**To read the full report for this event, please click on the cover image to the left or scroll down to the report link at the bottom of the page. Below is a brief summary of the events proceedings.**

Over the past year the Brazil Institute and the Program on Science, Technology, America and the Global Economy (STAGE) have jointly sponsored a series of events to advance research and dialogue on critical economic issues, focusing particularly on the roles of innovation and labor. On questions of innovation, the Brazil Institute sponsored the second of three conferences at the University of São Paulo's Politécnica engineering school on November 8, 2007.

Fostering innovation is a key challenge for Brazil as it strives to emerge as a global economic force. Whereas in the last century Brazilian scientists and research institutions developed the country's capacity to produce state-of-the-art knowledge in various fields, innovation—the ability to apply knowledge in the development and production of goods and services—remains largely absent in many sectors of the economy.

Carlos Américo Pacheco, assistant secretary for development of São Paulo, explained that globalization has increased the competitiveness of countries and corporations integrated into the world economy. This, in turn, has sharpened the need for innovation, making it a central pillar of any public policy aimed at economic development and industrialization. Carlos Henrique de Brito Cruz, scientific director of the State of São Paulo's Research Foundation (FAPESP), discussed the continued discrepancy between Brazil's ability to generate knowledge and its failure to translate that knowledge into tangible products and services. He called on the country to adopt policies that recognize the role firms play in the innovation process. Sérgio Risola, general coordinator of the University of São Paulo's Technological Enterprises Incubator Center (CIETEC-USP), argued that business incubator centers improve entrepreneurship. They do so by bringing together leading experts and provide them with the necessary resources, technical knowledge, and training to better manage financial resources and the development of new companies and products in an "environment that promotes cross-pollination of ideas."

Stephen Merrill, executive director of the U. S. National Academy of Science's Board on Science, Technology, and Economic Policy (STEP), noted that changes in the United States reflect broader, underlying patterns that are shifting the way innovation works. Merrill explained that the success of the U.S. innovation system can, in part, be linked to the role institutions (public, non-profit and commercial) play in performing research and development (R&D); the availability of capital and the sophistication of financial actors that invest in technology-based start-ups; the robust intellectual property (IP) regime and strict enforcement of IP rights; and business-friendly tax policies as well as the compatibility of technical and regulatory standards. Kent Hughes, director of STAGE, discussed India and China's growing influence in the field of innovation and projected that both countries will impact the policies and strategies of developed and developing countries alike. Hughes said that globalization has altered the structure of the international economy, bringing about opportunities for emerging economies not only to be niche producers of technology-based goods but also generators of knowledge.

Several business leaders and government officials focused on the business aspects of innovation. Luiz Henrique Braido, professor at the Getúlio Vargas Foundation, noted studies that indicate that as much as 50 percent of the disparity in household income around the world can be explained by differences in the use and availability of technology. Fernando Reinach, executive director of Votorantim Novo Negócios (Votorantim New Ventures), assessed the critical role of venture capital in the development of new products and services. He said that the problem with innovation in Brazil is not the inherent risks and costs associated with the process of product development, but rather the added costs resulting from the country's weak institutional framework and poor legal enforcement.

Alexander Triebnigg, president of Novartis Brasil, evaluated the complex and problematic relationship between Brazil and the pharmaceutical industry. For Brazil to boost innovation in the pharmaceutical industry, he argued, the country must aggressively modernize the institutions charged with promoting innovation and strengthen IP laws and patent rights. Other speakers on the third panel included Maurício Mendonça, chief executive of the Industrial Competitiveness Unit of the National Confederation of Industries; Mauro Assano, executive manager of research for IBM Brasil; Sonia Tuccori, R&D manager for Natura; and Olívio Ávila, executive director of National Association for R&D of Innovative Companies (ANPEI).