Economy and Research must be Integrated

That was the headline from Valor’s article on tendencies from October, 2018, that struck me earlier this month and kept me thinking about the time I spent doing research for my master degree. Let me resume the Ediane Tiago’s article main points for you and hopefully we will start building up ground for how to tackle Brazilian politics on innovation.

1. Converging Forces

Ediane Tiago states that Brazilian economy is going to face two converging forces: advances on digitization and on science, both interdependent but rather miscoordinated either by government or corporations. A sustainable economic growth will demand alignment of both sectors, private and public as well as budged stability on science, technology and innovation.

2. Strategy

It is strategic: first world countries treat the subject with a hot line, directly with the presidency cabinet. Ruas, director of Latam relations of IBM reinforces that it is important to reinvent government, industry and services. “It’s time to act”, says. Digitization is a mean to create streams of knowledge transfer and business generation within layers of markets, it drags along scalability and high productivity through spreading development on applications, also within clouds and IoT, blockchain, A.I and big data. On Ediane’s own words: “They all have in common the strategy to suck data from the most diverse areas, from agribusiness to finance sectors”. Combine all these markets to see how big is the opportunity ecosystem.

3. Research and Business

Combine research to business. Business, specially cutting edge ones based on startups generate huge amounts of data, it only needs to be harvested as we do with crops. Seeds for Science, once studied, the potential of new discoveries is immense, and they will be powered by A.I. and machine learning algorithms.

4. Break the entrance barrier to the Clound

Break the entrance barrier entering from the Cloud. There is no need to make high cost spending into infrastructure anymore, and that is game changing. Just adopt the shared use of computer power to deliver your application and scale as you need.

5. Brazil is Behind

Brazil, unfortunately, is behind. We figure on the 64th position of the Worlds innovation ranking (IGI), behind South Africa and Mexico. Our Latin America neighbor Chile stands on the 47th position, just engaging Russia for the 46th position and Portugal occupy the 32th ranking. Israel, the 55th economy in the world ranks as 11th. Back in 2011, we were the 47th on the same ranking. It’s absolutely not compatible with our position as 9º economy in the world, as quoted by Gianna Sagazio from CNI (National Industry Confederation). Edianes argument is that State must promote and incentive scientific development but after each year tax adjustments steal resources from research and development of public spending. And this routine has been undermining innovation as an anticyclical strategy.

6. 2% GDP for Research

The worlds minimum percentual of GDP, among countries competing on technology, applied to development and research is 2%. Brazil is striving to accommodate 1.2%, while South Korea dumps 4.24% from an economy worth of 1.54 trillion USD (Brazil’s worth 2 trillion USD). Roughly 41 billion USD of extra spending on the South Korean technology ecosystem. Compare this amount on a area basis and we get a massive amount of targeted capital. The Chinese understood this and are ahead. As shown by OECD, they leaped from 0.89% to 2.12% on sixteen years and their economy is worth, today, 12.2 trillion USD. It’s 258 billion USD spent on R&D. Every year.

7. Brazilian Vocation

Brazil has a vocation, but innovation demands dicipline. It’s true that Brazilian agribusiness is powerful, but we drive spearpoints in other areas too: renewable energy, like biofuels, and health. We have also brains: Brazilian scientific production is of high quality. Universities like UNICAMP, USP, and I am also adding UFSC, produce science of high impact. Please take a moment to search on the CAPES database of scientific production to see that we are a flourishing environment of good ideas and research in a myriad of topics.

To conclude,

Somewhere along the road we took a wrong turn, industry and financial confidence in the government failed and the so important partnership — Enterprise, Government and University — went amiss. But we are resilient, Brazilian startups are growing in numbers and in importance. They are trying to give answer to these problems we are facing with scientific backgrounds and truly innovative Business Models, like Nubank’s. People who aimed at agribusiness are harvesting great income and those investing on sustainable mobility and services see their consumer base increasing. Our government, however, needs to wake up to this strategic necessity and really rescue our research: investing money and human capital.

It will always be late if we don’t begin.

Reference

Tiago, Ediane. (2018). “Economia e Pesquisa devem ser Integradas”. Valor Especial, outubro 2018, pg. 11–14.