Nearshore Americas

Where’s the Source of Innovation in Brazil? Take a Look at its Tech Parks

Brazil has strongly encouraged  the establishment of technology parks and business incubators, the latter mostly focused on small high-tech companies. There are currently 74 tech park initiatives all over the country, and 25 of those are currently active.

In the state of São Paulo, the government has sponsored a technology park program for several cities that have a high-tech base, such as São Paulo, Campinas, São José dos Campos, and São Carlos. These cities have strong research universities, such as the University of São Paulo, State University of Campinas, and Federal University of São Carlos.

These cities also are home to pure and applied research institutes and technology companies, such as Embraer, one of the largest aircraft manufacturers in the world. Campinas also boasts the largest number of high-tech business incubators and industrial parks (a total of eight), such as the CIATEC I and II, Softex, TechnoPark, InCamp, Polis, TechTown, Industrial Park of Campinas, among others.

Anprotec is the Brazilian Association of Technology Parks and Incubators. It was founded 22 years ago and today includes 272 entities, representing 400 incubators and 6,300 innovative enterprises that together generate 33,000 jobs. Anprotec promotes training, articulates public policies, and helps disseminate knowledge with initiatives such as the annual National Innovative Entrepreneur contest. This year’s winners will be announced during the XXI Technology Parks and Incubators National Seminar, which will take place at Porto Alegre, Rio Grande do Sul, next October 27th.

According to Guilherme Ary Plonski, President of Anprotec, the history of Brazil’s technology parks and incubators can roughly be divided into three phases:

From 1984 to 2000, there was a very small number of parks

• From 2000 — marked by the 2nd Conference of Technological Innovation — to 2006, the number started to increase, and some very successful parks, such as Porto Digital in Recife and TecnoPUC in Porto Alegre, both with a major focus on IT, were consolidated.

• From 2006, there has been an acceleration in the number of parks created, mostly because of the “Lei do Bem” — a law that provides tax incentives to companies that develop technological innovation.

Brazil currently publishes 30,000 scientific articles a year and has surpassed Russia in this area. According to UNESCO, the number of active researchers in Brazil has grown by 75% in the last 6 years – in total there are about 125,000 – more than in Argentina, Mexico, and Turkey combined. The challenge has been to translate this research into commercial products. In the same six-year period, the number of international patents registered by Brazilians decreased by 7%.

The technology parks are an economic development platform, leveraged by innovation, and to help bring this innovation to the market, Plonski explains, all different levels of the government (municipal, state, and federal) make available incentives and financing mechanisms for R&D, innovation, creation of start-ups, and technology parks. One example is the program Primeira Empresa Inovadora (Prime, First Innovative Enterprise), conceived and implemented by FINEP (the financing agency for the Ministry of Science and Technology). The program started in 2009 and has already supported 1,381 companies with resources that added up to approximately US$100 million.

Softwell, a company from Salvador (BA), was one of the companies that received resources from PRIME. It developed an integrated platform called Maker that simplifies the software development process. “Prime allowed us to start other projects. Until 2009, it was impossible for us to get access to government funds,” says Ian Cunha, Softwell’s Strategy Planning Director. In May 2009, the company entered into a strategic alliance with IBM. It is a global agreement that reinforces the close integration between Sotwell’s Maker and IBM’s Rational.

At the other end of the corporate spectrum is Petrobras, Latin America’s largest company, with US$128 billion revenue in 2010. It plans to invest US$224 billion in the next 5 years to enable the exploration of the “pre-salt” oil reserves. According to its president, Sérgio Gabrielli, taking advantage of the innovation law (Lei do Bem), Petrobras has financed and built R&D facilities in more than 70 Brazilian universities. In line with its investment plan, it has invited major international companies to build 14 R&D facilities in Brazil. These include Schlumberger, Baker Hughes, GE, FMC, IBM, and others.

Today’s interconnected, globalized economy is clearly in transition to a “knowledge era,” in which intangible resources such as creativity, entrepreneurship, and technical expertise are as critical as other economic resources. Innovation tends to flourish as a result of the confluence of several factors: The environment offered by technology parks, where people from different disciplines and backgrounds can come together, is surely one of them.

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The challenge that Brazil and other emerging economies have started to resolve is how to fund these ideas so that they can become products and services in the marketplace. In 2004, the available venture capital in Brazil was US$5.58 billion. In 2009, this total reached US$36.1 billion, according to GVcepe (Private Equity and Venture Capital Study Center from Getulio Vargas Foundation). This represented 2,3% of the Brazilian GDP. There is still a lot of room to grow, when compared to more mature markets. Government funding and support for venture capital funds has been one response. The other is the availability of privately funded equity funds. According to recent research by the EMPEA (Emerging Markets Private Equity Organization), Brazil surpassed China and became the leader in private equity investment intentions. As these intentions materialize, a R&D powerhouse might emerge.

Jairo Avritchir is a consultant on market development for Brasscom (Brazilian Association of Information Technology and Communication Companies). This column originally appeared in Sourcing Brazil

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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