References

Sadia is one of the world’s leading producers of chilled and frozen foods. Established in Brazil in 194...
Cyrela Brazil Realty is the largest residential real estate developer in Brazil. Considered one of the m...
Today, Banco do Brasil is the largest financial institution in the Country with 24.4 million clients and ...
CPFL Energia is a holding company in Brazilian electricity sector, operating through its subsidiaries in ...
Copersucar S.A. is the largest Brazilian sugar, ethanol and bioenergy company and a significant player in...

Research and Development Industry

Brazil’s government is keen on transforming the country’s ability to use science and technology for development of the economy.  Despite problems with Brazil’s education system and unbearable social disparities, there is a lot of young talent interested in studying science in universities.

The number of PhDs granted in a year has grown to more than 6,000. Brazil is a country where individual states play a bigger role than the federal government in development of a region. Sao Paulo has a strategic approach towards science and technology and is committed to its science university and science funding. The support and encouragement includes creation of an environment that favors launch of high tech companies, support for research centers and attracting foreign industrial investment.  These units will not only foster commercial spinoffs but also deliver supreme quality science.

Brazil provides several incentives to investors in the Research and Development sector such as:

 

  • Instantaneous depreciation for R&D investment. The depreciation rate can be 100%
  • Government provides tax incentives for R&D investment for all sectors. The income tax deduction can be up to 200% of R&D investments
  • Grants
  • Equity investments (venture capital funds and seed capital)
  • Innovation law facilitates partnership between research institutes and private enterprises

 

The different categories of investment in Research and Development are:

  • Firms involved in Innovation and differentiating products
  • Firms involved in specialization of Standard products

 

The innovation policy of Brazil clearly states the importance and need for development through innovation. Currently, over 70,000 PhDs are actively working in Brazil. The government has a national strategy in place for innovation and development. The Government has identified the need for better structure, and a national council has been set up with representatives from important ministries of science and technology. 

Many multinationals have made major investments in the Research and Development sector in Brazil. Motorola has plans to invest an estimated US$9 million in research and development operations of Brazil. Motorola intends to locate 350 engineers to this new site in the coastal city of Recife. The R&D unit will create platforms to develop software used in mobile phones. The software developed here will available to all Motorola units worldwide.

German equipment manufacturer Siemens is expected to invest more than US$110 million into research and development of mobile phones in Brazil.  Siemens already has a manufacturing unit in Brazil, which has produced handsets since 2000. This investment is a type of funding which will be provided over next five years. The unit  has already started production of new cordless products and expects to produce local wireless modules.

The Research and Development sector in Brazil is getting stronger with passing years. Brazil scientific literature output is already on par with EU countries such as Switzerland, Sweden, Holland and Russia.  Brazil has taken concrete steps to improve co-operation between universities and industry. This step encourages setting of R&D industry, as 27% of patents in Brazil are owned by public universities.

The return of R&D in agriculture is also high in Brazil. The farmers in Brazil have successfully increased their output by absorbing new technology and inputs from the R&D sector. There are many opportunities for investors to invest in different areas in agriculture such as the agro-chemical industry, agricultural machinery and transport equipment.