to product innovation rates ( 20.7%)

PROCESS INNOVATIONS happen above all by the incorporation of machinery and equipments already

existent in the internal market, representing a modernization process of the productive industrial plant.

From a total of 84,262 industries that occupied more than 10 people, 28,036 indicated they had done some

innovation.

More than 50% of expenditures in innovation referred to machines and equipments. In the European Union, a little beyond 20% of expenditures were in this item.

R&D expenditures in the European Union oscillate between 30 and 60% of the total. In Brazil they don’t get

to 20%.

Brazilian industry is concentrated by the hegemonic force of the state of São Paulo and its surroundings.

There are sub-national centers which effectively attract industrial investment to areas under their geographical influence. São Paulo and these sub-national attraction areas are dynamic industrial centers in the Brazilian

territory.

(BORGES LEMOS, 2005).

INDUSTRIAL CONCENTRATION MAP

MAP- PRESENCE OF INNOVATIVE FIRMS

Technology Learning Capability(3)

Regions IES

Professors

StudentsTotal Masters Doctors

N 4.4 4.2 4.1 2.0 4.7

NE 15.2 15.5 16.1 11.7 15.2

SE 53.3 51.7 49.5 62.9 51.7

S 15.5 20.6 22.6 18.0 19.8

CW 11.6 8.0 7.7 5.4 8.6

Absolute Total

1.391 219.947 72.978 46.133 3.030.754

TABLE

UNIVERSITY STUDIES PER REGION (2001) (%)

Source: MEC / INEP / DAES – CAMPOLINA DINIZ and GONÇALVES, 2005

TABLE

POSGRADUATE STUDENTS ENROLLED IN THE TECHNOLOGIC AREA (MASTER’S AND DOCTORATE) (2001) (%)

REGIONS Exact and

Earth Sciences

Computer Science

Bilogical Sciences

Engineering

Agricultural

Sciences

Total

N 2.2 - 3.8 0.5 1.7 1.6

NE 12.6 12.0 6.7 6.5 8.0 8.3

SE 68.5 52.4 71.2 70.4 69.8 69.0

S 12.6 33.8 13.7 20.5 18.1 18.1

CW 4.0 1.8 4.5 2.1 2.4 3.0

Total (absolute)

7.232 2.358 7.300 14.188 7.774 38.852

Fonte: CAPES – CAMPOLINA DINIS e GONÇALVES, 2005

Conclusions

The second conclusion is that in the state of São Paulo, its industrial tissue, the presence of a great number of

multinational companies and Brazilian industrial leaders, the economic density and the existing net of

academic formation disseminated through all its territory, establish a different level in the context of the

national innovation system.

The third conclusion is that there is little or almost no convergence of other Brazilian states toward

consolidating a more articulated and integrated regional system than the one existing in São Paulo.

The first conclusion is that Brazil, in general, still has a very low performance in terms of innovation.

The fourth conclusion is that although a new location of industry is happening in the country, the effects and

advances in terms of technological innovation are still tenuous.

The fifth conclusion is that the analyzed socio-economic data reveal that the disparities which were found and which have enlarged mainly in the educational sector

since the nineties, prevent the Northeast, the North and the Center-West regions from moving toward a

knowledge society.