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Opinion

Petrobras: virtual prospecting in deep waters

The Brazilian entrepreneur needs to develop a mindset that is truly global and innovative in order to compete abroad And r é R i b e i r o Co u t i nh o

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nnovation has certainly entered the strategic agenda of Brazilian companies since 2005, at least as a talking point by business leaders and government. However, it is obvious that most Brazilian multinationals still have difficulties in putting the “engine” of innovation at the center of their international expansion strategies. Innovation as a globalization tool has not managed to become a central issue in the discussion on Brazil´s economic development which has been bogged down in the confrontation between economists, politicians and business leaders who favor state-driven development and their “neoliberal” opponents. These two sides have been involved in a debate for many years that has been more ideological than pragmatic.     However, there is no shortage of examples of great progress being made in this area at world level, even among countries neighboring Brazil. In their book “Plowing the Sea”, Fairbanks and Lindsay (*) describe how some developing countries were forced to adjust their mindsets— or even better, the deeprooted mentality, framework and values of their leaders — in order to advance in terms of development. Latin America countries had to undergo a value shock in the effort to free themselves from the shackles of the past. One well-known example is Colombia which has become the world´s number one coffee exporter and made the Juan Valdez brand a

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model of how to go international, thanks to a coordinated effort by members of the national coffee planters’ federation. The Colombian business leaders moved forward by breaking the conventional view of Colombia as a commodity-exporting country and creating a brand that has become known abroad

and bring the gains that had previously been obtained by international distributors and sales points in other countries back to Colombia. On the other hand, investment in innovation has been a crucial motor in the move towards going international. The multinational 3M group is a benchmark in this sense

and invested US$ 1.8 billion (6% of its global revenues) in innovation. Of this amount, US$ 100 million was invested in the acquisition of startup companies. This approach has allowed the group to enter budding technologies and gain future markets. Companies like John Deere and P&G are creating open innovation platforms, connecting universities and research centers, entrepreneurs and even retired people around the world. These companies regard every country as a key part in the global R&D puzzle and new business challenge. In Brazil, we still need to work

hard to change our mindset. When we look at Brazilian companies´ strategic foreign direct investment plans in recent years or study the objectives of innovation and going international, it is common to see a mixture of doubt, lack of knowledge and even prejudice among the shareholders, business leaders and executives when the subject concerns moving business outside the country through innovation. The reasons for this attitude can be found in some features of Brazilian corporate culture and the country´s history, presented as follows:

abroad but I don´t have information or the conditions to study and enter new markets”. With the exception of a few companies — such as Natura, which has just opened a research center in New York to capture insights and trends on new products with artists, designers and architects, or Embraer, which has been carrying out research directed at the international market for more than 20 years — Brazilian multinationals´ R&D centers usually operate with a domestic mindset. Adjusting this mental framework would mean global Brazilian business leaders would have to take aims, targets and processes (such as R&D) directed at the international markets into account in their strategic plans. :: Brazilian cultural flexibility – One of Brazil´s cultural features is that it is receptive to trends and technologies. Writers Chu and Wood (**) say this flexibility results from the liking for miscegenation and the new and exotic that marked the colonization of Brazil. The flexibility is seen through the easy assimilation of foreign practices and customs and highlights the willingness to favor models and concepts developed in other countries at the expense of those created locally. The adoption of foreign concepts and benchmarks in Brazil has been made in an uncritical way, historically and traditionally. This highlights the country´s high level of openness to foreign influences. In the real world of business, Brazil remains a receptor of trends and technologies

Brazilian companies usually only think of innovation in domestic terms :: The seduction of the domestic market – The bent towards domestic questions and the size of Brazil´s market lead the different players (companies, government and other institutions) to give priority to meeting domestic demand. Some incentives are provided for exporting but little real encouragement is given to going international. This happens with Brazil´s multinationals themselves. Surveys and decisions on innovation are made by looking at the Brazilian market and then thinking of adapting products and services to other countries in a second stage. Some typical mindsets are “I want to grow as long as it is in my own country” or “I would even like to go HANDOUT

Taking a global view

* Published by Qualitymark.  ** Brazilian cultural organization in post-globalization: global or local? – Revista de Administração Pública

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PIB ed25 english  

PIB Edition 25 March/April 2014