Government, Innovation and Technology Policy, An Analysis of the Brazilian Experience during the 1990s

The purpose of this paper is to survey the various ways through which the Brazilian state has intervened in the area of technology development at the enterprise level. Government intervention in technology development has manifested itself in terms of four areas: First it had placed restrictions on the import of foreign technology, but most of these restrictions were removed or diluted as part of the liberalisation strategy of the 1990s. Consequently the cost of purchasing disembodied technology has registered some significant increases during the post-liberalisation phase. Second, it has initiated a number of schemes through which domestic technology development is financed. In terms of instruments, these can be classified into loans and grants, tax incentives and venture capital. Third, the state has intervened to create an adequate supply of extremely well-trained scientific manpower. While there appears to be no supply bottlenecks, the demand for scientists and engineers appears to be very low. The very low density of scientists and engineers indicates this. Finally the Ministério da Ciência e Tecnologia (MCT), the main administrative agency responsible for innovation policy, seems to be aware of the problems faced by the innovation system in the country. It is in the process of giving shape to a new policy on innovation, has introduced new research grants, etc., but it has not addressed itself to the fundamental weakness of the innovation system, namely the low density of scientists and engineers in the country