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Bridging the gap between academia and industry Brazil’s roadmap Alberto Rodriguez, Ph.D. The World Bank Knowledge Economy Forum Ancona, Italy June, 2008 Real GDP: Forecast to 2015 US$ trillion 1995 Real GDP: Forecasts 2004-2015 (On the basis of average growth rates 1991-2003) 16 14 India China Brazil Canada France Germany Italy Japan Mexico Russian Federation UK USA China USA 12 10 India France 8 Russian Federation UK Italy Brazil Mexico Germany 6 Japan Canada 4 2 0 2003 2005 2007 2009 2011 2013 2015 Knowledge and Growth GDP/per capita growth : Brazil vs South Korea South Korea 12000 GDP per capata 2000 US$) 10000 Different result due to growth of TFP or to accumulation of knowledge in Korea 8000 6000 4000 Brazil Different result 2000 0 1960 due to growth of labor and capital in Korea 1965 1970 1975 1980 1985 1990 1995 2000 The 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 by the employment market USA: 1960–98 16 Specialist thinking 14 12 Percentage change 10 8 Complex communication 6 4 2 Manual routine 0 -2 -4 -6 1969 1974 1979 1984 1989 1994 1998 Cognitive routine Cognitiva Non-routine manual labor -8 -10 Source: Autor, Levy and Murnane (2003) “The Skill Content of Recent Technological Change: An Empirical Exploration,” Quarterly Journal of Economics. 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 technology -1 Venezuela, RB Bulgaria Hong Kong, China Argentina Romania -2 Colombia -2 1 Ukraine Russian Federation China -1 0 Ln R&D expenditures as % GDP 1 Czech Croatia Republic Brazil Switzerland France Belgium Canada Netherlands Luxembourg Australia Spain Italy Hungary Portugal Turkey Poland Bulgaria Malaysia Chile Hong Kong, China Argentina Romania Venezuela, RB Belarus Georgia Colombia Trinidad and Tobago -3 Korea, Rep. -1 Turkey Chile Malaysia Switzerland Korea, Rep. France Belgium Canada Singapore Netherlands Luxembourg Australia Czech Croatia Republic Ukraine Ireland Italy Russian Federation Spain Portugal Hungary Belarus Poland Finland 0 China Finland -2 0 Brazil Ln R&D expenditures as % GDP 1 2 2 Brazil (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). 2 Trinidad and Tobago -2 -1 0 Ln GDP per capita coef = .59336131, se = .09691843, t = 6.12 coef = .34479926, se = .11067687, t = 3.12 Source: World Development Indicators. Source: World Development Indicators. 1 2 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 Brasil v OECD countries Brazil v global competitors 7 Canada France 2002 1999 1996 1993 1990 1987 1984 1981 1978 1975 1972 1969 Brazil Brazil 1966 0 1963 2002 1999 1996 1993 1990 1987 Brazil v regional competitors 8 7 6 5 4 3 Argentina 2 1 0 Brazil Colombia Chile 2002 1999 1996 1993 1990 1987 1984 1981 1978 1975 1972 1969 1966 1963 LAC 1960 1984 1981 1978 1975 Indonesia 1 OECD 1972 Russia 2 USA 1969 Mexico 3 UK 1966 Korea 4 Spain 1963 India 5 Japan 1960 China 6 1960 18 16 14 12 10 8 6 4 2 0 © K4D program 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 sectors of Brazilian industry (Added value per worker) Source: Computed from ICS Survey. Note: Highest and lowest 1% of the sample not included Sector Food & Beverage Textile Apparel Leather & Footwear Chemicals Machinery & Equipment Electronics Auto-Parts Furniture Average Max / Min 12,900.07 1,169.01 79,103.56 65,897.30 9,879.34 315,929.99 6,658.67 689.60 26,916.31 57,682.65 Adj Max as % of Max 57.22 67.31 31.60 73.33 61.91 37.98 52.03 64.88 35.06 53.48 Adj Max / Mean 9.42 5.99 9.14 4.81 7.83 33.83 10.00 4.17 7.88 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.