Research and Innovation in Brazil: Support and Funding

The CNPq is the country’s longest-standing agency fomenting science. It is an instrument for research funding of the Ministry of Science, Technology, Innovation and Communication (MCTIC) and its main assignments are to foster scientific and technological research and to give incentive to the formation of Brazilian researchers. Founded in 1951, its primary role is formulating and conducting science, technology, and innovation policies. Its actions contribute to national development and to the recognition of Brazilian research and researchers by the international scientific community. One of the main areas of competence of the agency is to promote and foster technological innovation. It also grants study scholarships for the formation of human resources in the field of scientific and technological research in universities, research institutes, and technological and professional formation centers, in Brazil and abroad.

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The main objective of Capes is to expand and consolidate graduate and post-graduate studies – stricto sensu (Master’s and Ph.D.) in all of the Nation’s States. The foundation’s activities include study and research scholarships in Brazilian and foreign institutions; evaluation of post-graduate programs; access to and presentation of scientific production, and promotion of international scientific cooperation. The partnerships with other countries occur through bilateral agreements, programs that foment joint research projects by Brazilian and foreign groups. Besides the foreign study scholarships, Capes offers financial incentives for projects in Brazil. The areas that have the biggest number of post-graduate programs in the country are agrarian sciences, administration and accounting sciences, biodiversity, dentistry, engineering, and education and instruction. Capes also fosters the initial and continued formation of professors for basic education, in classroom and distance formats. The institution is a foundation of the Ministry of Education (MEC).

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The foundation programs induce and foster scientific and technological research and innovation for the development of each State, as well as promoting the exchange and dissemination of science and technology.
The main foundation is the São Paulo Research Foundation (Fapesp), which has an annual budget equivalent to 1% of the State’s total tax revenue.
Two other important fomenting agencies are the Rio de Janeiro Research Foundation (Faperj)  and the Minas Gerais Research Foundation (Fapemig).

The FAPs are associated with the National Council of State Research Foundations (Confap), whose objective is to better coordinate the interests of the State agencies for fostering research. Out of the 27 Federal units of Brazil, only the State of Roraima does not have a State research foundation, that is, a FAP. Representatives of the institutions in the State of Roraima continue to discuss the proposal for creating a Roraima Research Foundation (FAP-RR).

Finep promotes the development of the country through publically fomenting science, technology, and innovation in companies, universities, technology institutes and other public or private institutions. This is a public company linked to the Ministry of Science, Technology, Innovation and Communication (MCTIC). With its involvement in formulating and inducing Brazil’s technological environment, the company has established itself as the primary link in the country’s innovation network.

Furthermore, in order to verify the capillarity of its activities and presence throughout Brazil, the company has also developed decentralized programs in conjunction with regional development banks and state research foundations. The support comes via economic subsidies or through credit at attractive interest and financial rates.

According to the FINEP website, 15 sectoral funds are currently active, thirteen of which are intended specifically for health, biotechnology, agribusiness, petroleum, energy, minerals, aeronautics, space, transport (land and waterway), water resources, and information technology, and one that focuses on the Legal Amazon. The others are transversal in nature, which means that the resources can be applied to projects in any sector of the economy. These are the Green-Yellow Fund, focusing on university-company interaction and the Infrastructure Fund, for supporting and improving the infrastructure of the technological institutions and Companies (ICT).

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The BNDES is the country’s main instrument for long-term financing of investments in all segments of the economy. The bank has innovation, local and regional development, and socioenvironmental development as its most important aspects for economic stimulus. The bank offers special conditions to micro, small and medium-sized companies. One of the lines of investment of the BNDES focuses on innovation, for increasing the competitiveness of Brazilian business through investments in continuous, or structured, actions for innovation in products and processes.

Through its Technical-Scientific Development Fund (FUNTEC), the bank finances applied research, technological development, and innovation projects. According to BNDES policies, financial support for Research and Development projects at the Institutes of Technology in partnership with companies is intended to bring academic knowledge to the market, thus stimulating technological development and innovation, which is of strategic interest to the country.

However, the planning and operation of the BNDES’s FUNTEC must comply with the following guidelines, according to the bank’s website:

1. accelerate the search for solutions to bottlenecks, as well as technological opportunities for the country’s sustainable development;
2. concentrate efforts and resources on specific themes, with a well-defined focus, in which Brazilian companies may come to assume a prominent or even leadership role at the global level, while avoiding spreading resources too thinly;
3. ensure the continuity of efforts made in the selected areas, for the purpose of accelerating the achievement of research results and of combining the efforts of Research Institutes and companies, through the use of the BNDES’s capacity to gather and integrate partners;
4. support projects that contain mechanisms providing for the effective introduction of innovations to the market;
5. foster closer ties between technological institutions and companies, while promoting the application of academia-generated knowledge to the productive sector; and
6. encourage the structuring of projects that combine different support instruments (other products, financing lines, and programs provided for in the BNDES’s Operational Policies) with the resources of the BNDES’s FUNTEC.

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The Inova Talent Program seeks to increase the number of qualified innovation professionals active in Brazil’s business sector. This is an initiative of the National Industry Confederation (CNI), developed for the purpose of encouraging industry to maintain its competitiveness. The program selects and trains students – undergraduate, recent graduates, and Master’s – to work with innovation activities in companies and private research and development institutes.

To join the program, companies must present an innovation project in which the selected professional will make a relevant contribution. Participants in the program have an opportunity to experience the business environment and receive training for the development of behavioral, managerial, and technical competence.

The Inova Talent Program partners with CNPq, which makes scholarships available for the best innovation projects presented.

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Brazil has a number of Federal and State laws that give incentive to the development of science, technology, and innovation throughout the country. Many of them are derived from the Innovation Law, of 2004, which created incentive measures for research and innovation in the productive sphere, to stimulate Brazil’s technological autonomy and industrial development.

The Information Technology Law, of 2004, requires fulfilling a minimum number of operations to be carried out in the country and the investment of companies in research and development. That Law also created extra incentives for the North, Northeast, and Mid-West regions.

Generally speaking, State and Federal laws in Brazil authorize the sharing of ICT laboratories by incubated and national companies. These Laws also facilitate the granting of patents and the transfer of technologies developed by ICTs. Currently, 16 Brazilian States have laws for fiscal incentives and for giving incentive to innovation.

In February 2018, the Federal government regulated the Legal Framework for Science, Technology and Innovation (Law No. 13.423/2016), for the purpose of simplifying the paperwork for research and innovation activities in the country. With that piece of legislation, the government expects to see an increase in private funding for research.

The recent National Innovation Strategy also provides new incentive mechanisms for private enterprise to invest in Research and Development in Brazil.