Financing Innovation in Brazil: Recent Achievements and Future Challenges

Abstract

This article discusses some of the financing mechanisms for innovation created recently by the Brazilian Government, in particular those with participation of BNDES and FINEP. Brazil, despite having redirected its Science and Technology Policy in the late 90s and reformulated its funding mechanisms inspired in OECD countries, did not achieve satisfactory results, as shown in this study. Investments in innovation are shy, with little participation of the private sector. In recent years, the Brazilian Government has been developing a series of initiatives to broaden and make more effective its participation in financing innovation, as well as stimulate private investment. It may be observed that these initiatives seek to fill existing gaps and seem to consider some successful characteristics of foreign mechanisms, seeking a greater alignment with the interests of the market and focus on small and medium-sized companies, as well as focusing on increasing the link between academia and business, and unifying efforts among government agencies. Some improvements, however, still seem to be necessary, not only in the financing mechanisms, but also when tackling larger country issues.