A New Plan The concentration of innovation financing in the hands of the government has significant implications with regard to the investment dynamic and the capacity to generate investments over the long term. This is due to the fact that, despite advancements in the regulatory systems of these countries, restrictions on the participation of the private sector remain in place. It has been difficult to adapt public financing to the internal research activities of the private sector, especially in the case of small and medium-sized enterprises (SMEs). Taking into account only those firms that developed a product or process innovation in Brazil between 2000 and 2003, only 16.5 percent of Brazil’s 30,000 innovation-focused companies attributed significant importance to internal research activities (IBGE, 2003). Wherever innovative efforts are being made, Latin American firms tend to opt for modernizing machinery and equipment that already exist on the market. Process innovations tend to be superior to product innovations as they are generated by their own providers. The reduced interaction between scientific knowledge as embodied in
universities and research institutes, the industrial application of this knowledge and the meager efforts undertaken by industrial firms in conducting internal research activities reinforces vicious cycles where no improvements of any kind take place. The low level of corporate research and the reduced importance given to this activity and to the processes for incorporating new technologies, along with the risks associated with innovative activities, tend to discourage investments in innovation and increase the distancing of public institutions, as reflected in the growing difficulties in accessing public financing. The interaction between industry and academic institutions is much lower than it should be. Researchers must generally divide their time between routine class activities and administrative tasks, leaving them little time for research and even less time for searching out or partnering or interacting with businesses. In fact, few firms maintain frequent contact with universities and research institutes. Among the few that cultivate a reasonable level of interaction, there are frequent complaints that the pace at which the university moves lags behind (Continued on page 188)
186
Chapter VII
|
SCIENCE AND TECHNOLOGY: A WISE INVESTMENT