Research with multinationals, coordinated
by the Institute of Geosciences, will prospect more investments in R&D

Brazil prepares
to the innovation game

LUIZ SUGIMOTO

En August 1st, at the Department of Scientific and Technological Policy (DPCT) of the Institute of Geosciences (IG) at Unicamp, we began to detail the methodology for extensive research into multinationals in Brazil, with the aim of prospecting investment opportunities by these companies in research and development in the country. “There is an international movement to fight for investments in R&D and we need to better prepare ourselves for the game.”, says DPCT professor Sérgio Queiroz, coordinator of the project that is part of Fapesp’s “Public Policies” notice.

Prospecting starts in six months

The prospecting will begin in six months, when the team will be assembled, which will include researchers from the Industrial Economics Study Group (Geein) at the Faculty of Economics at Unesp-Araraquara. The external partner will be the Department of Science and Technology of the State of São Paulo, interested in identifying, intermediating and creating mechanisms to attract investments in technological activities to the territory of São Paulo. “We have not yet defined the number of companies to be researched, but we will certainly pay attention to the automotive, telecommunications, microelectronics and IT sectors, which have already been showing important investments in R&D in the country”, informs the Unicamp professor.

In an article entitled “Innovation in Brazilian multinationals”, for issue no. 262 of Jornal da Unicamp, Sérgio Queiroz describes the context in which these companies appear more likely to invest in technological activities outside their countries of origin. “There is extensive literature on this internationalization – the assembly of global R&D networks –, which some authors prefer to call 'triadization', since the decentralization movement would be limited to the territories of the United States, Europe and Japan. But countries outside the triad are beginning to attract investments, especially China and India, and it is up to Brazil to ensure itself as a center of attraction in South America”, observes the researcher in the interview.

Data cited by Queiroz on the 359 largest companies in the world, in the period 1990-94, indicate that less than 1% of patents registered in the United States originated from subsidiaries outside the triad. In recent years, however, spending by American subsidiaries on R&D outside Canada, Europe and Japan, for example, has grown from 10,7% in 1998 to 15% in 1999 and 17,8% in 2000. China, alone, it received 2,6% of investments from American subsidiaries. “China, in particular, is extremely aggressive in this regard. Instead of receiving investments only in manufacturing, it requires the setting up of centers of excellence so that its engineers can also carry out development. It is the world's largest recipient of foreign investment among third world countries, competing at the top with rich countries,” he highlights.

India, in turn, received more than 70 R&D units from multinationals in the last five years, outnumbering centers such as Japan, Israel, Eastern Europe and even China. It is correct that many of these centers are focused on simple development tasks, but others are sophisticated centers, such as that of General Electric, which employs more than a thousand specialized technicians, 31% of whom have PhDs and 44% have master's degrees. India trains 200 engineers each year, with salaries equivalent to a fraction of what is paid to an American engineer. Furthermore, the Indian workforce speaks English, which facilitates integration with global R&D networks. “When India attracted investment in manufacturing, it was fine. But when qualified jobs start to be stolen in the United States, the problem becomes a real problem”, says Sérgio Queiroz.

High bet – According to the research coordinator, although Brazil has not attracted the same attention as China and India, multinationals have been a very important actor in the national innovation system, accumulating a significant set of technological skills. As in the recently published article, Queiroz insists on the example of the automobile sector. “Automakers have already overcome the phase of 'tropicalization' of vehicles, in which they only adapted designs coming from headquarters to local conditions, creating, for example, sedan and pick-up versions. This is the case of Meriva, from GM, whose project was born and coordinated in Brazil, and was later adapted to European conditions by the German Opel. Brazilian Volks took a similar step when designing the Fox for export to Europe,” he illustrates.

Sérgio Queiroz remembers that we have an infrastructure equal to or superior to that of competing countries, with emphasis on research centers and qualified labor. “The objective of the research being prepared at DPCT is to paint the picture and propose paths. Foreign companies interested in expanding their manufacturing and service activities in the country are welcome, but they should also be encouraged to establish R&D units. Among several internal factors, such as economic ones, some conditions for attracting investments in technology are related to public policies. The fact is that competition is getting tougher and Brazil needs to bet big”, he concludes.

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