Farming might seem a strange inclusion in a chapter on business innovation, but Brazil’s agribusiness contributes almost a third of GNP and much of it is built on science and technology. With agricultural exports of around US$30 billion in 2004, Brazil is the largest producer of oranges and coffee in the world, holds the biggest stocks of beef and chicken, and produces over 20 per cent of soy beans. Yet it still has the largest remaining stocks of cultivable land in the world. When Michael Shearn of the US Foreign Agricultural Service visited Brazil in 2003 he reported that "the future of farming in Brazil has enormous potential, and… previous estimates of the scope for possible agricultural expansion have been grossly underestimated".

Petrobras has been listed on the Dow Jones Sustainability Index since

2006, and in 2008 one international index ranked it as the most sustainable oil company in the world. The natural assets of the Amazon are also fostering innovation. Natura operates in an

extremely competitive sector and its brand and mission is heavily based on the unique biodiversity of Brazil and particularly the Amazon, where they have a satellite lab working on naturally derived oil and soaps. They have close links with Brazilian universities and have a new center of a diversification plan into functional foods – or nutriceuticals’

– another expanding market.

 

Brazil is growing a strong system of support and incentives for innovation that is arousing interest the world over.

 

Indicators suggest that Brazil is not an easy place to start a business, ranking 122 out of 178 countries.131 Yet two transformative trends could revolutionise the environment for entrepreneurship. First, at the macro-economic level, the

Brazilian economy has been placed on a much more solid financial footing in recent years. In May 2008, Brazil was reclassified as ‘investment grade’ by a number of ratings agencies. A country that was a one-time foreign debt defaulter is now flush with foreign reserves. Net Foreign Direct Investment into Brazil more than doubled between 2006 and 2007 from US$33.4 billion to US$72.7 billion.

Second at the micro-economic level, there has been a surge of venture capital in Brazil. As Professor Pimenta at PUC Rio notes, ‘a few years ago, Brazil was a capital market desert... but over the last 2-3 years the concept of VC in Brazil has undergone an enormous transition – from an intellectual delight to a practical reality’. The majority of venture capital remains late stage – concerned with scaling up business rather than getting it off the ground – and a relatively small percentage is focused on science and technology. Yet private players are making inroads, whether it is multinationals like

Intel, who set up a US$50 million Brazilian venture fund in Business

2006, VC funds like UK-based Imprimatur, which recently set up an office on the Unicamp campus, or Brazilian players like Votorantim and Fir Capital. Expectations are clearly high and rising.

 

A new government supported seed fund, privately managed by development bank BNDES, opened in 2008 and will make its first investments of R$80 million (US$50 million) this year. The Brazilian innovation agency, FINEP, is also set to fund a series of local seed funds at state level.

 

Traditions

 

Brazil reflects an unusual mixture of tradition and openness. On the one hand, Brazil remains a highly religious, socially conservative country. World Values Survey, places Brazil firmly at the traditional pole. On the other hand – as Carnival itself demonstrates – Brazilian culture is much more outgoing, open and tolerant than this description might suggest. For example, 65% of Brazilians say homosexuality should be accepted, while in a Gallup poll last year 61% of Brazilians – more than any other Latin American country – agreed that ‘women in politics have done a better job than men’.

 

Curiosity or Surprise ?

 

Finally, Brazil was a surprise. Star performer in Gallup’s 2007 Subjective Well Being Index. The index ranked 130 countries according to the self-reported wellbeing of their citizens as defined by a range of measures, such as whether in the previous day respondents felt they had been treated with respect, or had laughed and smiled a lot. Although overall there was a strong correlation between affluence and

subjective well-being, Brazil came in 7th out of 130, far higher than its per capita income would predict.

 

Brazilians are increasingly green in their outlook. In a Pew Global Attitudes survey of 47 countries published last year, Brazilians emerged as the most concerned about global warming, with 88% describing it as a ‘very serious problem’. The proportion of Brazilians

identifying environmental degradation as the first or second

greatest danger facing the world climbed from 20% in 2002 to 49% in 2007, the largest increase of any of the 47 countries surveyed. When asked in a 2004 poll to identify the three major areas of research where science and technology should invest, respondents said medicines, agricultural technologies and solar energy.

 

Trust in politics is rather low, and that extends to government’s role in science and technology. Large majorities think that the environment should be protected even at the expense of some jobs, the national way of life should be protected against foreign influence, the state should have a responsibility to look after the poor, tighter restrictions should be placed on immigration, and military force may sometimes be necessary to promote world order – positions which implicitly or explicitly suggest a significant role for government.

 

Democracy

 

Brazil is a relatively young democracy. The country returned to civilian rule in 1985 after 21 years of military dictatorship and is now one of the world’s biggest democracies, with over 120 million voters.

Brazil held the first completely automated national election. Electoral Tribunal is currently testing a biometric version for fingerprint voting in the near future.

 

Designs on Nature

 

As the world’s second largest producer of soybeans and third largest producer of corn, Brazil has always been seen by the biotechnology industry as key to its worldwide expansion. With the legal position still hotly contested, a large number of farmers went ahead and planted GM soybeans (with financial support from the biotech industry), and by the end of 2003, around 10% of Brazil’s harvest was transgenic. On one side, pro-GM farmers’ associations and a number of prominent scientists and the biotech industry lined up in favour of a further loosening of restrictions, while on the other, NGOs such as Greenpeace, the Movement for Landless Rural Workers, the environment ministry and consumer groups insisted that a tighter moratorium should be enforced. It is estimated that 15 million hectares in Brazil are now planted with GM soybeans and cotton, making it the third largest market in the world.

 

Diversity, Creativity and Social Innovation

 

In a knowledge economy, more jobs require creative input, analysis and variation. Creative processes in the arts or science are not that different, which explains why some have questioned whether China – a prospective innovation superpower, but with a relatively closed political, artistic and literary culture – will achieve its full potential. By contrast, there are several reasons why Brazil is seen as a highly creative nation. Many begin with one of the defining characteristics

of Brazil’s population: its diversity. Brazil is home to the largest Italian restaurant in the world, a 300,000-strong ethnic Ukrainian community in the Southern state of Paraná and the largest Japanese population in São Paulo outside Japan itself. In Brazil, difference is the norm.

 

It is wrong to say there is no racial discrimination in Brazil, despite the country’s aspirations for a ‘racial democracy’. On average, black

and mixed race Brazilians earn half the income of the white population and the ‘melting pot’ of races exists primarily amongst the poor. But segregation has never existed in the way it did in North America.

 

Culture

 

The Brazilian carnival, when millions of Brazilians and foreign revellers

take to the streets for four days before Lent. This exuberant national festival is said to have its origins in the late 19th century when the Rio de Janeiro bourgeoisie imported the practice of holding Parisian style balls from Europe. Yet nothing could be more quintessentially Brazilian.

 

Brazil became an exporter of its antropofagismo culture in the late 1950s with bossa nova, followed in the 1960s by the Tropicalismo – a musical movement derived from a combination of bossa nova, rock and roll, Bahia folk music, African music and Portuguese fado. Contemporary exiles from the dictatorship, Caetano Veloso and Gilberto Gil, are the leading musicians of the movement. The latter was appointed Brazilian Minister for Culture in 2003. This rich, vibrant patchwork of influences has helped to ensure that Brazil’s culture is well known throughout the world. And it is big business. 290.000 firms operate in the cultural market in Brazil, with recent estimates suggesting cultural activities provided revenues of up to R$156 billion (US$97 billion) a year.

 

Gaming hubs are growing in Recife, Curitiba and the São Paulo–Rio axis, and Brazil’s film industry now accounts for almost a quarter of the national market.

 

Brazilian design, from Havianas flip flops to the ‘Favela chair’, is taking the world by storm and Oscar Niemeyer leads an international

architecture movement at the ripe old age of 101. The Brazilian

music industry is ranked by the International Federation of Phonography as one of the world’s most profitable – while a recent poll showed that two-thirds of Brazilians claim it to be their biggest source of national pride.

 

Even outside the formal creative sector, there are grounds for thinking that Brazil’s diversity could nurture the creative impulse that lies behind successful science and innovation. Some scholars argue that diversity within particular organisational settings aids problem solving and provides a context for people to think in new ways about new issues.Richard Florida, have claimed that difference is a fundamental element of creativity, and that it is diversity among the ‘creative class’ that helps generate the new ideas to power regional economic growth.

 

Social

 

Brazil made waves in the global software developer community when in 2005 it switched all its government IT systems from Windows to open source, Linux-based operating systems. Brazil has been an active player in the debate over alternative forms of intellectual property – ones that balance the interests of the owners of intellectual property with those of society as a whole. This is reflected in the ‘Development Agenda’ for IP, which Brazil presented to the

World Intellectual Property Organisation in collaboration with Argentina in 2004. Brazil’s music industry has also been experimenting with open source models for some time now.

 

AmazonLife manufactures chic handbags, bicycle courier bags, briefcases and other leather-like products using the sap of Amazonian rubber trees. Having ironed out some initial difficulties in the production process, now sells the raw rubber and finished bags to a number of clients including leading European fashion designers. Among the major beneficiaries of the company’s success have been the rubber tappers; formerly earning about $0.30 a sheet, they can now charge about ten times that. As well as their share of sales, the tappers share ownership of the trademark on the products with AmazonLife.

 

Stories of social innovations like this are not unusual, from Sociedade do Sol – which developed and distribute DIY cheap solar energy kits through schools – to local cooperatives for small scale hydropower generation projects that are winning plaudits from international green energy campaigners.

 

Likewise in health services and citizenship education, Brazil has a huge number of fascinating projects. The tyre manufacturer BS Colway

has reproduced an entire town to mini scale on a 3km squared site. The aim is to teach children aged from 7 to 10 how to live together as

citizens, respect differences and negotiate disagreements, whilst also teaching them about entrepreneurship. If Brazil can harness the potential of this disparate force of innovators, it could have a powerful effect.

 

If Brazil’s assets in terms of culture, diversity and creativity can be combined with the other elements of its ‘natural knowledge economy’, then the country is well placed to prosper, not only in S&T-based forms of innovation, but also the wider aspects of a successful and thriving innovation system.

 

Ultimately, Brazil’s goal should be to forge a common agenda for what Charles Leadbeater describes as ‘mass innovation’ – a wider culture of ‘citizen innovation’, in which the vast majority of people see themselves as contributing to a more innovative, prosperous and

sustainable future. In many countries, this would seem improbably or idealistic. In Brazil, it could just happen.

 

Good Story

 

Brazilians know it as the first case of biopiracy. When an English botanist called Sir Henry Wickham collected 70,000 rubber tree seeds in Brazil in 1876, it probably didn’t cross his mind that he might one day be considered responsible for the downfall of the Brazilian rubber industry. Yet those seeds (some of which are now on display at the London Science Museum) were dispatched to the Royal Botanical Gardens at Kew and subsequently to Malaysia, which soon became the world’s largest rubber producer. The Brazilian industry quickly found it could not compete with the better growing conditions in Malaysia, and

even today Brazil imports most of its rubber from Malaysia.

 

Collaboration

 

Despite the signing of the UN Convention on Biological Diversity in Rio de Janeiro in 1992, Brazil is still struggling to develop the legal framework that would allow access to biological and genetic resources for research and benefit sharing. There have been numerous high profile cases of Brazil failing to receive adequate compensation for the use of active ingredients extracted from its biodiversity. The situation is even more uncertain when indigenous knowledge is brought into the equation. Despite the specific challenges of collaborating on biodiversity research, overall international collaboration is growing at a

healthy rate. Brazil’s international collaboration grew 43% from 1998 to 2002, particularly with the US, UK, Germany, Spain, Canada and Argentina. Although mapping bilateral collaboration activities strategic priorities tells an interesting story about Brazil’s strengths in global

science, ‘bottom up’ links are likely to be distributed across a broader range of subject areas, with significant collaborations in physics, one of the most international sciences, as well as medicine, neuroscience and microbiology.

 

Despite log jams in some areas like biodiversity research, Brazil’s international collaboration in science is intensifying and diversifying. Although basic science plays a big role in its international co-authorships, high level strategic partnerships are predominently focused around Brazil’s natural knowledge economy pillars of energy, agriculture and climate change. There appears to be a tendency towards applied research that may not figure so prominently in bibliometric analysis, and we should be mindful of this when we assess Brazil’s global role in science and innovation.

 

Another feature that sets Brazil apart from India and China is the perceived balance of threat and opportunity. Much of the media coverage of China and India views the emergence of these countries’ scientific strength as a source of competitive threat. This attitude is also reflected in the tone of the 2005 US National Academy of Science report Rising Above the Gathering Storm. But collaboration and competition with Brazil is rarely couched in those terms. In contrast to fears of a potentially ‘techno-nationalist’ China, or of European

industries hollowed out by armies of Indian graduates, Brazil is seen as a more ‘Western’ power, whose political allegiances and multilateral tendencies are clear. This is despite the fact that Brazil is also increasingly a ‘Southern’ power, as that hemisphere’s capacity for scientific research and collaboration continues to develop.

 

UN Secretary General Ban Ki-moon went out of his way to praise the efforts Brazil was making to tackle climate change – efforts, he suggested, that had gone unappreciated elsewhere in the world. Brazil, he said, is ‘the quiet green giant’ of the fight against global warming. The phrase seemed to perfectly capture the way Brazil has

emerged onto the global map of science and innovation: discreetly, without a great deal of fanfare, and without stoking a sense of threat among existing science powers. While the global media has raved and bayed in equal measure about China’s enormous investments in science, or India’s huge potential stock of science graduates, there has been relatively little discussion about Brazil and its science prospects.

 

Developments have led some commentators to link Brazil’s geopolitical prospects with the future of its environmental technologies. But above all, they have exposed just how little the rest of the world knows about Brazilian science and innovation.

 

The variation that exists within Brazilian science and innovation. From high impact research in biomedical sciences in the South East of the country to the development of advanced digital TV platforms in the North and North East, different places offer contrasting environments for science and innovation. This variation can be positive, we have also highlighted its downside. We have seen how the distribution of

population, resources, knowledge and commercial opportunities

in Brazil is highly unbalanced, weighted strongly towards the South East, and making any assessment of scientific capabilities based on the ‘average’ particularly unhelpful.

 

It has been examined both levels of and change in science and innovation activity and achievement. We have mapped the rapid increase in postgraduate students and publications in Brazil – all the more impressive considering that the country has only had a national university system since the 1930s and concerted government pomotion of scientific research only began in the 1950s.

 

Today, Brazil’s top tier of universities would not look out of place next to those of Europe, and a select few feature amongst the world’s

top institutions. We have also highlighted the considerable growth in funding for science and innovation in Brazil since the late 1990s and the profusion of policy measures designed to improve Brazil’s mediocre performance in translating this accumulated knowledge into commercial innovation. We have seen that science and innovation is strongly concentrated in the public sector, and that the private sector as a whole still lags in science terms, despite the achievements of Brazil’s largest and best companies like Petrobras.

 

Growing base of knowledge and human capital: on a number of the conventional metrics of scientific output and potential, Brazil is improving fast. Brazil is now the 15th largest producer of scientific publications in the world, up from 23rd place in 1999, and its output is growing at around 8% per year. The number of PhD and Masters students produced today in Brazil is ten times as many as 20 years ago. Culture that nurtures creativity: with globally renowned

cultural industries and a diverse population, Brazil benefits from a culture that excels at adaptation and absorption of ideas and ways of life. This is a benefit for business as well as for scientific collaboration. Creativity can also be interpreted as a type of innovation through necessity, a catalyst for Brazil to become a leading source of social innovation.

 

Home-grown heroes: Brazil may not have one of the most outward-looking private sectors, but its home-grown multinationals such as Petrobras, Vale, Gerdau and Embraer have become international success stories. Jobs in these companies are highly sought after, raising the prestige of engineering careers. These can be a huge influence on building capabilities in the system of innovation thanks to the Sectoral Funds’ emphasis on R&D partnerships with universities.

 

Brazil needs the confidence to write a new chapter in its innovation story, and be the first country to place the environment at the heart of this. We heard about the cynicism that still lingers from earlier attempts to write such a story – the techno-optimism of earlier periods giving way to a cynicism that ‘Brazil is the country of the future and always will be’. Policy makers, NGOs, business leaders and academics need to confront that cynicism head on. As the quote from

Ban Ki-moon illustrates that many people are now taking Brazilian science and innovation seriously, and that has everything to do with its potential as a natural knowledge-economy.

 

In an increasingly competitive environment, Brazil needs to be able to communicate its distinctive strengths to the world. But it must showcase a reality that is broader than biofuels. Brazil must leverage the international attention biofuels has garnered to tell a more comprehensive story about its scientific strengths.

 

Recommendations for International Collaborators Look Beyond the Stereotypes

 

The focus of the international community’s interest in Brazil often revolves around the Amazon rainforest. While this is a key issue, international governments and collaborators must understand the breadth and diversity of science and innovation in Brazil and be

prepared for the contrasting strategies and contexts for collaboration that might be required.

 

Recognize Brazil as a Source of ‘New Science’

 

Whether we consider its facility for large scale electronic experiments,

its successes with open source science publishing or its push for models of knowledge ownership more appropriate to a changing global environment, Brazil has shown leadership in new ways of doing science. Collaboration in these areas could contribute important insights to wider processes of global knowledge sharing. Despite Brazil’s natural resources and endowments, and despite its propensity for creativity and new ideas, being a successful natural knowledge-economy will not come naturally. Much will depend on Brazil’s ability to convert these natural assets into a new national story about innovation – to be told to the world and inside Brazil – and to make good on the promise that that story offers.

 

Brazilians know that such promises have been made before and not been kept. But this time the prospects look unusually bright. One of the reasons Ban Ki-moon’s ‘quiet green giant’ tag may strike such a particular chord with Brazilians is that, intentionally or not, it finds an echo in Brazil’s own national anthem, a hymn laden with references to

Brazil’s extraordinary natural endowments. Brazil, according to one particularly apt lyric, is ‘a giant by thine own nature’. A better way of summarising the aspirations of this emerging natural knowledge-economy would be hard to find. But whether the next line – ‘and thy future mirrors thy greatness’ – turns out to be equally fitting, only time will tell.

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