Accelerating Innovation in Brazil
As a Dutch innovation consultant based in Brazil, I see the growing interest from outside for this country, especially when in it comes to the business opportunities in a fast growing economy. At the same time, Brazil is making a fast leap forward in another field: that of innovation.
Brazil has been known as commodity exporting country, with iron ore, soy beans and meat leading the way. There are some exceptions to the rule, such as Havaianas, which impressively shows how to sell slippers that cost only a few dollars here in Brazil – and seem to be nothing more than a commodity – for the multiple value in Europe and North America! Another highly successful company is MarcoPolo, which sells and exports buses with high market shares all over the world. But for the time being these are exceptions. Brasil seems to be lagging behind in innovation.
Brazilians have always been creative – necessary in a country where not everything works the way it should be and with enormous bureaucratic hurdles to be taken. But as we know, creativity does not mean innovation, and especially not radical innovation. To succeed in innovation one needs processes, resources, culture and the market pressure that requires you to do so. And up to some time ago, Brazil had not been doing that well in those aspects. Some time ago the country’s economy was closed and companies had little incentive to compete on innovation in their products. Scale was much more important in a country with 180 million inhabitants and also, for a company to choose between investing in innovation and profiting from inflation when inflation and interest rates were skyrocketing, innovation was made a secondary choice. Only a few companies, line the oil giant Petrobras, some banks and pioneers like Natura and Embraco were outliers.
But slowly, this has been changing. The Brazilian government and its agencies have been keen on finding ways to stimulate innovation via tax incentives and low interest rate loans for investments in innovation. Some companies, especially the large Brazilian companies and multinationals, have taken advantage of the opportunities. Investment in R&D has slowly risen over the last decade, and although low in comparison with other reference countries, the step is forward. Local governments are also heavenly participating in setting up technology parks in various parts of the country.
Also, Brazilian companies are moving to a more structured approach towards innovation, through the implementation of innovation processes and connecting their innovation efforts to corporate strategy. And it shows. A very neat example of this new innovative drive is the Mio, the new concept car from Fiat, a creative commons project, which received hundreds of contributions from people over the web.
The Brazilian creative sense, its quick adoption of new technologies (when affordable) now combined with organization and resources is bringing innovation in Brazil to international standards. And this will not only be discomforting competition here in Brazil…
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Caspar van Rijnbach is a specialist in innovation management and partner at TerraForum Consulting in Brazil – www.terraforum.com.br and www.terraforum.ca. Co-author of “Innovation: Breaking Paradigms” and “Management 2.0’’ (in Portuguese).
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Very interesting perspective, Caspar. Brazil is relatively new on my innovation radar screen. I look forward to more expansive dialogue on ths promise of this exciting and dynamic new player.
Thank you for writing this article. It seems that the crowd-sourcing idea is catching up with the BRIC countries too. I believe the focus on innovation is gaining momentum and will contribute to a larger portion of revenue to businesses in the near future.
Dear Mr. van Rijnbach,
I am a writer/editor with Knowledge@Wharton, the business journal of the Wharton School in Philadelphia. I am working on a report on innovation and I would like to interview you for my report after reading your very interesting blog on innovation in Brazil (link below):
I am looking at the drivers of innovation in emerging economies (the BRIC countries) and would like your insights on the opportunities and challenges for companies from developed countries to source more and more value-added innovation from Brazil.
Would you have 10-15 minutes for a phone interview? I’m currently in Bangalore, India, whcih is 7.5 hours ahead of you. I could call you at any time today or tomorrow from morning until 2 p.m.
Looking forward to hearing from you,