The paths of innovation in Brazil
Data from IBGE quantifies the impact of R&D strategies on company productivity.
For over a century, academics have debated the role of innovation in companies' productive performance, demonstrating how investment in research and development (R&D) results in better economic and competitive indicators. However, in the Brazilian market, the creation of entirely original products and processes tends to be seen as a risk by companies, which prefer to adopt and adapt third-party technologies.
To dispel this myth, economist Luis Otávio Lucas, in his doctoral research in Science and Technology Policy (SDTP) conducted at the Institute of Geosciences (IG) at Unicamp, quantified the positive impact of R&D strategies on productivity. To do this, he used data from the Innovation Survey (PINTEC) and the Annual Industrial Survey (PIA), both produced by the Brazilian Institute of Geography and Statistics (IBGE), to relate industrial productivity to four categories of innovation he developed for his master's thesis: pioneering innovation, pioneering imitation, follower imitation, and adoption.
The first one covers the concept of innovation. stricto sensuThe first type is when companies develop an original product or process worldwide. The second type introduces innovations only nationally. In turn, imitation-follower produces innovations only for the company, while adoption refers to the acquisition of innovation developed by other companies. "This was the main contribution of the work. This is because most of the literature in the field focuses only on a unified concept of innovation, without addressing separate strategies such as imitation and adoption," says the now-doctor.
Results
The investigation found that pioneers, both through innovation and imitation, tend to be the companies with the largest number of employees, the most investment in R&D, international operations, and participation in large business groups. While pioneering innovators have an average total expenditure on innovation activities of around R$ 26.320 per worker, imitators, followers, and adopters have respective averages of R$ 3.280 and R$ 1,5 per worker. However, pioneering innovators offset this cost with higher productivity values, both in the case of product and process innovations.
On the other hand, the analysis demonstrated that adoption appears to be an important strategy for companies that innovate in products. Although not associated with the highest return in productivity, the study showed that acquiring goods produced by third parties generates superior results compared to imitation. "This probably happens because companies choose to adopt a product only when they see a clear opportunity for superior performance," Lucas supposes.
The study also showed the prevalence of follower imitation in companies that focus on product innovation, and of technological adoption for those that innovate in processes. According to the data, 58% of companies with some innovation strategy practice follower imitation, and 26% practice pioneering imitation for products, while, in process strategies, 58% adopt and 32% practice follower imitation. In contrast, only 7% are pioneers in products and 2% in processes, a value that drops to less than 1% when the samples include non-innovative companies.
National market
To conduct the study, Lucas analyzed data from 2012 to 2014 provided by more than ten thousand industries to Pintec. Conducted every three years, the survey had its first edition published in 2000, and since then it has served as a barometer for the R&D sectors of companies, helping to reveal obstacles to innovation in the private sector. Due to the reduction in federal investments directed to IBGE during the Jair Bolsonaro administration, its last complete version was carried out in 2017, but it was not yet available when the author requested access to the data, which is why the thesis focused on the previous edition.
The choice of the transformation sector was also not accidental. Industry is the sector with the greatest representation in the IBGE survey, having motivated the creation of Pintec because it is the branch of activity with the greatest technological progress, says Professor André Furtado, who supervised the study. "And within industry, the transformation sector involves the activities with the greatest technological dynamism. That's where innovation is concentrated," he argues.
Despite this performance, it is noteworthy that most of the companies analyzed did not report any innovative product (65%) or process (53%) strategy. Since Pintec collects information over a three-year period, it is possible that the organization innovated previously and is not completely outdated. However, further studies are needed to compare the statistics with recent data, which will become feasible in 2027 when IBGE releases the next edition of Pintec.
According to Furtado, the highly protected domestic market and the concentration of economic activity in large companies—while small businesses survive on regional markets—help explain the low level of innovation. Furthermore, there is the low dynamism of the national industry, which has been stagnant for four decades. “The relationship between innovation and performance also occurs inversely: when the economy grows, companies invest more in innovation. Here, the number of PhDs doing R&D in industries is small, and this research, when it occurs, is not cutting-edge,” he clarifies.
According to social scientist Diego de Moraes, who co-supervised the study, solving these problems requires broadening the scope of public policies, moving away from the supply-side bias that characterized initiatives in recent decades, such as tax exemptions and subsidized credit, to focus on demand. Even so, he argues that little will change as long as companies don't feel the need to innovate. "If innovation is imperative to the company's strategy, it will do it. But if it's profitable in this market, it won't take the risk. So we remain at the mercy of what is produced in the world, with a more passive stance that is reflected in the strategies that Luis observed," he states.