INNOVATION IN THE CONTEXT OF INDUSTRIAL POLICIES IN BRAZIL July - - PowerPoint PPT Presentation

INNOVATION IN THE CONTEXT OF INDUSTRIAL POLICIES IN BRAZIL

July 2009

Rafael Oliva Advisor to the President

Innovation in Brazil, India and South Africa: A New Drive for Economic Growth and Development

Presentation Agenda

• 1. Public Policies for Innovation in Brazil
• 2. The BNDES
• 3. The BNDES’ Support for Innovation: instruments

Pres esenta entati tion A

• n Agenda

da

• 1. Public Policies for Innovation in Brazil
• 2. The BNDES
• 3. The BNDES’ Support for Innovation:

instruments

State Policies

Econom ic Policy

Education Developm ent Plan PDE Health Developm ent Plan Agricultural Developm ent Plan

Production Developm ent Policy PDP

Action Plan for S,T&I Pla Plan f for Growth th Accel Accelerati tion PA PAC

4

1.Expa pansion and d Co Consolida dation

• n of Nationa

nal S,T& T&I System

Qualify and train human resources; R&D laboratory infrastructure

Strategic Priorities

The Action Plan for S,T&I (PACTI/MCT)

• 4. Prom
• motion of
• f Techno

hnological Inno nnovation in in Ent nterprises 3.

• 3. R

R,D&I i in S Str trate tegic c Areas eas:

biotechnology, health, nanotechnology, information and communication technology, space, nuclear energy, defense, renewable energy, biofuels, agriculture, biodiversity etc.

• 2. S

S,T& T&I f for S Social De Developm

• pment

PRIVATE R&D/GDP 2010 target: 0.65%)

1.5 % GDP in R,D&I

Major Goal 2010

Production Development Policy

SMEs 2010 target: Increase the number of export SME by 10% Brazilian Exports (% World) 2010 target: 1.25% 2007: 1.18% CAGR 2008-2010: 9.1% INVESTMENT/GDP 2010 target: 21% 2007: 17.6% CAGR 2008-2010: 11,3% PRIVATE R&D/GDP 2010 target: 0.65%) 2005: 0.51% CAGR 2007-2010: 9.8%

3.39 3.22 2.68 2.53 2.08 1.89 1.42 1.12 1.11 0.78 0.68 0.51 0.46 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Japan (2006) Korea (2006) USA Germany France Canada China (2006) Russia Brazil (2008) India (2003) Chile (2004) Argentina Mexico (2005)

National Expenditure in R&D (%GDP)

40 48 47 53 52 38 68 28 68 24 75 23 77 16

10 20 30 40 50 60 70 80 90 100 Italy (2006) Brazil (2007) France (2006) Germany (2006) Finland (2007) Korea (2006) Japan (2006)

Enterprises Government

Private a te and governm nmental ntal i investm tment i ent in R&D ( (%) in Br n Braz azil

79.2 76.6 68.3 60.9 53.2 51.2 32.4 26.3 11.8 3.4 7.1 4.8 14.8 12.4 33.3 18.4 6.6 41.7 13.3 15.2 25.6 24.3 32.7 15.2 49.0 65.9 44.6

0 .0 1 0 .0 2 0 .0 3 0 .0 4 0 .0 5 0 .0 6 0 .0 7 0 .0 8 0 .0 9 0 .0 USA Korea Japan Germ any France Russia Spain Brazil ( 1 ) Argentina

Business sector Governm ent University

% researchers

Percentage of full-tim e researchers per institutional sector 2 0 0 5

Most Brazilian researchers work at universities...

Challenges

 Improve the capacity for coordination  Accelerate uptake of technologies with great impact on

the whole productive structure

 ICTs, capital goods, biotechnology, nanotechnology

 Mobilize the private sector

 Provide resources for investment in volume, costs and

terms consistent with the different stages of innovation process

 Improve the existing instruments to characteristics of the knowledge

society: the intangible capital agenda

Main advances

 S,T&I: a matter of the State  New regulation for innovation  Increased federal funds for S,T&I  Improvement and expansion of existing S,T&I

programs and creation of new ones

Presentation Agenda

• 1. Public Policy for Innovation in Brazil
• 2. The BNDES
• 3. The BNDES’ support for Innovation: instruments

Private Infrastructure and Exports Privatization: Management of PND Social and Urban Development

1 9 5 0 1 9 6 0 1 9 7 0 1 9 8 0 1 9 9 0

To Today Innovation - Infrastructure – Production Capacity Exports – Social Inclusion Infrastructure (Energy and Transport) Steel Work Heavy Industry – Consumer Goods - PYMES Substitution of Imports Basic Inputs – Capital Goods Energy Agribusiness Competitive Integration

Priorities

The BNDES and Multilateral Agencies

(* ) In the World Bank, different to the others, the 12-month fiscal year ends on June 30.

Development Banks

Bank Assets US$ billion Net Equity US$ billion Disbursements US$ billion World Bank 233.6 41.5 10.5 BNDES 118.6 10.8 49.8 IDB 72.5 19.4 7.1 CAF 14.3 4.6 5.8

Source: BNDES (Dec./08), World Bank (Jun/08), IDB and CAF (Dec./08).

Evolution of Disbursements

Default 2008: 0.15 (%)

2 3 .4 1 2 .6 2 5 .6 1 0 .9 3 7 .4 1 2 .8 3 5 .1 1 1 .7 4 0 .1 1 3 .7 4 7 .1 1 9 .6 5 2 .3 2 4 .1 6 4 .9 3 4 .0 9 2 .2 4 9 .8

2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

R$ billion US$ billion

Presentation Agenda

• 1. Public Policy for Innovation in Brazil
• 2. The BNDES
• 3. The BNDES’ Support for Innovation: instruments

The BNDES’ Innovation Policy 1. Efforts in all economic sectors 2. Complementary to other institutions within the National Innovation System 3. By means of integration between financing and capitalization instruments Directives Goal: to contribute to the increase of innovative activities in Brazil on a systematic basis Target: R$ 6 billion in disbursements between 2008-2010

The BNDES’ Innovation Policy

NONREIMBURSABLE RESOURCES

EQUITY LINES

• Direct Participation
• Funds
• Criatec Program (Seed Money)

INNOVATION TECHNOLOGY FOCUS ON STRATEGY FOCUS ON PROJECTS INNOVATIVE CAPITAL FUNTEC Technology Fund Projects in Research, Development and Innovation BNDES CARD

• For micro, small and medium-sized companies

Certification, conformity assessment, technology services, IP, software, etc

• Include topic in

business agendas and public policy

• Better

assessment and avoid p id poor r allo locatio ion o

• f

resour

• urces
• Stimulate

companies to constr truct / ct / improve e Intangible Capital

• Stimulate

companies to re report Intangible Capital

• Devel

elop g gau auges and scorecards to evaluate credit

IC IC Rat ating IC R C Repo port Awar arenes ess

IC A C AGEND NDA A AT T THE THE BNDE NDES: 3 3 STE TEPS Looking Ahead: Intangible Capitals Agenda

Tes est w t with th 40 40 compan anies es Gauges es in final al validati tion phase

20

Final Remarks

• PROMOTING INNOVATION IS A PRIORITY OF PUBLIC

POLICIES IN BRAZIL

• DIFFERENT GOVERNMENT AGENCIES HAVE BEEN

ENGAGED IN THE EFFORT TO BUILD

• BNDES HAS WORKED TO PROVIDE A WIDE RANGE OF

FINANCIAL INSTRUMENTS

• Financing and capitalization
• Support for companies of all sizes and of all sectors
• THE NEXT STEPS
• Financing side: the intangible capitals agenda
• ACCELERATE THE CONSOLIDATION OF THE CULTURE

OF INNOVATION

Innovation in Brazil, India and South Africa: A New Drive for Economic Growth and Development

INNOVATION IN THE CONTEXT OF INDUSTRIAL POLICIES IN BRAZIL

July 2009

Rafael Oliva Advisor to the President

Lines, FUNTEC and Card

Innovative Capital

• Goal: support for innovative efforts aligned with strategies and

foreseen in the companies’ Innovation Investment Plans

• Eligible Items: physical infrastructure + tangible and intangible assets
• Financing and/or capitalization
• Minimum Amount : R$ 1 million
• Cost: 4.5% a.a. (valid until Dec./2009)
• Participation: up to 100%
• Term of Loan: up to 12 years

Innovation Strategy Innovation Investment Plan (PII)

Company

• Goal: support research, development and innovation projects with

technological risk and market opportunity: products and/or new processes (for the national market) or those that are significantly improved

• Financing and/or capitalization
• Minimum Amount: R$ 1 million
• Cost: 3.5% a.a (valid until Dec./2009)
• Participation: up to 100%
• Term of Loan: up to 14 years

Technological Risk Market Opportunity Originality for National Market

Project

Technological Innovation

FUNTEC

Direct Investment and in lost funds  Scientific and technological projects  Of strategic interest to Brazil  Beneficiaries :

• Technological institutes and support institutes
• Conditions: company intervention

 The BNDES’ Level of Participation: up to 90%  Projects are assessed by CCTEC

Conditions:

 Beneficiaries: micro, small and medium-sized companies  Limit: up to R$ 500,00, per bank (BB, CEF, Bradesco)  Fixed repayments in up to 48 months  Interest rate: 1.00 % a.m.

BNDES Card Innovation

Eligible Items:

 Technological extension  Technicians specialized in energy

efficiency and environmental impact

 Prototype Development  Design, Ergonomics and Model of the

Product

 Quality assessment and implementation

• f the product and software process

 Develop packaging  Acquisition and transfer of technology

(registered contracts at the INPI)

 Feasibility assessment and request

registration of intellectual property

Capitals Market

Direct Participation: Innovative PYMES

Since 1988, when support for the PYMES began via risk capital, the BNDES offered support to 99 companies, with direct disbursements of R$ 1.3 billion.

R$ million

2005 2006 2007 2008 Investments (ctd) 6 8 16 17 Amount 66.8 98.1 367.3 377.2 Average Amount 11.1 12.3 23.0 22.1

Seed Capital CR CRIA IATEC Private Equity

Govern rnment Fund Funds

Secondary Offers Capit itals ls Mar arket et Seed Venture Capital

15 Fund Funds

Start-Up Companies Early Stages Emerging Companie s Mature

Companie s

Companies’ life cycles and support instruments

Initial Public Offer

BNDESPAR – Participation in Funds

BNDESPAR participated in structuring 42 investment funds, totaling R$ 1.4 billion and supporting 149 companies (105 VC and 44 PE) - March/2009

Others 0.3% Services 23.8% IT 39.0% Manufactures 24.6% Environment 7.7% Agribusiness 3.0% Biotechnology 1.7%

VC Fund: R$ 548 million invested Sectorial distribution per approved amount

Goals: to capitalize innovative micro and small companies with seed capital and offer them adequate management support

31

CRIATEC

• Investment period begins: January 2008
• Companies receiving investment: 18
• Biotechnology, Agribusiness, IT and Medical equipment
• Allocated equity: R$ 100 million
• Participation: BNDESPAR (80%) and BNB (20%)