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“No company innovates to look good or because “it’s cool”; a company innovates because it is a market imperative”, Paulo Mól from IEL

02/10/2015

In an interview for the International Relations Division of the Brazilian Institute of Information in Science and Technology (IBICT), Paulo Mól comments about innovation in Brazil.

Paulo Mól is National Superintendent of the Euvaldo Lódi Institute (IEL). The research about innovation was conducted by the National Confederation of Industry (CNI).

Held with the goal of mapping the perception of Brazilian companies and foreign executives about the current scenario in innovation inside and outside major companies in the country, the survey reveals that 54% out of all respondents considered that the level of innovation in Brazil is “low”, while other 8% assessed it as “very low”. Other 35% affirmed “it is neither high nor low”, while only 3% believed Brazil has a “high” potential for innovation.

In the interview, Paulo Mól, an economist who also holds a master’s degree in economics, talked about international cooperation and science, technology and innovation (CT&I) for Brazilian businesses on an international level.

Check out the interview (written and extended version below) or click here to watch it on Youtube (in Portuguese).

What has this research carried out by the CNI revealed about innovation in Brazil?

It is a novel research, which was performed for the first time with 100 entrepreneurs, 60 of them from micro and small enterprises and 40 from large companies. For this research, the companies chosen were ranked among the highest in Brazil for innovation. These are companies that show systematic and regular innovation. The survey reached some important conclusions: the first of them is that 62% of companies indicated that the innovation level in Brazil is low or very low. This is relevant because entrepreneurs stated that one of the main reasons for these low levels is exactly the fact that there is not a culture of innovation in Brazil.

This is an important point because entrepreneurs are complaining about their own sector and bringing to themselves the responsibility to be the protagonists of an innovation agenda, as it is in all of most developed countries in the world. This is new because, normally, one has several agents working in innovation, and transferring responsibilities to one another. In this research, entrepreneurs showed that they also have a part to work on; whilst there is a need for a well-formed institutional environment and for universities that are more aligned with business demands. The main conclusion is that the innovation agenda is an agenda for everyone.

How can innovation be enhanced in Brazil and how can the Government, universities, enterprises and the third sector act in order to promote it?

The first step is to have coordinated activities, unquestionably. The issue of innovation in Brazil is a very complex agenda that depends on multiple agents. There shouldn’t be only improvement on institutional conditions offered by the Government; this is just part of the process. It is also necessary to have a better performance of entrepreneurs and universities. This is an agenda for the country. To improve our situation concerning innovation, a national initiative is needed to support the innovation agenda.

Regarding the process of internationalization, how can Brazilian companies work in partnership with those outside the country?

The innovation agenda is interconnected and associated with an agenda of internationalization. Many times, people do not directly associate work, innovation and foreign trade. Research shows that the most innovative companies are exporters or those ones that have been internationalized. If we wish to have a better performance in innovation, we must encourage our businesses to operate in the international market. And why is this so? When a Brazilian company starts to operate in the international market, it will be immediately exposed to new consumers – much more demanding consumers, new management models, new suppliers, new materials, new everything.

Therefore, it has to adapt to work in a much more demanding market. When, a company innovates, it benefits from high productivity gains, which are brought back to the company’s headquarters in Brazil. This process of internationalization and development of partnerships with international firms, universities and laboratories abroad is extremely important. The innovation agenda is an agenda that needs an open and dynamic economy that is mainly linked to more developed countries.

Could you talk about the expansion of business partnerships? What is the importance of these partnerships? And how turn partnerships that are historically based on individual connections into institutionalized contacts?

Innovation today requires an important level of resource migration. Nowadays, when we talk about innovation, we’re talking about open innovation. It is highly unlikely that a company will innovate only using projects that are intramural, inside the company itself; it needs resources that are located outside of these companies. CNI has recently worked with 22 companies showing how these Brazilian companies innovate. And what we realized was this: there are many ways for companies to innovate; there is not a rule of how to innovate. Innovation can happen in several ways, but there is an absolute common point to all: no one innovates alone.

When a company decides to innovate, it will automatically reach out for several other agents. It needs to interact with universities, products suppliers and buyers, because many times these actors bring ideas to improve products. The paths are multiple, but one thing is for sure: no one will innovate alone. The innovation agenda largely requires partnerships, which will happen in several ways. These partnerships can happen from technological transfer processes to the exchange of labour.

It is essential to have researchers from Brazil that are able to go to foreign laboratories to become familiar with international technologies. And also the opposite, researchers from other countries should be able to come to Brazil to work here and together develop new technologies, making knowledge flow. One of our questions is exactly that: how do these companies innovate? A significant part of these firms showed that innovations happen within these exchanges with universities and research centres. Therefore, those exchanges need to increase more and more. Then, we see a topic for improvement, especially for universities.

That is because 89% of companies stated the following: our human resources – when they come out of universities – are not fully prepared to work in the market. And why aren’t they? Because generally, we need more than technical skills, which are what universities today are prone to teach. Today, quite possibly when an engineer graduates and enters the workforce, the first tool he will work with will be a management tool, a “Project” software. And when did he learn that? This is an important process that needs to be in our agenda, and then what we are talking about is an exchange of information, to know how the world outside is training our engineers so that we can have a better performance here.

What is necessary to increase international cooperation in CT&I in Brazil?

We need to modernize international cooperation. International cooperation has to be different from the 20th century model, when it was almost exclusively based on technology transfer between companies and universities. Today, companies are seeking more partnerships with private laboratories or companies out there. I’m not saying that the agreements with universities are not important, but there are other agents who have entered this open innovation model and are equally important. Today, for example, when I talk to companies, they want their researchers, their staff, to visit other laboratories. When we asked entrepreneurs which countries’ innovation agenda they admire the most, surely are the United States, Germany and Korea. Thus, enabling our students and researchers to be in contact not only with universities, but also with the laboratories in those countries is a very important breakthrough.

What is the role of information and communication for innovation? Why are they important to increase innovation?

No company innovates to look good or because it’s cool; a company breaks new grounds because it is business imperative. It breaks new grounds because it needs to increase productivity, it needs to boost productivity and gain a competitive edge. This is the logical process. Innovation is a business attribute anywhere in the world, and the 21st century is known as the century of knowledge. If you do not have access to information and knowledge, you are out of the game. This is the game. The more access you have to data and information, and the better you manage to classify this information, the more you will be able to use it to your own advantage, the better. A company has to be connected with its consumers’ needs to see if its product meets the market demand.

And why does it change? Because of the world’s natural tendency is to be always dynamic. So, for example, environmental issues are starting to become more relevant. Thus, it is important to know which are the main technological routes and what the world is thinking, in addition to good observatories/centres, with updated information, that give entrepreneurs access to this information, one needs to develop more and more what we call competitive intelligence, and to know what is happening out there and how Brazil stands within. This is a very important mission for the Government.

Brazil is a country that has a wide range of multinational companies in its territory, but usually these companies are working in operational areas and not much in research and development. It is important to make these companies bring their research and development centres and, in order to do that, it is essential to have an agenda of competitive intelligence. The Government has to have a very clear idea of which companies they are working with, where they want to open their R&D centres and how to attract these R&D centre to Brazil. There is a whole attraction strategy, in the same way Brazil has applied to hold the World Cup and the Olympics, the country should have an active agenda of attraction of R&D centres, because it would bring knowledge, better jobs and income to the country. This is only possible to achieve if a strategy for competitive intelligence is created, if we have the knowledge of how opportunities can be captured and how to work their way to Brazil.

Click here to read the complete survey.

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