Only 10% of Brazilian companies use public funding for research

Survey included 196 companies with over 50 employees

Published on 09/03/2022 - 11:10 By Bruno Bocchini - Repórter da Agência Brasil - São Paulo

A survey carried out by the National Confederation of Industry (CNI) among 196 companies with over 50 employees shows that only 10 percent of them used credit lines offered by financial institutions or public bodies in 2020 to invest in research and development.

According to the survey carried out from October 4, 2021, to February 4, 2022, and released on Wednesday (Mar. 9), 89 percent of the companies interviewed have used their own resources to invest in the sector, and 3 percent said they have obtained funding from private financial institutions.

The main public program to support research and development used by companies was Law number 11.196/05, mentioned by 41 percent of those benefiting from public funding. The law offers tax incentives to legal entities that carry out research, development, and technological innovation.

According to CNI chairman Robson Braga de Andrade, the results regarding the sources of financing confirm a reality that has been observed for years in Brazil: the country does not prioritize science, technology, and innovation, and business innovation is carried out with low public support.

“We do exactly the opposite of developed countries. They recognize the role of the State in fostering innovation, science, and technology. Brazil urgently needs a long-term innovation strategy,” Andrade stated.

According to CNI, the most recent national survey revealed that Brazil invested 1.21 percent of its Gross Domestic Product (GDP) in research and development in 2019, including public and private resources, against 1.17 percent in the previous year. By way of comparison, the Chinese investments in this sector corresponded to 2.23 percent of its GDP in 2019.

Most companies realize the importance of investing in research and development and allocate resources to innovative products and processes: 65 percent of them invested in the area in 2020. On average, they have invested 2 percent of net sales revenue which have been allocated mainly to personnel development (56.9 percent), the survey reads.

The CNI survey also shows that just over half of the companies (51.1 percent) practice open innovation that is they form partnerships with other companies, institutions, universities, or startup companies to develop research and development processes.

When asked about the main reasons for not investing in research and development, the companies which did not carry out activities in this area mentioned several reasons, such as very high implementation costs (22 percent), the existence of other strategies relevant to competitiveness (22 percent), lack of qualified personnel in the company (20 percent), lack of adequate funding lines (20 percent) and lack of knowledge about project partners (19 percent).

Translation: Mário Nunes -  Edition: Graça Adjuto

Latest news