Abstract
The Emerging Biobased Economy
The grand environmental, social, and economic challenges of the twenty-first century have created a series of unprecedented threats to the safe development of our society. The steady growth and aging of the world population, the high dependency on non-renewable resources, and the economic impacts of environmental pollution and climate change are some of the current factors that impede the achievement of national and international policy goals, such as economic growth and job creation, improved public health, environmental protection, and sustainable development. In fact, any one of these factors has the potential to wreck the global economy. For this reason, the central questions of the twenty-first century are not whether climate change is a fact, how fast the world population is growing and aging, or to what extent greenhouse gas (GHG) emissions have to be lowered, but how the economy and society will be able to overcome these major concerns and continue to grow without collapsing.
By combining a focus on the economy and ecology in an intelligent fashion, the bioeconomy can make a significant contribution toward solving these challenges, thereby making sustainable economic growth possible. 1 Given that the current economic model is increasingly reaching its limits and can no longer sustain the safe development of our society, the shift toward a biobased economy is not only desirable, but also essential. Within this new biobased model of development, those previous challenges can be seen as key drivers to foster new opportunities for innovation and progress. For this reason, the bioeconomy is a promising concept for the renewal of the economy and a fundamental pillar of innovation policies. 2
Consequently, the potential benefits of a global bioeconomy have been praised by all of the G7 member countries as well as by more than 30 other countries around the world. 3 Numerous nations have already established ambitious national research and policy strategies targeting the bioeconomy, including the US, Germany, Japan, The Netherlands, Denmark, Sweden, Finland, and Iceland. Beyond the G7 and European Union (EU) nations, Malaysia and South Africa have also developed dedicated bioeconomy strategies. 4,5 Italy and Canada have taken a more pragmatic approach by letting industry lead the way, while the UK aims to increase its life sciences competencies as a political strategy for supporting the development of high-value industrial and service sectors. France's approach has been to fund research and development (R&D) in the biobased chemistry and energy sectors and to improve the relevant legal conditions. In addition, several other countries are in the beginning stages of strategic discussions and negotiations. Furthermore, a number of policies have been put in place at the international level to support the development of a biobased economy, especially in Europe with Framework Programme 7 (FP7), Common Agricultural Policy (CAP), Lead Market Initiative (LMI), and Key Emerging Technology (KET). 6,7 In 2012, the EU Commission launched a new bioeconomy strategy 8 ; and the bioeconomy has been given high priority in the new EU Horizon 2020 framework program for research and innovation. Estimates show that just in terms of the EU's investment in bioeconomy research and innovation, each euro to be invested under the proposed Horizon 2020 program for research and innovation could generate 10 euros of added value in the different bioeconomy sectors by 2025. Noteably, the bioeconomy is already one of the EU's biggest and most important sectors, with an annual turnover of more than €2 trillion (USD2.17 trillion) and employing over 22 million people and approximately 9% of the total EU workforce. 9
In such an emerging biobased economy, Brazil has an extraordinary potential to become a global leader. The country possibly has the best environment in the world for the formation of this new standard: with the world's largest biodiversity, abundant non-food biomass as feedstock, plentiful land and natural resources, and appropriate climate conditions. 10 Brazil has also established a first-class knowledge base for the development of science, technologies, and innovation, founded on its very successful experiences in agribusiness and biofuels. This is crucial for the increasing productivity and efficiency of this new economic model for guaranteeing that resources are used in a responsible and sustainable manner.
Such extraordinary potential for industrial biotechnology and the development of the bioeconomy in Brazil was the driving force to launch this special issue of Industrial Biotechnology entitled “Industrial Biotechnology in Brazil: Innovation, Opportunities, and Challenges.” In this Overview, I present the main advantages that make Brazil so special in the biotechnological context, briefly discuss the current challenges and recent advances for the development of the national biobased industry, and introduce the articles featured in the issue.
Major Advantages
Unique Natural Wealth
Brazil is the fifth largest country in the world, with an area of 8.5 million km2, occupying 47% of the continent of South America. It shelters the largest portion of the largest natural reserve on the planet (the Amazon rainforest, with over 4 million km2 in Brazilian territory), the world's richest biodiversity, access to the largest amount of solar energy, and the largest potential for biomass production as a source of renewable energy. It also has underground a myriad of ores. In addition, Brazil has the largest supply of fresh water (55,455 km2) in the world and a marine territory of 3.6 million km2 (with an additional 771,000 km2 recently added). This extensive marine domain, known as the Blue Amazon, is a region rich in natural resources, including 90% of Brazil's petroleum and 77% of Brazil's gas reserves. Such extraordinary natural wealth and variety of resources represent a unique, albeit unexplored, asset in terms of the potential to develop sustainable, biodiverse, and environmentally friendly food, energy, and drug products.
Strong Domestic Market
As the world's fifth most populated country, Brazil has 205 million inhabitants and an economically active population of nearly 110 million people (ranking 6th worldwide). The country is emerging from a decade that saw 40 million of its population join the middle class (earning between $11,500 and $29,000 per year), representing a significant strength for the domestic market. In 2010, this middle class exceeded 100 million, comprising over half of the Brazilian population. This shift can have a strong positive impact on the development of the economy and is a key attractive feature for investors. The power of such a strong domestic market was essential to sustain the economic growth of Brazil, even in the most severe phase of the global financial crisis.
In addition, the public perception of the bioeconomy in Brazil is very positive. Research conducted by the National Industry Confederation in 2014 shows that more than 90% of interviewees had a positive perception of this concept and agreed that Brazil had the potential to become a global leader in the bioeconomy. 10 Still, more than 80% agreed that the country was not seizing the opportunities appropriately. Since public acceptance of newly emerging technologies is of crucial importance to their success, this high level of societal awareness will have a relevant impact on the solid establishment of an emerging biobased economy. The negative consumer attitude toward genetically modified foods in many countries clearly highlights this issue.
Strong Scientific Base
With an academic tradition in the biological sciences dating back to the mid-nineteenth century, Brazil has built a very strong academic base and has clearly established a world presence. Between 1981 and 2008, the number of scientific papers by Brazilian authors published in international journals grew at an annual rate of 11.3%. In 2014, the SJR indicator (which is based on the Scopus database and is comparable with the Impact Factor from Web of Science, but takes into account the prestige of a journal) ranked Brazil in 13th position in terms of indexed articles. Currently, the number of articles published by Brazilian researchers represents 40% of the total scientific publications from Latin America and 2.6% of global output.
Such a strong scientific base is also supported by the increasing number of Brazilian journals covered by international databases. In Brazil, the number of journals indexed in Web of Science and Scopus was relatively small until 2005. Since then, driven by the Scientific Electronic Library Online (SciELO) Program, journals have been gaining visibility and improving in quality. 11 The vast majority (90%) of Brazilian journals indexed in Web of Science and in Scopus databases are also part of the SciELO collection and are issued in open access by learned societies and institutes of research and education. The most important fields of research are health and agricultural sciences, with more than 60% of journal titles published in these two areas.
Leading Position in a Key Sector of the Bioeconomy
The strength of Brazilian agribusiness and the biofuels industry
One of the main drivers of Brazil's twentieth-century development process was its advances in agricultural production and technology. The agribusiness industry–being the main pillar of its economy–represents 23% of the Gross Domestic Product (GDP), 36% of exports, and 13% of the national workforce. 12 Brazil's natural advantages provide the foundation for the astonishing growth of the sector during the last three decades. However, long-term government policies to encourage investment in research and education while providing price and credit incentives, have created a favorable environment for the sector to flourish. Today, Brazil is the world's second largest agricultural producer, behind only the United States. To achieve increases in agricultural production, Brazil relied on a dual strategy of expansion of the area of land under cultivation and research and technological innovation. The Brazilian Enterprise of Agricultural Research (EMBRAPA) produces nearly half of the total grain of the country.
Despite this strength, Brazil can still significantly expand its agricultural production. Only 50 million hectares are used for crop production, of over 400 million ha of total potential arable land, according to the United Nation's Food and Agriculture Organisation (FAO). 12 The country still has one of the lowest planted acres to total area ratios of all major producers. With such potential, Brazil could respond to 40% of the global additional food demand expected by 2050.
Brazil has also used its improved agricultural production to boost its energy security, becoming an international leader in the production of biofuels. The country has the world's first sustainable biofuels economy, establishing a policy model for other nations. Brazil is the world's second-largest producer of ethanol and was the largest exporter until the US surpassed it in 2011. Almost 45% of the country's primary energy demand is met by renewable energy, making Brazil's energy sector one of the least carbon-intensive in the world.
In response to the 1973 oil crisis, in 1975 Brazil initiated what is currently the world's largest biomass-to-energy program, the National Alcohol Programme, commonly known as PROALCOOL, in which the Brazilian government began promoting the production of ethanol from sugarcane. Decades of tradition in the sugar and ethanol industry, based on the most efficient agricultural technology for sugarcane cultivation in the world, led Brazil to become the world leader in the sustainable use of bioethanol. In 2010, the US Environmental Protection Agency (EPA) designated Brazilian sugarcane ethanol as an advanced biofuel due to its 61% reduction of total life cycle GHG emissions, including direct and indirect land use change emissions. 13
Biofuels, therefore, represent a useful opportunity for Brazil to exert global leadership by substantially scaling up their production, consumption, and international trade. The prerequisite for biofuels to develop into a globally traded commodity is a large market comprised of countries that not only consume, but also produce biofuels. In this context, the African continent is essential to this expansion, given its potential for the growth of energy crops like sugarcane. For this reason, the Brazilian government has made major coordinated efforts to engage with Africa and develop a sustainable biofuels economy in many countries of the continent. As such, Brazil is championing a new paradigm of international cooperation, as this South-South technology exchange divorces from the trend of North-South technology exchange. The cooperation is mutually beneficial because the cost of technology exchange is lower and the results are more easily shared. Technology is no longer superimposed onto developing nations as a finished product; rather it is introduced in the form of a joint development project, thereby encouraging domestic innovation at a low cost and establishing a symbiotic relationship.
A Leading Nation
Brazil is a regional power in Latin America and a middle power in international affairs, with many identifying the country as an emerging global power.
A Regional Power
In view of the asymmetry of power in South America–Brazil accounts for more than 50% of its territory, population, resources and GDP–it is difficult for the country to avoid a leadership role. The commanding lead among its neighbors started with soft diplomatic initiatives like cooperation on technological and scientific fronts, which has now flourished enough to include joint military exercises, arms transfers, naval drills, and financing. Although the principal focus of Brazil's regional foreign policy has been South America, since 2004 the country has led the United Nations Stabilisation Mission in Haiti and was deeply involved in the Honduran crisis of 2009. Furthermore, Brazil has been involved in financing activities all over the continent. Brazil's National Development Bank (BNDES), created decades ago to expand the domestic industry and infrastructure, has been financing development and infrastructure projects in many Latin America countries, including major investments in Colombia, Ecuador, Peru, and Cuba (where the infrastructure renovation of the port of Mariel is expected to modernize Cuba's capacity for maritime commerce). To put these investments in context, they reached more than $100 billion in 2010, exceeding both those of the World Bank and the Inter-American Development Bank.
A Global Power
Brazil has actively promoted the reform and democratization of multilateral institutions, like the United Nations (with a notably vigorous pursuit of a permanent seat on the UN Security Council), the International Monetary Fund, and the World Bank, among others. As such, Brazil's case for a permanent seat on the UN Security Council stands out for reasons well beyond its dominant position in Latin America. The country has been a key player in discussions involving a broad range of social, political, economic, and environmental global issues, including the reduction of world poverty and disease (especially HIV/AIDS), intellectual-property rights, nuclear proliferation and, most importantly, climate change.
Brazil has also demonstrated independence from other members and traditional powers within the UN. When holding one of the rotating seats of the Security Council in 2010 and 2011, on several occasions the nation coordinated with non-permanent members to block or slow UN actions supported by the US and European countries. As a traditional non-military power, the Brazilian state has chosen to wield global influence through “soft power,” like diplomacy, economic investments, and social developments.
In addition, Brazil has been exemplar in major global affairs of primary relevance. For example, the country renounced its military nuclear program decades ago and signed the Nuclear Nonproliferation Treaty; and in 2009, the Brazilian government signed a voluntary emission reduction plan through the establishment of the “National Policy on Climate Change” (Law No. 12.187, 2009), turning its international climate commitment into national law. The plan was far-reaching and ambitious, addressing how Brazil would tackle its current and future GHG emissions and adapt to the impacts of climate change. On September 28, 2015, the government submitted to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) its “Intended Nationally Determined Contribution,” with a target to reduce net GHG emissions by 37%, to below 2005 levels by 2025. 14 In addition, it mentioned an “indicative contribution” to reduce emissions by 43% below 2005 levels by 2030.
Over the last decade, Brazil has worked intensely to strengthen its relations with the “global south,” China in particular, but also India and South Africa (through the India-Brazil-South Africa Dialogue Forum [IBSA] group) and with the “deep south,” especially the countries in Africa. Through the transfer of capital, technology, skills training, and research, Brazil is providing groundbreaking approaches to foster international aid for and development of Africa. EMBRAPA Africa is an excellent example of a Brazilian strategy to enhance agricultural innovation and development in the continent. Another major example is the cooperation of the Brazilian government on social development policies, such as Bolsa Família (Family Allowance, a highly successful, conditional cash-transfer program based on school attendance and regular medical checkups for children living in poor families) and HIV/AIDS prevention and treatment programs (the success of which is frequently cited as a model for other developing countries).
As a result, Brazil has become a model for globalization with social conscience within the developing world. It is receiving increasing visibility as an international development actor. Consequently, Brazil has been able to successfully launch itself as a global player.
Challenges
Brazil Cost
Custo Brasil (Brazil Cost) is a term used to describe several factors that make Brazil a relatively expensive place to do business. According to the 2013–2014 Global Competitiveness Report of the World Economic Forum, tax regulations are one of the most problematic factors for doing business in Brazil. 15 The national tax system is very complicated and fragmented. As a result, local mid-sized companies have to spend 2,600 hours a year to comply with tax regulations, according to the Doing Business report, which is almost 10 times the global average and 15 times more than for EU countries. 16 In addition, tax rates are very high. At 35% of GDP, the total tax burden is far heavier than in other developing countries. Payroll taxes, at 58% of salary, are higher than in any other big economy. Consumption is also heavily taxed, which explains why a Brazilian-made car costs up to 45% less in Mexico than it does in Brazil.
Another major problem for business in Brazil is the inadequate supply of infrastructure. Although Brazil invested in a lot in infrastructure in the 1970s, federal investments have decreased since the 1980s. The rapid development of the country during the last decade, which resulted in a strong increase in demand for infrastructure, associated with the government's poor track-record for planning and execution, aggravated the problem even more. Consequently, the quality of the national transport network remains low. According to the McKinsey Global Institute, the value of Brazil's infrastructure stock was 16% of GDP and far below the value of the infrastructure stock of other emerging markets. 17 For example, India had a stock of 58% of GDP, China a stock of 76% of GDP, and South Africa an even higher 87% of GDP. Advanced economies also have much higher investment stocks than Brazil.
High levels of corruption within the public sector, excessive bureaucracy for importing and exporting, high electricity rates, legal uncertainty, and high social security costs are other factors that contribute to the excessive operational costs associated with doing business in Brazil. Consequently, Brazil ranks 120th of 189 countries according to ease of doing business. 16 In 2013, Brazil was ranked 123rd.
The Innovation Challenge
Brazil's national innovation system is relatively young compared to similarly sized economies. Prior to 2001, government agencies responsible for advancing scientific knowledge only considered the issues of “science and technology.” Now, the focus for these agencies is on “science, technology and innovation.”
Brazil's industry is globally competitive in sectors that either derive from its abundant natural resources (oil and gas, agriculture), or were developed to preserve and protect them (aircraft and remote sensing). However, innovation in other sectors remains largely absent. Although Brazil has the strongest science and technology workforce in South America, industry is not highly innovative according to many objective measures; e.g., Brazil ranks 70th in the Global Innovation Index 2015. 18 The country's economic growth appears to rely on Brazil being integrated into the global supply chains of other countries, primarily China, and less on the maturation of a national innovation strategy.
A grand challenge for the country is how to better converge science into technology, and technology into innovation, and connect to global innovation and supply chains. Brazil is the 13th largest country in terms of scientific production (articles), but ranks only 70th in terms of global innovation. National patent production still is very low, corresponding to only 0.2% of the world production. This small share of international patent filings can be attributed to the low level of investments in R&D and the immature nature of its innovation system, characterized by the lack of mission-oriented investments and university-industry interaction.
Brazil invests only 1.2% of its GDP in R&D (55% of this investment is public), compared to a rate of about 3% in industrialized countries. In addition, federal investments are not mission-oriented. In Brazil, only 30% of science and technology (S&T) investments are linked to institutions with problem-solving missions. In US, more than 90% of S&T investments are mission-oriented.
Another key weakness in Brazil's innovation system is the gap in university-industry interaction and collaboration, caused in part by companies' lack of involvement in R&D-driven innovation and the dearth of scientists and PhDs in the private sector. They are instead concentrated in universities and research institutes (∼80%). The situation is quite the opposite of countries such as the US, Korea, and Japan, where the percentage of researchers concentrated in companies is more than 70%. In Brazil, academic researchers have little interaction with industry, a trend that policies have not been able to impact thus far. As a result, transitioning of R&D outputs from public research institutions is quite limited. The low technological and innovative intensity of the domestic industry is one of the factors that explain this situation. The shortage of opportunities in business directed PhDs toward careers in teaching and academics, resulting in a shortage of researchers able to perform R&D work and industrial production in the current stage of expansion of the biobased industry.
Industrial Productivity and Trade Openness
Since the 1980s, the role of the industrial sector in the national economy has declined significantly, even as industrial growth has continued to strengthen steadily across many countries, especially in East Asia. Even in comparison with other countries in Latin America, the declining role of Brazil's industrial sector has been notable. Unlike in several other emerging economies, where the industrial sector has been a key driver of aggregate GDP growth, real industrial output as a share of GDP in Brazil has been basically flat for 20 years. In fact, most of the recent economic slowdown can be traced back to the subpar performance of the industrial sector. From 2005 to 2012, Brazil's commodities exports increased from $11 billion to $64 billion, but over the same period, a trade surplus of $20 billion in manufactured goods turned into a trade deficit of $45 billion.
With trade (exports plus imports) accounting for just 27.6% of GDP in 2013, Brazil remains one of the world's most closed economies, ranking only 124th in the world for ease of trading across borders. 16,19 In 2010, Brazil's share of world trade was very close to where it stood in the mid-1980s. It is noteworthy that Brazil's trade openness lags far behind its peers among the BRICS countries, all of which reached trade-to-GDP ratios of at least 50% in recent years. Recent research shows that countries centrally connected within the various types of global networks can gain up to 40% more GDP growth from them than the least connected countries. But Brazil ranks only 43rd in the world for connectedness. 20
The assessment of Brazilian exports in terms of sophistication suggests a clear decline in the share of products with higher technological content. Thus, the fallen share of high-technology products reflects its poor absolute performance, and not just the success of commodity-related exports. This weak performance of the industrial sector is largely the result of low productivity, which is a negative consequence of the high level of government intervention. The Brazilian government continues to dominate many areas of the country's economy, undercutting development of a more vibrant private sector by global competitiveness. While some sectors remain heavily protected and taxed, others have been more exposed to global market forces, and a comparison shows that openness to global competition has been more effective in boosting sector productivity. One good example is the agricultural sector, which has grown more productive since it was gradually opened. In the early 1990s, Brazil began eliminating price controls and marketing boards that regulated production of certain crops; it also reduced export tariffs and import restrictions. This caused an initial wave of disruption, but the sector eventually reconfigured and emerged much stronger. Reducing direct market intervention has paid off in higher productivity and increased exports.
Thereby, within in one of the country's major challenges lies one of the most promising opportunities to unleash significant national growth potential. The industrial sector and trade, which have been the key drivers of economic growth in other emerging economies are just beginning to flourish in Brazil. Therefore, there is great potential for continued integration into the global economy alongside ongoing efforts to further develop and integrate the domestic market. In addition to entering new markets, Brazil can benefit from embracing the performance pressures that come with international competition. Global exposure also makes cheaper and more modern inputs available, and it enables companies to absorb more of the world's rapidly expanding flows of innovation, technology, research, and ideas.
This integration into the global economy will involve shifting current government focus from protecting local industries to strengthening their competitiveness in global markets–a shift that will challenge Brazilian companies to evolve. Focusing on innovation could allow Brazil to develop new strengths in higher value-added products and services. Eventually this will result in a more diversified and resilient economy.
The Current Crisis
From 2000 to 2012, Brazil was one of the fastest-growing major economies in the world, with its economic reforms giving the country new international recognition and influence. The average annual GDP growth rate was over 5%. In 2012 its economy surpassed that of the UK, making Brazil the world's sixth largest economy (with a GDP of $2.41 trillion). However, Brazil's economic growth decelerated in 2013 ($2.39 trillion) and had almost no liquid growth throughout 2014. 21 According to the Brazilian central bank, the country's economy is expected to shrink by more than 3% in 2015 and 1.9% in 2016, making it the world's ninth-largest by nominal GDP and seventh-largest by GDP based on purchasing power parity (PPP).
This economic downturn is the result of a convergence of factors, in particular a slowdown of growth in places such as China, which has been a key source of demand for Brazil's natural-resources industry. The ongoing investigations of corruption in the highest government offices and in the national oil company Petrobras (the country's biggest company) have raised governance issues and affected confidence in economic agents, which will delay the recovery of investments, both from domestic and overseas investors. Consequently, the federal budget approved in May and June 2015 froze up to 30% of the total resources allocated to the Ministry of Science, Technology, and Innovation.
It is important to point out that Brazil is just one of many emerging market economies that have seen sharp slowdowns in growth. Despite the poor economic performance during the last 2 years, there is no immediate threat of an external crisis, as Brazil has $360 billion of reserves (17% of GDP), and a solid financial sector. Once the fiscal results improve and inflation starts to return to target levels, there will be clear growth pay-offs as recovering confidence will support stronger investment and consumption, particularly if coupled with the implementation of structural reforms. In the coming years, growth is projected to return gradually to the economy's growth potential.
The medium-term recovery will depend on the success of current adjustments and the adoption of further development-enhancing reforms. To achieve higher growth, raising productivity and competitiveness remains the crucial challenge for Brazil. The greatest potential for achieving productivity gains lies in the industrial sector, where Brazil still has major deficiencies, as explained in the previous section. In this context, the bioeconomy can and should be the path for the re-industrialization of Brazil, fostering much needed innovation and development of products and processes that will unleash significant national growth potential.
Recent Advances
Despite the challenges highlighted previously, the federal government has recently acknowledged the importance of the industrial biotechnology sector in Brazil. The government's innovation policy is shifting from focusing mainly on the science base to stronger support for commercial R&D. A modern legal system was implemented to allow the development of science, technology, and innovation: the Innovation Law (Law No. 10.973, 2004) permits direct funding of business through competitive grants. The Goodwill Law (Law No. 11.196, 2005) introduced a wide range of fiscal incentives for companies that invest in R&D. In 2007, tax exemption rules for companies were modified to link them to the use of intellectual property rights. In terms of regulation, the Biosecurity Law (Law No. 11.105, 2005) regulates research, testing, production, marketing, and use of genetically modified organisms (GMOs) in Brazil. Consequently, the number of GMO-based technologies approved leapfrogged from 4 to 65. On November 17, 2015, the Biodiversity Law (Law No. 13.123, 2015) was enacted; this new Law regulates, and will accelerate, the process for economic exploitation of biodiversity resources and the development of scientific/technological research involving the national genetic heritage. Moreover, on December 9, 2015, a new legal framework for science, technology, and innovation (ST&I) was unanimously approved by the national Senate and sanctioned by the President on January 11, 2016. The Law Project (No. 77, 2015)–which will extend nine laws on research and development activities–promotes a series of actions to encourage national scientific and technological development. It entails changes to, for example, some incentive measures of the Innovation Law, such as promoting cooperation and interaction between public and private sectors, stimulating innovation activity in ST&I, promoting business competitiveness, simplifying procedures for the management of ST&I projects, adopting methods to evaluate and control results, and harnessing the power of government purchasing to foster innovation. Changes will also include broadening the definition of innovation to include incremental social and environmental innovations. New articles were also added to the law to pinpoint support for the creation, implementation, and consolidation of promoters of innovation environments; to render R&D centers more attractive to foreign companies; and to maintain specific programs for micro and small businesses. In addition, the proposal specifies the definition of intellectual property created between universities and companies as well as technology transfer.
Compared to other South American countries, the Brazilian government has unique capabilities to promote industrial policies. The success of the ethanol industry is a telling example. Previous policies, such as the Industrial, Technological and Foreign Trade Policy (PITCE 2003–2007), the Productive Development Policy (PDP 2008–2010), and the Action Plan for Science, Technology and Innovation (PACTI 2007–2010, with its investment of more than 41 billion reais [$10.2 billion]) have paved the way for the creation of Plano Brasil Maior (Greater Brazil Plan), Brazil's current industrial policy. These policies have enhanced dialogue among the government, entrepreneurs, and workers, thus creating better conditions to engage the necessary institutions in the creation and maintenance of productive policies. The Greater Brazil Plan now seeks to promote economic growth through policies that boost investments in Brazil and increase its competitiveness. Through PACTI, and its National Strategy for Science, Technology and Innovation for 2012–2015, the Ministry of Science, Technology and Innovation has noted the strategic importance of biotechnology for the development of Brazil. The National Strategy 2012–2015 united the public policies that were developed in various ministries, government bodies, and startup agencies. The aim was to make it possible for initiatives to move out from the academic world and for the government to become a vigorous change agent for development in the widest possible variety of productive areas, both private and public.
In 2013, the government established the Brazilian Enterprise for Research and Industrial Innovation (EMBRAPII) to facilitate the translation of technological research into product innovation. EMBRAPII was created under the inspiration of EMBRAPA. It is mainly aimed at small- and medium-sized businesses. Similar to the Fraunhofer Institute in Germany, EMBRAPII's purpose is to promote cooperation between companies and research institutions in R&D. The organization provides up to one third of the total project; the rest is divided between the company and partner institutes.
In 2014, the Ministry of Science, Technology and Innovation launched the National Knowledge Platforms Program with the objective of articulating scientific and technological sectors within companies. The goal is to launch 20 knowledge platforms within 10 years. The platforms will be structured based on the logic of problem-solving, guided by the demand of Brazil's strategic interests.
In the context of the circular economy, Brazil is also making major progress. In 2010, the country implemented its Solid Waste Policy (Law No. 12.305), laying the groundwork for its National Policy on Solid Residues and fostering the debate among various stakeholders about the shared responsibility of product disposal and implementation of reverse logistics and waste management frameworks in cities and along the production value chain. Furthermore, three initiatives supported by government development agencies, such as BNDES and the National Innovation Agency (FINEP), encourage the funding of projects around the circular economy. Such mechanisms include the National Fund for Climate Change, FINEP's Sustainable Brazil fund, and BNDES’ Funtec fund. Finally, the Brazilian Ministry of Environment in 2011 established the Action Plan for Sustainable Production and Consumption, providing direction and coordination to more sustainable methods of production and consumption. This plan links the country's key environmental and development policies, especially the National Climate Change and Solid Waste Policy and Brazil's industrial policy (the Greater Brazil Plan).
To promote the consolidation and expansion of ST&I in Brazil, a large-scale nationwide scholarship program was launched in 2011. Primarily funded by the Brazilian federal government, the “Science without Borders” Program provided more than 100.000 scholarships for Brazilian students, scientists and industry personnel to study in international institutions of excellence, primarily in areas of strong industrial interest for the country, such as natural sciences, engineering, agriculture, energy, and health. The Brazilian government funded 75,000 scholarships, and an additional 26,000 were funded by the private sector. In mid-2014, the Brazilian government announced an expansion of the program, with a target of supporting another 100,000 study-abroad scholarships through 2018. However, the current weakening economy has led to budget cuts in this program. Notwithstanding, “Science without Borders” has emerged as one of the most significant government-funded mobility initiatives in the world.
Another recent landmark program emerged from the private sector. In 2014, a group of the world's leading industrial biotechnology companies joined forces to form the Brazilian Industrial Biotechnology Association (ABBI) with the aim of promoting dialogue among stakeholders, policy makers, and the public about advancing industrial biotechnology in Brazil. ABBI aims to improve the current legal and regulatory framework including intellectual property, biological diversity, and biosafety, foster investments in R&D, production scale-up, and market development, as well as in capacity and training for skilled and technical labor.
Special Issue Content
To analyze in more detail the country's current efforts, opportunities, and challenges for developing a comprehensive and advanced national biobased industry, I invited leading experts to present their views on themes of primary relevance to the Brazilian life science industry.
Introducing the issue, Bernardo Silva comments on how industrial biotechnology is advancing a sustainable and prosperous future for Brazil. 22 Eduardo Giacomazzi provides a brief history of industrialization in Brazil and highlights the relevance of defining a national policy for industrial biotechnology. 23 Torres and Grundling review the government policies and market characteristics related to the two main biofuels produced in Brazil, biodiesel and ethanol. 24 The authors describe how ethanol and biodiesel have different challenges regarding production, technology, market conditions, and policies, which are essential to understand the development of future effective incentives to support a sector in which the country has a leading position. Souza et al. summarize the recent advances in modern bioenergy taking place in Brazil, which indicate that a new green revolution is on the way. 25
In a Catalyzing Innovation article, Torres-Freire et al. discuss the financing of industrial biotechnology innovation in Brazil, assessing the current situation, bottlenecks, and the need to diversify company support instruments. 26 According to the authors, the majority of industrial biotechnology companies in Brazil are recently established, small businesses. However, better financing conditions are concentrated in big companies, while small businesses, where radical innovations and possible paradigm breaks may occur, confront major obstacles in finding access to more favorable conditions. As such, the authors highlight the need to re-think the use of lines of support and identify better ways to tailor them according to the stages of the company within the production chain.
Cota et al. review the public polices implemented by the Brazilian government to improve the strategic use of intellectual property and, therefore, ensure increased competitiveness of national industries. 27 The authors point out that despite these initiatives the current innovation scenario is characterized by insufficient patent applications and explain the reasons for Brazil's poor performance in the rankings of patent applications. dos Santos et al. review the advances and challenges behind the production and fermentation of lignocellulosic sugars, presenting the potential that this technology represents for the renewable fuels sector. 28 Brumano et al. review the recent advances in the sustainable production and application of biosurfactants in Brazil and Latin America, as well as current government policies that are stimulating the production of green chemicals through biotechnological processes. 29 Finally, Junqueira et al. demonstrate the potential of the Virtual Sugarcane Biorefinery, a simulation and evaluation tool designed to assess the development of new technologies and innovations in the production and processing of biomass. 30 The interesting and informative content provided by the contributors to this special issue offer a glimpse into how industrial biotechnology is thriving in Brazil. Despite the current challenges, a myriad of advances are taking place in many areas, providing exciting opportunities for the Brazilian life science industry.
Footnotes
Acknowledgments
I am deeply grateful to Dr. Larry Walker, Dr. Glenn Nedwin, and Vicki Glaser for inviting me to serve as Guest Editor for this issue. As a Brazilian researcher and member of the Editorial Board of Industrial Biotechnology, it was a great honor to lead this major project. My thanks are also extended to the invited authors for submitting such interesting contributions.