The rate of technological innovation of the Brazilian industry changed from 31.5% to 33.3% between 2001 and 2003. Between 1998 and 2000 there was predominance of innovations already in progress, whereas innovation in both processes and products occurred between 2001 and 2003.

The rate of technological innovation of the Brazilian industry changed from 31.5% to 33.3% between 2001 and 2003. Between 1998 and 2000 there was predominance of innovations already in progress, whereas innovation in both processes and products occurred between 2001 and 2003.

The activities with the highest innovation rates from 2001 to 2003 were: manufacturing of office machines and computer equipment (71.2%), manufacturing of basic electronic equipment (61.7%) and manufacturing of automobiles, trucks, utility cars and buses (57.5%). The innovative aspect (expenses on innovation in relation to the net income from sales) of industry was 2.5%, with only eight of the thirty-two activities surveyed presenting increase of this indicator.

The acquisition of machinery and equipment was the most relevant innovative activity, and the most developed subsectors in technological terms were the ones which more contributed to the innovation process. Whereas product innovation was developed by the companies themselves, process innovation was the under the responsibility of other companies or institutes. In 2003, 5.2 thousand companies received support from the government aiming at their innovation. These are some of the data contained in PINTEC – Industrial Survey of Technological Innovation, performed by IBGE with the support of the Financing Department of Studies and Projects, a department belonging to the Ministry of Science and Technology.

If the microeconomic environment of 2000 stimulated more expensive projects of technological innovation and partnerships to develop products, the negative scenario of 2003 caused the companies to be more careful in their strategy choices: to developed cheaper and less risky projects, and used their own resources in innovative activities, developing product innovation within company range.

The influence of two different economic conjunctures on the decision of adopting innovative policies is seen when the first and the second PINTEC are compared. In 2000, GDP grew by4,.% and industry by 4.8%. These were the highest annual growth rates since the period 1993 - 1994. In 2003, however, industry remained practically stable (0.1%) and the GDP grew only by 0.5%.

Increase of technological innovation aimed at changes in process and products

In 2000, there were 72 thousand industrial companies with 10 or more employed persons; the figure was 84.3 thousand in 2003. On the other hand, the number of companies which altered their products or processes grew from 22.7 to 28 thousand. That caused the innovation rate to increase from 31.5% to 33.3% between 2001 and 2003. From 1998 to 2000, there was a predominance of innovation in processes, whereas from 2001 to 2003, the strategy was to innovate in both process and product.

In the period 2001-2003 the innovation rates were 26.9% for process and 20.3% for product. In the previous survey the rates had been 25.2% and 17.6%, respectively. Although the rate for product was lower, it reached the expected level, especially in the subsector of new company products, which grew by 3.7 percentage points.

These were some results shown by PINTEC 2003. On the other hand, the innovation concerning product and process for the national market fell in companies of almost all types and sizes (table below), possibly influenced by the macroeconomic scenario. It important to observe that the slight change from 31.5% to 33.3% in the industrial innovation rate occurred only in the companies with a number of employed persons ranging from 10 to 49 people. They represented 79.7 % of the sample of PINTEC 2003, and are the ones which usually most influence the national industrial innovation rates¹. Most changes observed are related to the number of employed persons in the company.

Companies with better technology are more innovative

Among the ten highest innovation rates, the difference between the two editions of PINTEC reflects the disaggregation of the subsector of automobiles, vans, utility cars, trucks and buses (57.5%), the six in the ranking, causing the manufacturing of cellulose and other pastes (39.1%) to fall to the eleventh position (Table 2).

Among the 33 subsectors surveyed by PINTEC 2003, 32 belong to the manufacturing industry. Four members of this group are of high technological intensity, seven of medium-high technological intensity, eleven of medium-low technological intensity and the other ten of low technological intensity.

The ten activities which present the highest innovation rates in PINTEC 2003 are those of high and medium-high technological intensity, and, together with the manufacturing of transportation equipment (27.4%), refer to knowledge-based companies.

Below industry average there is predominance of activities of low technological intensity, dynamic in terms of manpower or natural resources. The ones presenting the lowest rates were products made of non-metallic minerals (19.9%) and recycling (13.7%).

Finally, fourteen subsectors had increased innovation rates, three of them belonging to groups of high and medium-high intensity², and most of them belonging to groups of medium-low and low technological intensity.

Purchase of equipment is the most common innovation activity among companies

 PINTEC 2003 showed an increase in the number of companies which consider the purchase of machinery and equipment of high or moderately high importance (from 76.6% in 2000 to 80.3% in 2003). In al the other activities there was decrease, but the same order of importance was maintained.

The highest concentration of information attributes relevance to the acquisition of capital goods, and is in accordance with the growth of innovation rates in smaller companies. That can be observed mainly in traditional subsectors, which tend to acquire technological knowledge through the incorporation of machinery and equipment.

There was a generalized fall of costs with innovation in relation to the net income of companies from 2000 (3.8%) to 2003 (2.5%). The most relevant falls occurred in acquisition of external knowledge (from 0.20% to 0.08%); purchase of machinery and equipment (from 2.00% to 1.22%); industrial project (from 0.57% to 0.35%); and the slightest fall, in-company R&D activities (from 0.64% to 0.53%).

Only eight of the thirty-two activities surveyed had increase of innovative policies

In relation to 2000, most industrial activities faced decrease of innovative policies (Table 2). Eight registered growth, three in the first positions: manufacturing of transportation equipment (from 5.9% to 8.6%); manufacturing of office machinery and computer equipment (from 3.1% to 5.5%) and manufacturing of basic electronic material (from 4.0% to 5.2%). Five remaining activities, with percentages below the industry average (2.5%), are of medium-low or low technological intensity: apparel and accessories (2.3%); leather processing and manufacturing of leather articles, travel articles and footwear (2.1%); production of coke, alcohol and development of nuclear fuels (1.9%); quarrying industry (1.6%) and manufacturing of beverages (1.3%).

Concerning in-company R&D activities, subsectors which disseminate technical progress or which have high/medium-high technological intensity hold the first six positions in the ranking. They are: manufacturing of transportation equipment (4.1%); manufacturing of automobiles, vans, utility cars, trucks and buses (2.1%); manufacturing of office machinery and computer equipment (1.9%); manufacturing of appliances and communication equipment (1.3%); manufacturing of medical equipment, high-precision and optical instruments, equipment for industrial automation, chronometers and watches (1.2%) and manufacturing of machinery and equipment (0.7%), confirming the importance of R&D to competitiveness. In relation to 2000, only six subsectors expanded their proportion of expenses with in-company R&D activities, being the three activities aforementioned the main highlights³. The number of companies investing in R&D changed from 7.4 thousand in 2000, to 4.9 thousand in 2003.

A bigger number of companies performs continuous R&D activities

In 2000, 42.9% of the companies applying R&D, did it on a continuous basis. In 2003, this percentage changed to 49.2%. It is important to notice that this phenomenon occurred in companies of all sizes, increasing the proportion to 34.2% and 84.9% in smaller and bigger companies, respectively. Consequently, the occasional expenses with R&D, which were already few in 2000 (10,0%), now represent 6.3% of the overall expenditure of industry with this activity, falling to about 1% in companies with 500 or more employed persons.

The reduction of occasional R&D activities had important effects on the data related to human resources involved in this activity, analyzed either by the period of dedication to the activity or by the level of qualification.

In 2000, about 31.4 thousand people dedicated full-time to R&D activities. In 2003, the number of people in this situation grew slightly, to 32.6 thousand, whereas the ones with part-time dedication fell to 19.4 thousand. This resulted in a new scenario in 2003, when people with full-time dedication to R&D activities became the majority in industrial companies, as well as in companies with 100 or more employees.

There was increase of the participation of post-graduates (from 7.1% in 2000, to 8.1% in 2003) and especially of graduates (from 41.4% in 2000, to 48.5% in 2003) with full-time dedication⁴ in the overall number of persons employed in R&D. Among the 41.5 thousand persons employed in R&D, in 2000, about 20 thousand had higher-education. In 2003, these two groups amounted to 21.8 thousand, out of 38.5 with full-time dedication.

Product innovation is conducted by the companies alone. Process Innovation usually depends on external help

The involvement of companies with the development of innovation changes according to the kind of innovation – product or process. In 2000, PINTEC showed that, in 71.4% of cases, the company itself was the main responsible for product innovation. Regarding process, 83.3% of cases counted on the participation of other enterprises or institutes.

Em 2003, the participation of the company in product innovation changed to 90.4%. As for process innovation, the highlight is the participation of other companies or institutes: 91.6%. As a consequence, the participation of the company itself as the main responsible for process innovation fell from 10.6% to 6.3%.

The Internet as relevant source of information

Innovation starts from an idea of the company itself or with the help from an external source. These sources are varied and their choice depends the strategy chosen and on the capacity of companies to absorb such information. Similarly to what happened in 2000, the most used sources in 2003 were related to internal company areas (62.7%), suppliers (59.1%), fair and exhibitions (58.4%) and clients or competitors (53,4%). Thus, it can be concluded that companies value, besides their own experience, the knowledge obtained from their commercial relationships. Another company from the same group (5.1%) and acquisition of licenses, patents and know-how (2.9%) remained as the least used resources.

Still in relation to 2000, PINTEC 2003 points to a significant increase of the use of other two sources of information: consulting companies (from 10.8% to 13.1%) and the Internet (from 33.1% to 46.0%), being the latter an important tool, used by at least half of the innovative enterprises.

Improvement of product quality as the main result

The impact of implemented innovation may reflect future gains in competitiveness and, consequently, profits. The results of innovation may be varied in number and intensity. In 2000, more than 79% of the enterprises admitted to keeping innovation in order to continue (79.6%) or to increase their participation (71.0%) in the market, or even to improve product quality (78.3%). In 2003, the impact mentioned by companies was the improvement of product quality (63.5%), followed by maintenance (61.0%) and expansion of the participation of companies in the market(53.0%); increase of productive capacity (52.9%) and production flexibility (43.3%).

Innovation reflected on company revenue

Another indicator of the impact of innovation is the participation of new or improved products in company revenue. In 21.2% of the companies, product innovation represented up to 10% of revenue. In 40.4%, the new product represented between 10% and 40% of revenue. In 38.4%, it is over 40%. In 43.5% of small enterprises (with 10 to 49 employed persons), the new products represented a bigger participation in the revenue, whereas in 16.7% of the bigger companies (with more than 250 employed persons) innovation corresponded to more than 40% of profits. In 2000, in 21.2% of the industrial companies, product innovation represented up to 10%; in 48.9%, between 10 and 40%; and in 29.9%, it was more than 40%. The comparison between two periods indicates that there were product-updating policies, especially in smaller companies.

Em 2003, mais de cinco mil empresas recebiam apoio do governo para inovar

In 2003, 5.233 companies received support from the government to invest in innovation. In relation to 2000, the supply of financial support increased from 16.9% to 18.7%, under the form of financing, fiscal incentives, endowment, scholarships, help with risky capital, etc. This percentage increases with the size of the company: 17.8% among those which employ between 10 and 99 persons received support from the government; 20.5% between 100 and 499 employees; 34.0% f those with 500 or more employees.

The type of program that the innovative companies most used was the financing of machinery and equipment (14.1%), but in most small companies this percentage reached 13.4% and, in the bigger ones, 24.5%. The second most used type of support was other support programs (4.1%), followed by financing or research programs (1.4%) and by two kinds of fiscal incentives: computer science regulation (0.9%) and Research and Development (0.7%).

Brand registration is the form of protection most used by companies

In order to guarantee the ownership of the results of implemented innovation and to prevent plagiarism, innovative companies make use of security methods. The results of PINTEC 2003 show that the most used one in the market is brand registration (21.8%), once it establishes the differences between products and assures they are in accordance with the specific regulation. In smaller companies, the use of brand registration reaches 21.5%, and in the bigger ones, 41.7%. The second most used type of security method is industrial secrecy (8.3%), which includes from secrecy agreements between suppliers and clients, to control of innovation procedures by the company-owner himself. The third method is patenting (7.4%), which can refer to inventions, utility models and product lay-out.

Financial difficulties are the ones which most often prevent innovation

Of the 28 thousand companies which invested in innovation in 2003, 45.4% claimed to have faced difficulties which delayed some innovation processes or even made them impossible. In 2000, this same percentage was 54.7%.

The three most common problems were financial: high innovation costs (79.7%), excessive financial risks (74.5%) and scarcity of financing sources (56.6%). Other difficulties mentioned were related to in-company problems, and reflected technical or information difficulties: lack of qualified staff (47.5%); lack of information about technology (35.8%); difficulties to conform to patterns (32.6%); and lack of knowledge about the market (30.5%). In relation to 2000, the order of the problems mentioned was the same, except for the difficulty to conform to patterns, which went from the tenth to the sixth position.

Similarly to what happened in 2000, most (65.4%) of the 53.9 thousand companies which did not innovate in 2003 presented as the main reason market conditions, causing the interruption of investments in innovation. Other 11.1% declared that had recently implemented innovation. Among the other companies (23.5%), innovation was prevented by other factors, such as high costs (88.5%), financial risks (81.6%) and the lack of appropriate financing sources (60.1%).

________________________________

[1] In PINTEC 2000, 78.6% of companies was in this group of employed persons. Based on the results of researches about innovation, comparative studies of different countries show the profile by company size and the structure by sector as the main factors influencing the rate and the pattern of innovation in the industries of each country.

[2] They are: manufacturing of office machines and computer equipment; manufacturing of pharmaceutical products; manufacturing and assembling of automotive vehicles, tolls and trunks, except pieces and accessories, with innovation rates of 26.3% in the period 1998-2000 and of 33.7% in the period 2001-2003.

[3] To compare with 2000, the activity of manufacturing and assembling of automotive vehicles, tools and trunks, except pieces and accessories, with rates of 1.0% in the period 1998-2000 and of 2.0% in the period 2001-2003.

[4] The number of persons dedicating full-time is obtained by adding the number of persons dedicating full-time to the number of persons dedicating part-time, using the average percentage of dedication in the calculation.