Bridging the gap between Bridging the gap between academia and industryacademia and industry

Brazil’s roadmap

Alberto Rodriguez, Ph.D.

The World Bank

Knowledge Economy Forum

Ancona, Italy

June, 2008

Real GDP: Forecast to 2015Real GDP: Forecast to 2015Real GDP: Forecasts 2004-2015 (On the basis of average growth rates 1991-2003)

0

2

4

6

8

10

12

14

16

2003 2005 2007 2009 2011 2013 2015

US$ trillion1995

India China Brazil

Canada France Germany

Italy Japan Mexico

Russian Federation UK USA

India

China

USA

Japan

Germany

UK

France

Italy

Canada

Mexico

Russian

Federation

Brazil

Knowledge and GrowthKnowledge and GrowthGDP/per capita growth : Brazil vs South GDP/per capita growth : Brazil vs South

KoreaKorea

0

2000

4000

6000

8000

10000

12000

1960 1965 1970 1975 1980 1985 1990 1995 2000

GD

P p

er c

apat

a 20

00 U

S$)

South Korea

BrazilDifferent result

due to growth of labor and capital in Korea

Different resultdue to growth of TFP or to accumulation of knowledge in Korea

The knowledge revolutionThe knowledge revolution

• The capacity to create, access and use knowledge is a basic determinant of global competitivity

• The main elements of the Knowledge Revolution include:

– Greater codification of knowledge and the development of new technologies

– Closer links with science, faster rates of innovation and shorter product lives

– Greater importance given to education, to the specialization of the labor force and to adult education and training

– More dynamic transfer of technology (international licensing flows)

– More investments in abstract elements (R & D, education, software) –surpassing fixed capital investments in the OECD countries

– Constant changes in the types of qualifications demanded for the employment market.

Changes in the qualifications demanded Changes in the qualifications demanded by the employment marketby the employment market

USA: 1960–98USA: 1960–98

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

1969 1974 1979 1984 1989 1994 1998Per

cen

tag

e ch

ang

e

Specialist thinking

Complex communication

Manual routine

Cognitive routine Cognitiva

Non-routine manual labor

Source: Autor, Levy and Murnane (2003) “The Skill Content of Recent Technological Change: An Empirical Exploration,” Quarterly Journal of Economics.

Defining innovation….Defining innovation….

• Three kinds of innovation are presented here:

– Creation of knowledge and technology– Acquiring and adapting the technology that

exists at global level– Spreading and making more widely

available the technology that already exists in the country.

Innovation: creating knowledge and technologyBrazil (a) possesses a large number of researchers in comparison with its

investment in R & D and (b) devotes a high level of public expenditure on R & D compared with its per capita income levels (well above those

of other Latin American and Caribbean countries).

Colombia

Venezuela, RB

Malaysia

Brazil

Turkey

Trinidad and Tobago

Chile

China

ArgentinaRomania

Italy

Hong Kong, ChinaBulgaria

Czech Republic

PolandHungary

Croatia

Portugal

Ukraine

Spain

Belarus

Georgia

Ireland

Korea, Rep.

NetherlandsFranceBelgium

Australia

Russian Federation

Canada

Switzerland

LuxembourgSingapore

Finland

-2-1

01

2Ln

rese

arch

ers

in R

&D

per

mill

ion

peop

le

-3 -2 -1 0 1 2Ln R&D expenditures as % GDP

coef = .59336131, se = .09691843, t = 6.12

UkraineChina

Belarus

Bulgaria

Romania

Colombia

Russian Federation

Turkey

Brazil

Malaysia

Venezuela, RB

Poland

Croatia

Hungary

Chile

Czech Republic

Argentina

Trinidad and Tobago

Portugal

Korea, Rep.

SpainItaly

Australia

BelgiumFranceNetherlands

Finland

Canada

Hong Kong, China

Switzerland

Luxembourg

-2-1

01

2Ln

R&

D e

xpen

ditu

res

as %

GD

P

-2 -1 0 1 2Ln GDP per capita

coef = .34479926, se = .11067687, t = 3.12

Source: World Development Indicators. Source: World Development Indicators.

Role of the universities

• To improve the technological productivity of public investment

• To bridge the gap between the university and manufacturing firms through joint ventures research proposals

• To generate extra resources on the basis of consulting contracts which may also increase the overall impact of such resources

• To establish strong internship opportunities for students with industry, especially SMEs.

Innovation: the acquisition and adaptation of technology at global level

• Regardless of the many ways that exist to facilitate the adoption of technology, Brazilian firms continue to employ very little international technological transfer– e.g. involving a low level of imported capital goods.

• Despite the key importance of human resources exchanges at international level (teachers, students, employees), these exchanges have tended to decline.

Exports of goods as a % of world Exports of goods as a % of world exportsexports

© K4D program

Brasil v OECD countries

02468

1012141618

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

Canada

France

Japan

Spain

UK

USA

OECD

Brazil

Brazil v global competitors

0

1

2

3

4

5

6

7

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

China

India

Korea

Mexico

Russia

Indonesia

Brazil

Brazil v regional competitors

0

1

2

3

4

5

6

7

8

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

Argentina

Colombia

Chile

LAC

Brazil

Role of the universities

• To encourage foreign staff to join the teaching corpuses of the universities and to promote exchanges with international academic institutions.

• To introduce a more flexible approach to foreign languages in respect of academic papers.

• To boost the joint participation of teachers and students through attendance at international events concerned with industry, productivity and innovation.

Innovation: Spreading and making more widely available the technology that already

exists in the country.

• Low level of technological adaptation. Moreover, significant contrasts exist between the productivity levels of different firms – even within the same sector.

• Low standard of worker-training makes it difficult to significantly upgrade product quality.

• Technology take-up varies greatly, depending on the size and type of particular firms. R & D tends to favor larger firms and it is obvious that broad measures need to be pursued in order to benefit small and medium-sized enterprises.

Manufacturing productivity of different Manufacturing productivity of different

sectors of Brazilian industrysectors of Brazilian industry (Added value per worker)

Source: Computed from ICS Survey.Note: Highest and lowest 1% of the sample not included

Sector Max / Min Adj Max as % of Max

Adj Max / Mean

Food & Beverage 12,900.07 57.22 9.42 Textile 1,169.01 67.31 5.99 Apparel 79,103.56 31.60 9.14 Leather & Footwear 65,897.30 73.33 4.81 Chemicals 9,879.34 61.91 7.83 Machinery & Equipment 315,929.99 37.98 33.83 Electronics 6,658.67 52.03 10.00 Auto-Parts 689.60 64.88 4.17 Furniture 26,916.31 35.06 7.88 Average 57,682.65 53.48 10.34

Role of the universities

• To boost the creation of “incubators”• To organize and participate in professional

group meetings dedicated to the exchange of technology and the encouragement of joint development between industry (especially SME) and the academic world.

• To establish partnerships in the sphere of basic education in order to improve education management, teacher training, assessment systems and the overall quality of basic education.