Economist Flávia Filippin found in a master's study at Unicamp that an intermediate and stable federal government bureaucracy had the role of encouraging and demanding specific policies for the development of the semiconductor industry in Brazil. For the Unicamp researcher, the case may be representative of how an industrial policy is made, in practice, in the country: largely due to the initiative of bureaucrats from bodies linked to economic development who carry out the work of convincing higher authorities, an activity accompanied through a process of learning and critical analysis of results.
“It was the government bureaucracy that formed a 'critical mass' in the case of the semiconductor industry. They were public agents linked to various federal government bodies who carried the sector's flag and defended its interests, when the sector did not yet exist. And if this gave results for the semiconductor industry, it may be that leveraging the development of the entire Brazilian industry involves reinforcing the role of this bureaucracy within Brazilian institutions”, suggests the author of the study, conducted together with the Institute of Economics (IE) from Unicamp.
In her research, Flávia Filippin mapped out, describing and analyzing the sector in the country, as well as the public policies implemented by the Brazilian government in this area. According to the author of the study, the semiconductor industry is one of the most dynamic and relevant sectors of the global economy. In Brazil, the economist reports that the government has been encouraging the revival of the sector since the beginning of the 2000s through various policies. As a result, Flávia Filippin reveals the existence of more than 40 embryonic institutions, operating at all stages of the value chain and in different segments of semiconductor components.
“The main results of the research are, on the one hand, the construction of a narrative about the formulation of incentive policy for the semiconductor industry and, on the other, the mapping of the sector. The construction of the narrative supports the analysis of the facts, allowing understanding of the evolution of policy and the role played by bureaucracy. Regarding mapping, the work provides a reasonably accurate snapshot of the sector today. This allows other research to take mine as a starting point”, he explains.
The study was supervised by professor André Martins Biancarelli, who works at the IE's Center for Economic Policy and Conjuncture Studies (Cecon). There was co-supervision from professors Jacobus Willibrordus Swart, from the Faculty of Electrical and Computer Engineering (FEEC); and Marcos José Barbieri Ferreira, from the Faculty of Applied Sciences (FCA), Limeira campus (SP). CNPq (National Council for Scientific and Technological Development) and Capes (Coordination for the Improvement of Higher Education Personnel) financed the research.
Currently, Flávia Filippin is studying for her doctoral thesis, researching the semiconductor industry on a global scale. She is enrolled as a PhD Fellow at The United Nations University Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), an institute linked to the UN (United Nations) and Maastricht University, in the Netherlands. “I am currently working on the hypothesis of studying the topic of technological leadership and Europe's position in the global value chain of this industry”, she explains.
The role of bureaucracy
The author of the research states that from the 2000s onwards, the Brazilian government began to build a new incentive policy for the sector after the controversial market reserve established in the 1980s. Among the instruments created by the recent policy, the most relevant, according to Flávia Filippin, it's called PADIS (Semiconductor Industry Technological Development Support Program).
The program, according to the economist, is the most aggressive tax incentive in Brazil for an industrial sector, despite not being as aggressive as the tax incentives offered in other countries for this same industry. The author of the study highlights “the crucial role” in the formulation and approval of this incentive by bureaucracy, specifically the semiconductor industry working group, formed, at the time, by agents from the Ministries of Science, Technology and Innovation (MCTI); of Development, Industry and Foreign Trade (MDIC) and the National Bank for Economic and Social Development (BNDES).
“The bureaucracy then began working on formulating this incentive. This occurred mainly in the working group on the sector. And the bureaucracy not only formulated the incentive and discussed its proposal with various government bodies, but also convinced ministers from the departments involved and the presidency of the republic to support the initiative and articulated its approval in Congress. The approval of PADIS in 2007 was a very important step in the construction of the sector's incentive policy because it was a manifestation of the government's commitment at that time.”
Flávia Filippin assesses that there are problems in the incentive policy for the semiconductor industry in Brazil, such as, for example, the need to update PADIS to cover more business models. The economist considers, however, that the problems have been identified by policy makers and there is an effort to resolve them.
“It is possible to clearly see that the agents involved work towards the continuous improvement of policy instruments. This is all part of a learning process, in which, on the one hand, public agents consciously seek to learn more about the dynamics of the semiconductor industry and, on the other, they also learn from mistakes and successes. However, there is one flaw that worries me: the low priority of the semiconductor industry at Palácio do Planalto in recent years. And this is difficult to solve”, he criticizes.
Despite the incentives, the study author agrees that the national semiconductor industry is not on an equal footing to compete with cutting-edge international companies. “And I don’t think that will happen in the near future. Perhaps in some specific niches, such as photonics and microfluidics, some Brazilian companies will be able to compete. But this does not mean that this sector cannot bring great positive effects to national development”, she assesses.
For the author of the study, even if the country remains “behind” in relation to world leaders, developing a technologically advanced sector like this is “essential”. “Even though it does not compete with cutting-edge companies, the Brazilian semiconductor industry can contribute greatly to the productivity of other sectors of the national economy and can increase the country's innovative potential. Microelectronics is a general purpose technology and it is essential to master it, even at a disadvantage with advanced countries.”
Publication
Dissertation: “State and Development: the semiconductor industry in Brazil”
Author: Flavia Filippin
Advisor: André Martins Biancarelli
Co-advisors: Jacobus Willibrordus Swart and Marcos José Barbieri Ferreira
Unity: Institute of Economics (IE)
Financing: CNPq and Capes
