The Annual Survey of Mining and Manufacturing Industries 2003, PIA Enterprise 2003, analyzed the structure of companies based on their investments in Research and Development (R&D).

The Annual Survey of Mining and Manufacturing Industries 2003, PIA Enterprise 2003, analyzed the structure of companies based on their investments on Research and Development (R&D). The subsector of transportation equipment, which includes the air force industry, leads the ranking with expenditure on P&D equivalent to 2.72% of its earnings. On the other hand, the industries of coke, alcohol and development of nuclear fuels invest only 0.03% of their earnings on R&D.

In 2003, only 9.9% of Brazilian industrial companies could be considered of high technological density, that is, companies investing from 0.96% to 2.72% of their net income from sales (earnings) in activities of Research and Development (R&D). Although there were few companies in this situation, and they had the lowest number of employed persons in the Brazilian industry, the high technology sectors accounted for the highest investments by company, average salary and productivity at work – all above the national average.

The analysis of data took into consideration levels of technological intensity. Industrial activities were classified into groups of low, medium-low, medium-high and high technological intensity. The ratio between the expenses on R&D and the net income from sales, in decreasing order and based on information from the Technological Innovation Survey - PINTEC 2000, was used.

The figures for PIA Companies 2003 confirmed that the Brazilian industry is very concentrated, in terms of companies and employed people, for activities of low and medium-low technological density. However, the four groups are balanced in relation to the cost of industrial transformation, according to the table below:

The sectors of high and medium-high technological intensity held 17.7% of the companies and employed, in 2003, 25.8% of the overall number of persons employed in industrial activity. The companies of low or medium-low technological intensity were the majority (about 82%) and concentrated employed persons (74%). There was balance concerning participation in the costs of industrial transformation: the groups with high and medium-high technological intensity represented 47.5%, whereas those with low and medium-low intensity represented 52.5% of the total cost. The table shows that the situation changed little between 2000 and 2003.

For the group with low technological intensity, the average expenditure on R&D reached only 0.21% of the earnings. The inferior limit of the group is the subsector of coke, alcohol and development of nuclear fuels (0.03%); the superior limit is textile industries (0.27%). It holds sectors which traditionally incorporate new technology developed by others – textile industry, for instance – and in which there is little chance of increasing the expenditure on R&D, such as the subsectors of animal slaughter and rice processing.

Among the sectors with medium-low technological intensity, the average expenditure on P&D is 0.36% of the income, and the superior and inferior limits are represented, respectively, by the industries of leather, leather artifacts, travel articles and footwear (0.29%) and siderurgy (0.44%). The group is mainly composed of intermediate goods industries.

Considering companies with medium-high technological intensity, the sector with the highest percentage of expenditure on R&D is pharmaceutical (0.83% of income), opposite to cellulose and paper (0.49%). The average investment on R&D, in this group, is 0.63%, a percentage little higher than the average for the Brazilian industry (0.60%).

Finally, concerning the group with high technological intensity, whose average investment on R&D is 1.31% in relation to the income, the limiting sectors are petroleum refinement (0.96%) and transportation equipment (2.72%). The latter includes the manufacturing of airplanes. Concerning refinement, the major investments are due to the demand for new technologies for the extraction of petroleum at deep sea level, and the competition in the fuel market.

Income, investments, wages and productivity grow with the increase of technological intensity

The table shows the economic indicators for 2003 concerning the groups classified in terms of technological intensity by industrial sectors.

The data show that, in general, the highest the level of technological intensity, the higher the income, the average investment by company, the average wage and the productivity.

Thus, the companies of high technological intensity invest little more than three times the national average (R$ 1.47 million versus R$ 447 thousand). The income by company in this category (R$ 19.9 million) is also almost three times the national average (R$ 7.1 million); productivity is two times the higher than the national average , R$ 141 thousand and R$ 68 thousand, respectively. The productivity of companies with high technological density is a consequence of the relation between high technology levels to number of persons employed by unit of product.

The indicator of average income confirms a positive relation between the size of the company and its level of technology intensity. Such pattern probably occurs due to better prospects for investments in a big company, required as the technological intensity increases. The average investment by company also increases with the level of technology.

On the contrary, the income of companies with low technological intensity is, in general, 40% lower than the national average (R$ 4.3 million versus R$ 7.1 million), similarly to investments (45% lower, R$ 244 thousand versus R$ 447 thousand); and productivity (35% lower, R$ 44 thousand versus R$ 68 thousand).

Petroleum Refinement is the National Highlight

The subsector of petroleum refinement, which belongs to the group of high technological intensity, is the major contributor to the investments of national industry (20.2%).

The companies of the transportation equipment subsector, which had the highest proportion of investments on R&D in relation to the net sales income (2.7%), were responsible for 1.7% of the costs of industrial transformation and for 1.2% of the investments in industry as a whole.

Investments by the subsector of chemical products (7.7% of the overall investments, fourth in the ranking for this indicator) were the major highlight among companies of medium-high technological intensity in 2003. This subsector also holds a relevant position concerning costs of industry transformation, with the third best performance, 8.4%.

In the group of companies of medium-low technological intensity, the highlight is siderurgy. It concentrates most of the investments of this category (8.6%, the third in terms of participation) and also represents the highest figures for costs of industrial transformation in the group 5.2%), average investment (R$ 9.6 million), average income by company (R$ 90 million), productivity (R$ 178 thousand) and wages (R$ 1.953). On the other hand, the subsector of leather, leather articles, travel articles and footwear, which presented the smallest participation in investments, productivity and average wages was almost in the last position in terms of industrial transformation.

With reference to the companies of low technological intensity it is worth mentioning the subsector of food products, which holds second place is the second in terms of percentage of investments (10.3%) and of participation in the overall costs of industrial transformation (14.0%). This subsector also presents the highest percentage of employed persons (17.8%). The opposite occurs in the subsector of clothing and accessories manufacturing, with little participation in the overall investments (only 0.4%). It also has the smallest indicators of productivity (R$ 12 thousand), of average salary (R$ 448) and of average income by company (R$ 664 thousand), despite being the number one subsector in terms of percentage of companies (14.3%) and the number two in terms of employed persons (7.6%).

139 thousand companies included in the survey

PIA Enterprise represents 139 thousand companies and 5.9 million workers. Together, they were responsible for a cost of industrial transformation (value of production minus costs of production) of R$ 403.7 billion. The sample for the survey includes all the industrial companies with 30 or more employed persons. Other companies are randomly selected and the sample, in this case, is of about 42 thousand companies.

The total amount the Brazilian industry paid as salaries in 2003 reached R$ 82.7 billion. The average monthly wage per worker was R$ 1.072 or 4.7 minimum wages. The earnings of industrial companies reached R$ 982 billion, and the investments were R$ 61.4 billion, but the contribution of companies with 500 workers and those with over that number was 64.1% and 74.8% respectively.