The innovation rate of industry, of selected services (edition, telecommunication and computer science) and of the Research and Development sector...

The innovation rate of industry, of selected services (edition, telecommunication and computer science) and of the Research and Development sector (P&D) rose from 34.4% in the 2003-2005 period to 38.6% between 2006 and 2008, according to the 2008 Survey of Technological Innovation (PINTEC). A total of 106.8 thousand companies were investigated. Among those, approximately 41.3 thousand implemented new or substantially improved products and/or processes between 2006 and 2008. That means that, among the 100.5 thousand industrial companies, 38.1% were innovative – a smaller percentage when compared with the P&D sector, with an innovation rate of 97.5%, and with the selected services, with 46.2%.

This is the highest innovation rate of the industrial sector since the survey started to be conducted in 2000. By then the percentage was 31.5%, rising to 33.3% in 2003 and 33.4% in 2005.

The share of companies’ revenue spent on innovative activities was virtually stable in relation to the previous survey, changing from 3.0% in 2005 to 2.9% in 2008. In industry, this percentage was 2.5%, below the one of selected services (4.2%) and the one of P&D (71.1%).

The highlight, between 2006 and 2008, was the use of Internet as an important propeller of the innovative process. In selected services, the Internet was used by 78.7% of the companies. In the industrial sector, the percentage was smaller (68.8%). However, this is the first time in all the editions of the survey that the Internet was considered the most relevant source of innovation.

Moreover, there was an increase in the percentage of innovative companies that used at least one instrument of governmental support: from 18.8% between 2003 and 2005 to 22.3% in the 2006-2008 period. That corresponds to a total of 9.2 thousand companies, of which 8.7 thousand were industrial companies.

The 2008 PINTEC provides data for indicators of the Brazilian companies’ technological innovation activities. For that, it adopts the new National Classification of the Economic Activities (CNAE 2.0), limiting the comparison with data previous to 2008. The first survey was conducted in 2000. The 2008 edition broadened the concept of innovation, as it incorporated the assessment of organizational and marketing novelties to the survey.

Table 1 - Innovation rate in the Brazilian industrial companies

Automotive industry records innovation rate above 80%

The industrial companies with the highest number of employed persons register superior innovation rates:

in those with 500 or more employees, 71.9% innovated in products or processes (against an average of 38.1%), 26.9% released new or improved products in the national market and 18.1% implemented an innovative process for their sectors in Brazil. In the selected services big companies, 67.2% were innovative (against an average of 46.2%), 24.3% directed their innovations to the Brazilian market and 22.5% innovated in processes. In the P&D companies, the innovation rates are high for all sizes of company, since promoting innovations is their main function.

In 4.1% of the industrial companies, new or substantially improved products were released in the national market, while for selected services, that percentage was 9.1% – inferior results when compared with those of P&D: 72,5%. Concerning substantially improved or new processes for the sector in Brazil, the rates are lower: 2.3% in industry, 2.8% in selected services and 60% in P&D.

The eight activities to register the highest rates of innovation are classified as high and mid-high technology, according to the Organization for Economic Co-operation and Development (OCDE), adapted by Eurostat to CNAE 2.0: automobiles, pick ups, SUVs, trucks and buses (83.2%), pharmaceutical and pharmochemical products (63.7%), other optical and electronic products (63.5%), chemical products (58.1%), communication equipment (54.6%), computer equipment and accessories (53.8%), machines and equipment (51.0%) and electronic components (49.0%). Below the average of industry, there is only one sector of mid-high technology: other transportation equipment – 36.1%. The remaining sectors are low technology, with the lowest rates of innovation: mining and quarrying industry (23.7%) and wood products (23.6%).

The innovation rates recorded by services between 2006 and 2008 are among the highest ones: computer program licensing and development (58.2%), telecommunication (46.6%), other information technology services (46.1%), music edition and recording (40.3%) and data treatment, Internet hosting and other related activities (40.3%).

Percentage of industry’s revenue invested in P&D rises from 0.57% to 0.62%

The purchase of machines and equipment was, in 2008, the most relevant activity both for industry (78.1%) and for selected services (72.3%). As to industry, it was followed by two activities that complement the purchase of capital goods: training (59.4%) and industrial project (37.0%). As for selected services, the activities were training (66.6%) and the purchase of software (54.8%).

In 2008, while industry invested 2.5% of its revenue in innovative activities, the selected services companies spent 4.2% and the P&D companies, 71.1% from their total effectively available resources. Among the ten sectors with the highest revenue expenditure on innovative activities, three are included in selected services: data treatment, Internet hosting and other related activities (6.5%), telecommunication (4.6%), computer program licensing and development (3.8%).

As for the industrial activities, the highlights were manufacturing of other transportation equipment (5.1%), manufacturing of pharmaceutical and pharmochemical products (4.9%), printing and reproduction of recorded media (4.4%), manufacturing of automobiles, pick ups, SUVs, trucks and buses (4.2%), manufacturing of diverse products (4.1%), manufacturing of communication equipment (3.8%) and manufacturing of other optical and electronic products (3.6%).

The industrial sector invested 0.62% from its revenue in P&D, 0.5 percentage points more than in 2005 (0.57%), not considering the activities of edition and recycling. However, the total investment of the industrial sectors, selected services and P&D remained stable at 0.8%.

72.5% of the companies invested in continuous development and research

Between 2006 and 2008, 4.8 thousand innovative companies invested in internal P&D activities, distributed as follows: 70.3% in industry, 19.1% in the P&D sector and 10.5% in selected services. Most of the companies (72.5%) did it continuously, that is, 3.4 thousand companies were responsible for 97.5% of the investment. Selected services registered a higher percentage than industry with respect to the participation of companies in continuos P&D activities: 86.4%, responsible for 98.0% of the investment, against 70.7% of the industrial companies, accounting for 96.8% of the investment.

Concerning human resources involved in internal P&D activities, there were approximately 73.3 thousand people employed in that area: 48.1 thousand in the industrial companies, 18.2 thousand in P&D and 7 thousand in selected services. In the analysis of qualification , slightly more than 60.0% of the people working in these P&D activities had a higher education degree, 47.8% had a graduation degree and 14.0% had a post-graduation degree.

Internet is determinant in the innovation process

In industry, the main five information sources used for the innovation process were Internet (68.8%), clients (68.2%), suppliers (65.7%), companies’ internal areas (61.5%) and fairs and exhibitions (55.6%). In selected services, the most expressive information sources were similar to those of industry: Internet was used by 78.7% of the companies, companies’ internal areas by 73.5%, clients by 69.3% and suppliers by 55.0%.

The P&D sector had a different result. All companies used the ideas from their own P&D department in a relevant way. Following that, other sources of innovation take on importance: conferences, meetings and specialized publications (92.3%), universities or other centers of higher education (87.2%) and computerized information networks (84.6%).

Out of the total of 41.3 thousand innovative companies, 10.4% established some sort of cooperation with other organizations to innovate products and/or processes between 2006 and 2008. That points to a growth in relation to PINTEC 2005, when the percentage was 8.5%.

The bigger the company, the higher the percentage of cooperation activities. In industries, 10.1% of the innovative ones established cooperation activities, but, considering those with 500 or more employed persons, this percentage is higher, 35.3%. The same occurred to selected services, 13.1% of the innovative companies performed cooperation activities and this percentage increased as the size of companies were higher, reaching 33.8% of the companies with 500 or more employed persons. In P&D companies, the scenario is different: almost all companies establish cooperative arrangements (92.3%).

Comparing the percentage of innovative companies that used at least one instrument of governmental support between 2003 and 2005 with the result in the 2006-2008 period, there was an increase from 18.8% to 22.3%.

Around 9.2 thousand companies utilized come sort of federal public incentive to innovate. Among the innovative industrial companies, 22.8% (8.7 thousand companies) obtained at least one government benefit to develop their product and/or process innovations between 2006 and 2008. This proportion grows according to the size of the company: 22.2% of those that employ between 10 and 99 people, 23.7% of those that employ 100 and 499 people and 36.8% in companies with 500 or more employed people, thus, the big companies were relatively more benefited by governmental programs.

In selected services companies, 15.3% of the innovative companies used some sort of government support, a percentage below the one observed in the industry; almost all the P&D companies received some sort of governmental support between 2006 and 2008 (37 of the 39 innovative companies).

The lack of qualified personnel is a relevant obstacle to innovation

The survey shows that the percentage of innovative companies with problems or obstacles that hamper innovation increased from 35.2% in Pintec 2005 to 49.8%. This proportion was structured as follows: 49% of industrial companies, 54% of selected services and 79% of P&D.

In industry, the first-place obstacle was high innovation costs (73.2%), followed by high economic risks (65.9%), lack of qualified personnel (57.8%) and few funding sources (51.6%). If such data are compared with the trend in this sector in PINTEC 2005, a change can be observed due to the relative increase in importance of the lack of qualified personnel against the drop of relevance as to few funding sources as obstacles to innovation.

In P&D companies the negative highlights were high innovation costs (73.3%) and few funding sources (70.0%). In selected services, the main problem was lack of qualified personnel (70.4%), followed by economic problems: high innovation costs (72.1%), high economic risks (62.6%) and few funding sources (48.7%).

In the 2006-2008 period, 62.9 thousand companies did not promote product and/or process innovation nor developed projects. That accounted for 58.8% of the total surveyed companies in the industrial, selected services and P&D sectors. There was a fall in relation to the previous survey, in which 63.3% of the companies were not innovative.

In the 2006-2008 period, 55.8% of the companies that did not innovate pointed to market conditions as the main obstacle. Between 2003 and 2005, almost 70% of the companies had pointed to that as the main obstacle. In comparison with 2003-2005, there was an increase in importance of companies that had previously innovated (from 11.4% to 15.8%) and of other obstacles (from 18.9% to 28.4% ).

Non-technological innovations have integrated PINTEC since 2008

Since the 2008 PINTEC, innovation has been analyzed according to a wider concept, which incorporates non-technological innovations: organizational and marketing.

Among the 41.3 thousand companies that were innovative in product and process in the 2006-2008 period, 69.0% performed at least one organizational innovation and 59.5%, one marketing innovation. In the industrial companies these percentages were 68.7% and 59.3%, respectively, inferior rates in relation to those observed in selected services (72.5% and 61.0%, respectively).

As to marketing innovations, the key strategies in industry and selected services are the highlights: in industry, novelties relative to esthetics, design and other changes (45.8%) and in selected services, the adoption of new marketing concepts and strategies (43.6%). As for organizational innovation, in both sectors the highlights were management techniques to improve work practices and routines (47.1% in industry and 60.9% in selected services) and new work organization methods (45.2% and 54.3%, respectively).

In the P&D sector, nine out of ten companies that are innovative in product and process also implemented organizational innovations. Conversely, in terms of marketing, the rate was lower (51.3%), because most of these companies do not adopt market key strategies.

In non-innovative companies marketing (45.0%) and organizational innovation rates (39.3%) are lower. In industry, marketing innovation rate (39.5%) is higher than organizational innovation rate (36.1%), in services, the highlight is organizational innovation rate (55.1%), while marketing innovation rate is 44.5%.