Country Listing

Brazil Table of Contents


The Computer Industry Policy

The "informatics" policy started in the late 1960s and early 1970s as an effort to develop a Brazilian personal computer (with the USP's Engineering School working on hardware and the PUC-RJ on software, and with support from the navy and the Finep). Technology was to be transferred to a state-owned corporation, Brazilian Computers and Systems (Computadores e Sistemas Brasileiros--Cobra), and to private firms owned by Brazilians. With the development of personal computers, a policy was devised that restricted this new market to Brazilian firms but allowed for the continuous presence of multinational corporations, particularly in the area of mainframe computers. Congress approved the policy in 1985. The central tenet of the legislation was the strict ban, for seven years, on the import of microcomputers and on the establishment of foreign firms producing microcomputers and software. The Computer Technology Center (Fundação Centro Tecnológico para Informática--CTI) was established in 1983 to encourage the development of scientific and technological research in the computer sector. A national office for the computer industry, the Special Secretariat for Informatics (Secretaria Especial de Informática--SEI), was established in Brasília. It had the power to control the import of equipment and components, to set targets for increasing Brazilian participation in joint ventures with foreign firms working in Brazil, and to decide about government purchases of computer equipment.

The policy was conceived not only to limit the small computer market to national firms but also to stimulate the local production of products and components, which was part of a broader policy of import substitution. Both Brazilian and multinational firms were required to increase the share of domestic content in their products. This requirement boosted the development of local competence but also led to higher costs and a loss of competitiveness, given the lack of scale in the local market. This strategy of mandatory high percentages of local components in all items, including disk drives and printers, contrasts with that of South Korea, for example, which concentrated on a few components, such as monitors, where the local industry could compete internationally in terms of quality and price.

To protect the local industry, the government introduced mechanisms to prohibit the transfer of technologies that were similar to ones being developed or that already had been developed by Brazilian companies. This policy was applied to both hardware and software, and Brazilian firms developed emulators of MS-DOS and Unix computer operating systems for the local industry. As a result, companies that could bypass this legislation and get the original software were in a better position than those that remained attached to much less advanced local products.

This protectionist policy was very controversial and drew strong opposition from the United States government and multinational firms, in the name of free trade. It also drew opposition from Brazilian firms and corporations that thought their access to high technology had been curtailed. Supporters argued that the policy generated technological competence in Brazilian firms and created employment for researchers and engineers at little cost to industry or Brazil. Detractors argued that the whole industrial sector suffered from restrictions on access to state-of-the-art electronics and, more generally, that Brazil was delayed in entering the microcomputer culture. In practice, the civilian government under Sarney did not invest in research and development for the computer industry, and a large part of that industry remained limited to the assemblage of microcomputers with imported components. A few firms have specialized in some market niches (such as bank automation) and, after 1992, entered into associations with multinational corporations for the development and distribution of international microcomputer brands in Brazil.

Science for Industrial Competitiveness

The World Bank (see Glossary) approved a US$72 million sector loan in 1985 (with another US$107 million to be provided by the Brazilian government) to increase the country's competence in selected areas of science and technology. The underlying assumption had been that the government would maintain the historical levels of expenditures for the sector as a whole. This expectation was not fulfilled, and the World Bank's program, called the Program in Support of Scientific and Technological Development (Programa de Apoio ao Desenvolvimento Científico e Tecnológico--PADCT), became one of the few sources of support for scientific research, although it did not contribute directly to an improvement in Brazil's industrial competitiveness.

The brief Fernando Collor de Mello presidency (1990-92) called for making science and technology more directly relevant to industrial effectiveness, in an economy that was being deregulated and subjected to international competition. It was also a period of high inflation, economic depression, and political crisis. The main initiatives and proposals, some dating from the previous years, included the continuation of the World Bank sector loan to science and technology; the transformation of Finep into an agency concerned almost exclusively with loans for the development of industrial technology; a sharp reduction in the FNDCT's budget; the end of market protection for the Brazilian computer industry; major reductions in the resources available to the CNPq, which became restricted to the administration of fellowships; proposals to create strong links between universities and the productive sector through "technological parks" and other mechanisms of university-industry cooperation; the closing down, phasing out, or revising of large military projects, such as the Parallel Program and the space program; and the privatization of most publicly owned corporations.

Several measures related to the opening of Brazil's economy were carried out and are still in effect. However, little progress was made in turning the science and technology sector in new directions. Economic depression limited industrial investments, while inflation channeled available resources to the financial markets. The scientific community viewed the Collor government with distrust.

The Itamar Franco government (1992-94), which succeeded Collor de Mello after his impeachment on corruption charges, was unable to overcome the country's runaway inflation until mid-1994 and did not have a chance to devise a science and technology policy. The minister of science and technology, José Israel Vargas, an internationally respected physicist with considerable credibility in Brazil, worked to keep the issues of science and technology high on the government agenda. He sought to pass legislation that would create incentives for technology investments in industry and that would revive Brazil's space program. In addition, he was committed to ensuring the bare minimum of resources for the daily activities of the government's main science and technology agencies. No long-term policy seemed to exist, however.

Data as of April 1997

Country Listing

Brazil Table of Contents