1. Brazilian Innovation Policy: Important Design Issues
Frederico Rocha

2. Design issues Targets Selection mechanisms Time duration
Policy instruments

3. Policy Evaluation Policy Instruments: Fiscal subsidies
Subsidized credit
Risk capital
Grants
Procurement
Conduct:
R&D activities
Other innovative efforts
Hiring of R&D personnel
Acquisition of technology
Performance goals:
New products and processes
Emergence of NTBFs
Collaboration with university
Creation of innovation networks
Long term goals:
Increase in labor productiviy,
Increase in the share of high tech activities
Growth of sales or exports

4. Labor Market – a Lewisian approach
𝑤 𝑝
Structural unemployment 𝐿

5. Structural heterogeneity
The persistence and coexistence of a high productivity and a low productivity sectors
Uneven diffusion of technical progress
Should an innovation policy be about picking winners or should it be about increasing diffusion?
How has Brazilian innovation policy targeted these objectives?
How can an innovation policy provide opportunities to a more even diffusion and distribution of technical progress?

6. Brazilian Innovation Policy
1990’s – creation of the sectoral funds – strenghening FNDCT (National Fund for Scientific and Technological Development)
2004 – Innovation Law
Enhancement of university-firm collaboration
Possibility of grant distribution to companies
2005 – Lei do Bem (fiscal subsidies legislation)
Source: Brazilian Innovation Survey

7. Innovation policy
Source: Brazilian Innovation Survey, 2011

8. Source: Brazilian Innovation Survey, 2011.

9. Impact on firm performance
* Not statiscally significant.

10. Aggregate performance indicators
Source: Brazilian Innovation Survey
Source: Brazilian Innovation Survey

11. Summing-up Stable share of innovating firms
Concentration of R&D efforts in fewer firms
R&D expenditures did not fulfill targets
Reasons to believe that policy did not contribute for reduction of structural heterogeneity, that is, did not induce a more even distribution of technical progress
Measure the effects
Compare instruments
Undestand targeting strategies

12. Thank you