A visit to Brazil
I recently made my first proper visit to Brazil, visiting Rio de Janeiro, São Paulo and Brasilia, and meeting a wide range of people, from banks and innovation agencies, to universities, accelerators, start-ups, civil society groups, arts collectives and government ministries.
Everyone now knows that Brazil is on a roll, with strong growth. It's becoming associated with dynamic technology and industries as well as soccer and samba, and with the imminent 2014 World Cup and 2016 Olympics it's certain to become even more visible in the years ahead. For us at Nesta it's particularly interesting to see the new ways in which the country is innovating.
The big picture is that Brazil's position is also complex: Latin America has had many false starts over the past century and many economists warn that growth could be cut short by a variant of Dutch disease (the mix of problems often afflicting countries with strong commodity and raw materials exports: these tend to corrode productivity, and push exchange rates too high). Socially Brazil remains very unequal, despite the great progress made by the current government in reducing poverty. In international affairs Brazil - along with the other BRICS (Russia, India, China and South Africa) - has shown its power to block, but has yet to show so clearly how it can lead.
The innovation agencies and funders
BNDES (Vice President Ferraz) and FINEP - are striking for their scale and their ambition. BNDES has run a big programme of support for software and pharma for a decade, improving standards, trying to get industry to shift from copying to origination, and now encouraging acquisitions abroad to take advantage of relatively cheap prices. FINEP, the innovation agency, under the leadership of its President Glauco Arbix has been pushing the frontiers on energy technology as well as investing heavily in health, for example with a big neuroscience programme. But both struggle with the relatively low investment in innovation by Brazilian companies (and a possible 10-25% fall since the financial crisis) despite generous incentives.
A good deal of their attention focuses on universities - we visited both the University of SÃo Paulo (USP) and the Federal University of Rio de Janeiro's (UFRJ) graduate engineering school, COPPE - which are rapidly becoming better at spinouts and technology transfer. Brazil's science system has major strengths - particularly in fields like biofuels - documented by my colleague Kirsten Bound, who was also on the visit, in a previous report Brazil: the Natural Knowledge Economy, part of The Atlas of Ideas.
Many multinationals are relocating research labs there, including British Gas and Peugeot Citroen, which is opening a 10 year research centre on biofuel-powered combustion engines. But universities were forbidden to deal with the private sector as recently as the early 2000s, and although there are very dynamic innovation hubs (like USP which benefits from their extraordinary funding base, a guaranteed share of state tax revenues via the state research funding agency, FAPESP) innovation isn't yet in the bloodstream in much of higher education.
Telefonica Foundation led by FranÃsoise Traipenard, is another funder with big ambitions - in particular to grow and improve uses of technology in schools. One of their aims mirrors discussions we've been having about acting as a curator for new technologies, providing guidance on which ones actually work.
For Nesta, there are many follow ups - and great potential partners, full of ideas and energy. Although Brazil's next few decades will be challenging, this is a part of the world that seems to assume that life will get better, and that optimism is infectious.