SPRU - Science Policy Research Unit

The Brazilian innovation system

While Brazil seemed on course to become a more innovation centred economy, the implications of its recent political-economic crisis (2016) on strategic public investment threatens the future of innovation-led growth.

In a new report, commissioned by the Brazilian Government, Professor Mariana Mazzucato (RM Philips Professor in the Economics of Innovation) and Caetano Penna (Former SPRU PhD student and Research Fellow) outline how Brazil must put investment back at the core of its economic policy, to achieve economic recovery and long-term growth.

In their report – titled The Brazilian Innovation System: A Mission-Oriented Policy Proposal – the authors argued that a combination of recent lagging public investment and a history of low private investment, in the immediate context of an unstable political-economic environment, mean future generations are at risk of losing out on economic opportunities for decades to come.

The report considers the strengths and weaknesses of the Brazilian innovation system, and outlines concrete ways in which public investment can create new areas of competitiveness and ultimately crowd in private investment, driven by mission-oriented innovation. This is especially key in a country with historical low levels of business spending on research and development. The report defines mission-oriented policies as systemic public policies that draw on frontier knowledge to attain specific long-term goals which meet societal challenges—‘big science deployed to meet big problems’. Rather than a static list of sectors for government to support and subsidize it considers investment in new techno-economic paradigms, or new directions for existing technologies, to address societal problems that cut across many different sectors.

The report draws on Professor Mazzucato’s book on The Entrepreneurial State: debunking public vs. private sector myths (O Estado Empreendedor in Brazil) and her related work with Caetano Penna on Mission Oriented Finance for Innovation arguing that innovation-led, inclusive and sustainable growth requires rethinking the role of the state in the economy.  It examines the strengths and weaknesses of Brazil’s current innovation ecosystem and sets out how a new mission-oriented policy-framework could enable Brazil to rebalance public finances by increasing strategic investments that will address societal problems faced by the country while also increasing future revenues to rebalance the public budget over the longer-term.

The report’s policy recommendations include:

  • Making macroeconomic policies more supportive of explicit innovation programmes.
  • Building mission-oriented innovation system with a decentralised network of strategic public institutions that interact dynamically with business.
  • Reforming the Brazilian tax system and removing the barriers to implementing public procurement for innovation.
  • Establishing and reinforcing mechanisms for competition, cooperation, and accountability to balance the roles of state, business sector, and academia in mission-oriented policy programs.
  • Evaluating Brazil’s existing ‘mission-oriented’ policy experiments, including successful programmes such as health policies and the PAISS programme, but also less successful ones such as Inova Sustentabilidade, in order to learn lessons and establish improved mission-oriented policies.
  • Mission-oriented networks and partnerships should be created between public agencies to enable successful features of programs and institutions to be emulated
  • Missions should be chosen which create a long-term state agenda for innovation policies, addressing a societal demand or need, drawing on existing public and private resources, be amenable to existing policy instruments, and command broad and continuous political support.
  • Continue, improve and expand successful mission-oriented initiatives (e.g. health policies and the Inova program) alongside detailed scoping of existing and new capacities required for potential new missions. New missions could include: Urban, suburban and interurban infrastructure; Public service and public infrastructure; Agribusiness and familiar agriculture; Energy and the environment; and National security.
  • Future missions should, where feasible, be designed in a way that contributes to tackling inequality. In some cases, complementary investment in infrastructure and skills will be required if innovation policies are to be effective in addressing inequality.

Publication and dissemination 

The report was commissioned by the Brazilian Ministry of Science and Technology in 2015, through the Centre for Strategic Management and Studies. It was subsequently launched at the Ministry of Science, Technology & Innovation with Minister Celso Pansera on 6 April, 2016 who said that the study would contribute to the construction of the National Strategy for Science, Technology and Innovation. Read Minister Pansera’s response to the report and a corresponding article from Ministry of Science, Technology and Innovation. Brazil’s Ministry of Defence also published this reaction to the report.

Professor Mazzucato previously met with President Dilma Rousseff and Government Minsters in 2015 to discuss her work. 

Further information

Front cover of Mazzucato Penna Brazil report

The report: "The Brazilian Innovation System: A Mission-Oriented Policy Proposal"

Media coverage included interviews with Globo News and Valor, EBC Agência Brasil’s news story and photos from the report launch. Read the University of Sussex press release.