Science and Technology policy in Brazil: A new policy for a global world

Simon Schwartzman, general coordination; Eduardo Krieger, biological sciences; Fernando Galembeck, physical sciences and engineering; Eduardo Augusto Guimarães, technology and industry; Carlos Osmar Bertero, Institutional analysis

São Paulo, November, 1993

2. Background

a. The beginning: S&T development in a period of economic expansion

Some of Brazil's scientific institutions date from the late 19th century, and the National Research Council from the early 1950's. The larger part of the current S&T capability, however, was built during the 1968-1980 years, in a period of military rule (Schwartzman, 1991). Three factors contributed to this rapid expansion. The concern of some military and civilian authorities with the need to build up the country's S&T competence, as part of a broader project of national growth and self-sufficiency; the support this policy received from the scientific community, in spite of earlier (and often continuing) conflicts between scientists and academics and the government; and the economic expansion of the period, in which Brazil's economy grew at an annual rate of 7 to 10 percent. Another important element was the improvement of the government's ability to carry out policies in those years, through the establishment of small, independent agencies outside the federal bureaucracy, and an expanding fiscal basis.

The policies of the last 25 years should be seen in terms of the changes in Brazilian society and economy in the previous decades. Between 1950 and 1980 Brazil turned from an agrarian into a highly urbanized society, but with high levels of social and economic inequality between regions and social groups. Employment in the primary sector went from 59.9% of the active population to 29.9% in those 30 years, while industrial employment went from 14.2% to 24.4%; the service sector, meanwhile, went from 25.9% to 45.7% (Faria, 1986). The industrial sector developed under the protection of tariff and non tariff barriers that shielded national, multinational and state-owned companies in the Brazilian territory from international competition. By 1970, the Brazilian industry supplied most of the demand for manufactured goods in the internal market, depending only on the import of sophisticated machine tools, chemicals, oil and electronics. A Strategic Program for Development, set by the Military government in 1968, sought to overcome these limitations. The country should build its own basic industry, develop its own sources of energy, and absorb the latest advances in science and technology. Starting with the Second National Development Plan, public corporations were created or expanded, subsidies were provided for the private sector, and barriers were raised against foreign competition, to protect the country's infant industries. Science and technology were perceived as a central ingredient in this strategy, and received unprecedented support.

This ambitious project of scientific, technological and industrial self-sufficiency, however, did not receive more than scattered support in the productive sector, and remained for the most part restricted to special segments of the state bureaucracy and the academic community. For most firms, including the large, state-owned corporations, the origin of technologies used in their activities was less important than their cost and reliability. Restrictions to the entrance of foreign technology and capital - as it happened with the computer sector in the eighties were perceived as a hindrance and a burden. This difficulty was accentuated because there was no understanding of the effective mechanisms and policies leading to technological innovation in the productive sector. The need to strengthen the country's basic technological infrastructure metrology, normalization, quality control and certification received only secondary attention, at least until the late seventies.

b. Main initiatives

The main initiatives of this period were the following:
• The university reform of 1968, with the partial adoption of the American system of graduate education and the reorganization of the universities in terms of institutes, departments and the credit system;
• The placement of science and technology under the responsibility of the economic policy;
• authorities, which allowed for a much higher influx of resources to S&T than ever before;
• The creation of a new Federal agency for S&T under the Ministry of Planning, the Financing Agency for Studies and Projects, FINEP, unencumbered by civil service routines and restrictions, and responsible for the administration of several hundred million dollars a year for science and technology support (Guimarães, R., 1993);
• The establishment of a few large-scale centers for R&D, like the Coordination for Graduate Programs in Engineering of the Federal University in Rio de Janeiro (COPPE) and the University of Campinas, geared toward technological research and graduate education in engineering and sciences;
• The beginning of several programs of military research, such as the space program and the "parallel" nuclear program;
• The agreement with Germany for cooperation in nuclear energy, which was to create an autonomous capability in the construction of nuclear reactors based on locally reprocessed fuel;
• The establishment of a policy of protected market for the computer industry, telecommunications and microelectronics, linked to an emerging national private sector
• The formulation, by the Federal Government, of successive National Plans for Scientific and Technological Development;
• The establishment of centers for technological research under the main state-owned corporations, which sought to keep up with the technological frontier, develop standards and transfer technology to their main suppliers;
• The strengthening and expansion of EMBRAPA, the Brazilian Corporation of Agricultural Research;
• The consolidation of peer review procedures in some of the main public agencies for science, technology and graduate education: CNPq, CAPES and the São Paulo Foundation for Research Support (FAPESP). The main federal agency for science and technology development in the seventies and eighties, however, FINEP, never introduced systematic peer review procedures although it works routinely with external consultants. Larger decisions of resource allocation in CNPq also remained usually outside peer review.

c. Crisis in the eighties and nineties

It is possible to point to several weaknesses in an otherwise successful policy of scientific growth. Links between S&T and the productive sector remained weak, lacking demands for advanced technology, in an economic environment characterized by protectionism and reliance on cheap labor and natural resources. The only significant exceptions occurred in the modern, export oriented sector of agriculture, which benefitted from research on the introduction of new varieties, the control of plagues, and the biological fixation of nitrogen, with very significant gains in productivity (Malavolta, 1986); in sectors associated with the large state corporations, such as telecommunications, energy, and the chemical industry; in the production of military equipment; and in the computer industry, with the attempt to link research with a protected industry of small computers for the internal market (Lucena, 1993; Tigre, 1993). In the universities, the new research and graduate programs remained often isolated from undergraduate education and teacher training. The quality of the scientific institutions created and expanded in the seventies was often not very high, and peer review procedures for quality control not always prevailed.

After 1980, the science and technology sector entered a period of great instability and uncertainty, characterized by institutional turmoil, bureaucratization, and budgetary uncertainty. The evolution of national expenditures for Science and Technology in the eighties, as illustrated on table 1, followed two parables. It grew in the first years of the decade, fell in 1983 and 1984, increased again with the short-lived economic expansion of the Cruzado Plan in 1985 and 1986, and fell rapidly when inflation picked up again in 1988, reaching its lowest levels in 1991 and 1992 (Brisolla, 1993). In 1985, the National Fund for Scientific and Technological Development administrated by FINEP was just one fourth of its 1979 value. This instability and uncertainty were related to economic stagnation, but also to an expanding arena of conflicting interests striving for public funds, and to an increase in political patronage (Botelho, 1990 and 1992) (box 2). The S&T sector became one among many interest groups pressing for more resources, sometimes with partial success, but losing ground on the long run. The same pattern took place in most public universities, particularly in the federal system. The growing unionization of academic and administrative personnel allowed for significant gains in salaries, employment benefits, and participation in the universities' management, but stifled the institutions' ability to improve quality and make better use of their resources.

The World Bank supported Program for Scientific and Technological Development (PADCT I, 1985, followed by PADCT II in 1990) was conceived in the early eighties, when the full dimension of the crisis was still to unfold. The program was supposed to improve the decision making capabilities of government and to strengthen R&D in biotechnology, chemistry and chemical engineering, earth sciences and mineral technology, instrumentation, physical environment and science education. In practice, instead of building upon a basis of existing resources, PADCT became often the only source of public support for the fields included in its priorities. Instead of improving the country's management and decision-making capabilities, it may have had the opposite effect, by creating an additional bureaucratic layer upon the existing institutions (Stemmer, 1993). Contrary to some claims, PADCT did not introduce peer review in Brazil, which had existed since the fifties. However, it may have strengthened it, since its projects were significantly more substantial and were submitted to more detailed analysis and discussion than those of CNPq.    

Box 2: What Global Figures do not Show (Botelho, 1990 and 1992) 

In the early nineties, there was a trend to make science and technology more directly relevant to industrial competitiveness, in a new international context characterized by increased market competition and the growing relevance of science based industries (Guimarães, E., 1992). A few features of this trend can be listed:
• The gradual extinction of market protection for computers, telecommunications, microelectronics and supplying industries;
• The transformation of FINEP into an agency dealing almost exclusively with the financing of industrial technology, and the gradual reduction of the National Fund for Scientific and Technological Development (FNDCT), its main instrument for supporting academic and basic research;
• The increasing support and stimulus for the creation of "technological parks" near the main universities;
• The freezing, or reduction of large governmental R&D projects, such as the nuclear and the military aircraft programs;
• The establishment of a few governmental programs to stimulate quality and competitiveness in industry.
• The increasing concern with university managerial autonomy and accountability, and transparent rules for public financing to the sector.

Box 3: Cooperation and Partnership between university and industry (Maria Helena M. Castro, forthcoming) 

Given the persistence of economic stagnation and political uncertainty in the early nineties, this new trend could not get fully established and show its effects. The reduction of FNDCT deprived many research institutions from institutional support and the ability to work properly and retain their best people. The universities suffered from budget limitations, increasing salary costs and the absence of incentives for performance and efficiency (Schwartzman, J., 1993). On the positive side, the state universities in São Paulo were granted a fixed percentage of the state's tax basis for their financing, and increased autonomy to manage their resources. In some places, like at the School of Engineering at the Federal University of Santa Catarina (box 3), the situation led to new experiences of cooperation and partnership among university departments, local and foreign governments, private firms and donors, for research and development and for the creation of new high technology firms ("incubators") (Castro, M. H., forthcoming).