Brasília, DF30 June 2011Volume 1/2011

Destaques individuais: Introduction 1

Brazilian mobility programme announced: Possible implications for the EU 2

2nd generation biofuels joint/coordinated calls: CNPq and the EU launched projects 2

Reinventing innovation: Brazil has all the tools to stimulate innovation 3

Technological deficit in Brazil grows 28% on the first semester 3

Conference World Aquaculture 2011 4

EU – UNESCO seminar: The Role of S&T in Prevention of Natural Catastrophes 4

It is necessary to increase investments in innovation

5

Seminars with the participation of the RTD secotr in the EU delegation in Brazil 5

UK and Brazil reinforces links in science and innovation 5

Evolution of the Brazilian participation in FP7 6

IntroductionAfter installation in office (1/1/11) of the new Government in Brazil is trying to

develop a new strategy- more economically pragmatic, more internationally oriented, but still with strong links to old approaches. Also is launching the new plans for Research, Technological development and Innovation to promote the competitiveness of the economy. MCT (Min for ST) has launched the new Plan for ST&I as well as the programme for mobility: Science without borders, aiming at increasing by a factor of 10 the existing number of students, researchers and scientists to go abroad as well as to attract qualified professionals. The Plan proposes to mobilize 100.000 students and scientist in the next 3 years.

This impulse tries to change the situation contrasting with the structural deficits in technology: in the first trimester of 2011 it has increased by 28% up to 23 B US$. Brazil is lacking 50,000 engineers to cope with the economic development: of the 22 oil platforms commanded in the last 4 years only 3 are being built in Brazil due to lack of infrastructures, high national costs and also due to the possibilities that a strong Real offers to buy abroad. Brazil prepares every year 65,000 postgraduates but mostly on non- technological fields and with a weak link of universities transfers to the private sector.

Last figures of Brazilian participation in FP7 indicate a permanent, stable growth: accumulated figures indicate participation in 2010 in more than 170 projects. These figures place Brazil on the first position of all Latin-American countries and may indicate that the EU can be a reliable, solid partner for Brazil in the quest for a sustainable, scientific and technological progress. This includes also new types and areas of collaboration as the recent one for Prevention for Natural Catastrophes initiated between JRC and MCT.

Brazil will be in the headlines as host of the Rio +20 Summit. In June 2012 all eyes will be on Rio de Janeiro, where twenty years after the first "Earth Summit", Heads of State and Government will attend the United Nations Conference on Sustainable Development1. Rio+20 will build on previous global Summits: the UN Conference on the Human Environment (Stockholm, 1972), the Earth Summit (Rio de Janeiro, 1992), and the World Summit on Sustainable Development (Johannesburg, 2002). It also follows on from the establishment of the Millennium Development Goals (MDGs).The European Commission is determined to help make Rio+20 a success. All these challenges will require unprecedented level of scientific and technological cooperation at the global level.

Angel Landabaso Counsellor.

EU Delegation in Brazil

On 2 June 2011, President Dilma Rousseff announced that she has requested the preparation of a Programme named Science without Borders - an ambitious mobility programme for students, scientists, and innovators to be trained abroad and to attract scientists to Brazil. The programme, in its final design stages, is expected to be officially announced shortly and then institutionalized by the issuing of a Presidential Decree. A joint endeavour by the Ministry of Education and Culture and the Ministry of Science and Technology, the main programme objectives are to "boost" Brazilian science, technology, innovation, and competitiveness through the expansion of international mobility of Brazilian graduate and post-graduate students. Increasing research capacity in industry as well as patent registration and innovation are two main areas of interest for Brazilian authorities. In order to do so, the Brazilian Government envisages funding grants for 75,000 students and scientists to study / research abroad in a three-year period (2012-2014) as well as grants to attract leading scientists to Brazil. If the private sector contributes as expected, an additional 25, 000 grants should also be financed. Brazilian authorities expect that host institutions would be expected to exempt students or at least reduce the costs of tuition fees. This could be reciprocal A

formal call for proposals will be launched once the programme is instituted and interested institutions will be expected to participate and sign bilateral agreements as appropriate. The programme has already been informally presented in the US following a letter of intentions signed with occasion of visit of Pres Obama. Brazilian authorities anticipate that a large number of students will potentially have Europe (and Canada) as destinations. At present, the Government does not intend to fund additional awards in Latin America.This ambitious programme (tenfold mobility of actual figures), which would officially begin sending students in early 2012, involves very important political, organisational and bureaucratic challenges for the Brazilian administration. It will represent as well a challenge and an opportunity for EU member states and European universities. Attracting large numbers of Brazilian students and researchers to Europe and vice versa, may have important medium to long-term effects on the bilateral relations with Brazil, boosting scientific, economic, social, and cultural contacts between the two regions.Although the programme has yet to be formally presented and it might be too early to speculate

about its full implications, there seems to be space for an important role for the EU in coordinating the EU Member States' efforts to respond to this important Brazilian initiative as well as to contribute to organise the required system with the Brazilian authorities. Brazilian representatives initially intend to travel to Brussels at the earliest (possibly already at the occasion of the EU-Brazil Joint Committee meeting on 31 June). This would provide an excellent opportunity to further discuss these matters and, if the program is adopted and funding provided, explore ways to support Brazilian efforts in this area. The initiatives discussed during the recent visit to Brazil of Commissioner Vassiliou (e.g. establishment of a Higher Education Expert Dialogue) may help establishing a framework for cooperation. Considering the strong scientific focus of the Brazilian programme a close involvement of DG RTD seems obviously necessary. In Brasilia we have scheduled meetings with MEC and CNPq on these issues to get information about the respective initiatives.

Newsletter – S&T in Brazil Página 2 de 6Brazilian mobility programme (students, scientists, and innovators) announced:Possible implications for the EU

Participaram do evento o Prof. Paulo Sérgio Lacerda Beirão, Diretor de Ciências Agrárias, Biológicas e da Saúde (DABS) do CNPq, o Conselheiro Angel Landabaso, da Delegação da União Européia em Brasília, o Prof. Renato Atílio Jorge, Assessor da Diretoria Cientifica da FAPESP, representando as entidades responsáveis pelo apoio financeiro a execução das atividades de pesquisa, desenvolvimento e inovação previstas.

Os coordenadores dos projetos, Igor Polikarpov, da Universidade de São Paulo/S.Carlos, e Elba Pinto da Silva Bom, da Universidade Federal do Rio de Janeiro, bem como membros das duas equipes, técnicos e gestores do CNPq, também prestigiaram a cerimônia, organizada pela Cooperação Internacional do CNPq.

Na abertura o diretor da DABS destacou o grande esforço de cooperação Brasil-União Européia nessa área, com o lançamento do presente edital. Afirmou que se trata de colaboração win-win, em que o país se empenha em complementar seus esforços de P&D,I aproveitando a expertise da EU em alguns segmentos, para que todos os parceiros envolvidos ganhem nesse processo. Ponderou, no entanto, que, “apesar desse empenho, ainda há muito que se fazer para se manter no ápice do desenvolvimento tecnológico em energia renovável sustentável”. O Conselheiro Angel Landabaso reconheceu o grande esforço empreendido pelas partes, ressaltando que mecanismo utilizado foi um edital coordenado, com participação mútua em todo processo, no qual a seleção conjunta foi de nível internacional. Destacou ainda que, além do Brasil, a UE, mantêm este tipo de cooperação apenas com a Rússia e a China. Mencionou também o caráter especial do perfil de cada ganhador, identificado por sua competência e pelo interesse de complementaridade das ações propostas em parceria com os pesquisadores europeus. Ressaltou que o Brasil apresenta todas as condições para liderar a revolução dos biocombustíveis de 2ª geração e que a UE tem o maior interesse em participar como parceira nesse processo, a partir dessas iniciativas e da adoção de políticas para ampliar o uso de biocombustíveis nos seus meios de transportes. Finalmente, comunicou que este tipo de evento para divulgação dessas iniciativas conjuntas de pesquisa na mídia é essencial para esclarecer sobre seus objetivos, perfil de cooperação, perspectivas, impactos e resultados esperados. Contribui para uma melhor compreensão do uso de biocombustíveis pelo cidadão europeu e auxilia a desmistificar eventuais controvérsias a respeito. Sugeriu, inclusive, a organização de um outro evento do gênero em Bruxelas, em parceria com as equipes européias, durante a realização de evento cultural , prevista para outubro deste ano.

Os coordenadores dos projetos afirmaram que há escassez de recursos humanos nesse campo e que esperam que seus projetos possam contribuir para formação de recursos humanos em segmentos estratégicos relacionados com petróleo, produção de biomassas e outros setores da energia alternativa renovável. Declararam que o grande desafio e coordenar tecnologias competitivas, inclusive gerando valor agregado, mas estão certos que poderão avançar muito nesse sentido com a execução dos projetos aprovados em a parceria como os pesquisadores europeus.

O evento foi considerado bastante proveitoso pelos participantes por ter possibilitado esclarecimento de vários aspectos práticos relacionados com sua execução pela área técnica do CNPq e por possibilitar a troca de informação entre as equipes envolvidas dos dois projetos.

A fim de estimular a cooperação em ciência, tecnologia e inovação entre grupos de pesquisa brasileiros e da União Européia (UE), o Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq/MCT) lançou, em 2009, Edital para estimular ações de cooperação internacional na área de biocombustíveis de segunda geração. Para oficializar o início dos projetos ocorreu, no dia 28 de abril, cerimônia na Sede do CNPq em Brasília.

Foram submetidas 22 propostas, das quais foram aprovados os projetos CEPROBIO e PROETHANOL2, com duração de 48 meses. O investimento pela parte brasileira para execução desses projetos equivale à R$ 11,6 milhões e foi distribuído entre o CNPq, MCT, FAPESP e FAPERJ. O esforço correspondente da UE para apoio financeiro aos projetos europeus equivalentes é de 4 milhões de Euros.

2nd generation biofuels joint/coordinated calls: CNPq and UE launched projects

Conference World Aquaculture 2011"Aquaculture for a changing world" – Natal June 6-10, 2011

Newsletter – S&T in Brazil Página 3 de 6

After more than 20 years of free trade, Brazilian industry has realized it needs to compete to win lasting market share. The fact that innovation drives competitiveness is now generally recognized by both policymakers and businesspeople. But despite widespread consensus about its benefits and as the government prepares to release a new industrial policy, innovation is still far from driving the national economy. Paulo Mol, executive manager for industrial policy and research and innovation, National Confederation of Industries (CNI), gives one explanation for this. “In our surveys, innovation always appeared as one of the three strategic themes for productivity growth — but no one sought to organize themselves to encourage it.” However, in 2008, 40 major companies, among them Braskem, Ford, Gerdau, and Vale, created Entrepreneurial Mobilization for Innovation (MEI); its goal was to double the number of innovative companies in Brazil in four years. The initiative is bearing fruit: the American Chamber of Commerce and the Dom Cabral Foundation recently surveyed 300 managers of innovation and strategy for medium and large companies in Brazil. Of these, 78% said they plan to invest more in innovation.Yet 40% of the sample said their companies currently invest less than 1% of sales in innovation, and 9% have not begun to invest. “A business that innovates opens markets and expands, grows ahead of competition, and is more profitable, which creates dynamism in production,” comments João Carlos Ferraz, vice president and director of planning, the National Bank for Economic and Social Development (BNDES). Brazilian competitiveness may be at risk. For example, Brazil applies for fewer international patents than the other BRICs, and about two-thirds of total research and development (R&D) comes from Informatics Law tax exemptions. If these are excluded, Brazilian incentives amount to one fourth of the United States, and one third of Japan.Credit and researchFerraz of BNDES notes that since 2001 there has been more effort to promote innovation, using proceeds from Cardoso’s privatization of state owned

companies and facilitated by funds from the Lula administration’s Law of Innovation and Productive Development Policies and Science , Technology and Innovation: “The funds represented a radical change in the way of giving incentives....Lula’s policies give a sense of order and continuity to the [innovation] process.” FINEP is responsible for supporting technological innovation and administers sector funds. Early in his administration, Aloisio Mercadante, Minister of Science and Technology, even proposed transforming the agency into a bank; in 2010, FINEP investments totaled R$4.2 billion, benefiting about 2,000 companies. Yet the government has cut the agency’s budget for 2011 to maintain a budget surplus as a way to contain inflation, slicing 22% from the National Fund for Scientific and Technological Development (FNDCT), the main source of FINEP funds. When financing isrestricted, small businesses, the weakest link in the innovation supply chain, suffer most . Evandro Cunha, commercial manager of Jevin, which provides communication services for oil and gas companies, says, “We have identified many businesses with the ability to solve problems and meet specific industry demands, but it is difficult to secure the needed financial resources.” CNI’s Mol adds that “Channels are necessary, like the BNDES Card, that are dedicated to small businesses.” Cesar Rogerio de Souza, chief economist, Institute for Industrial Development Studies (Iedi), thinks that one problem is the heavy influence of the academy in the design of tools to support business innovation; he thinks academicians should focus on knowledge that creates value for the market. Hilton Marinho, director of TS Soluções, a small industrial automation company, agrees: “When we seek funding, what seems to matter is not reality, but the academic knowledge you bring to your business, because projects are evaluated from that point of view, not the market.”About five years ago, for example, Marinho decided to take advantage of certain similarities between sanitation and oil production and offer its products to the oil sector. In 2008, he presented a computer program of oil and gas flow, which was certified in 2009. But TS Soluções was not able to sell its product because the regulations changed. The National

Petroleum Agency (ANP) set new requirements for certifying the project that cost more in both money and time. “We do research without a formal R&D department, but that does not satisfy those who make decisions about credit lines, because the evaluation is done by academics, not [those within] the industry,” Marinho says.CompetitivenessTo make innovation a source of competitiveness, Kupfer advocates replacing the traditional concept of sector — assets derived from similar production techniques — with market segment s and productfamilies. “Currently, productive activity is organized in a fluid and complex way, very different from what happened decades ago. Gone is the rigid concept of industry fixed to territory or a linear production chain from raw material to final product. This makes it more difficultto identify which field is experiencing competition, who are the competitors, and what should be the objects of our attention.” Kupfer is also concerned about sustainability. For instance, he says, “Brazil today has a natural competitive advantage, the availability of water, which is becoming scarce and therefore more expensive. Thinking about our advantage from the standpoint of sustainability means investing immediately in processes that reduce use of this resource for production.” Another sustainable advantage could be the biodiversity of the Amazon region. “Brazilian biodiversity will become our Silicon Valley,” Natura’s Marcelo Cardoso predicts, but he warns, “Today the law is unclear, the rules for accessing these extraordinary biological assets are confused, so we have trouble attracting investors and researchers.”Steps forwardNo public initiative to stimulate innovation will be successful, however, without a convergence of the interests of all the government agencies whose activities are relevant. “The great challenge facing the government in this new version of industrial policy,” according to Dyogo Oliveira, deputy executive secretary of the Ministry of Finance, “is to improve coordination of programs among the various ministries, with all that implies in

terms of reconciliation and management of cultures, and different habits and rituals.” Business expectations are focused on what will arise from the expected new government policy.A CNI document relates fiscal incentives to innovation proposals. Another measure, widely supported, is coordination of policies for innovation and exports. Iedi’s de Souza thinks that “In so doing, we can boost trade in high technology.... In many countries, export policies become a stronghold for innovative companies.” The new measures are expected to al low for exploitation of market opportunities as they present themselves. Natura’s Cardoso points out that with Brazil’s emerging middle class and a demographic dividend that means that in 30 or 40 years the economically active population will still outnumber those not working, there is an additional impetus for growth and social inclusion. He adds that “we have an advantage over many countries, with a clean energy matrix and well-preserved biodiversity. These factors are bigger than our limitations.” João Carlos Ferraz of BNDES notes that few areas provide as generous a space for the convergence of government, private, and social interests as innovation does: “Companies can compete and grow, and there are positive externalities , such as more qualified suppliers and customers. Employees have access to more and better jobs. And the government gets more tax revenues from the increase in wealth.” Kupfer of UFRJ believes all that is lacking now is political action to define which areas will receive more resources: “Innovation requires choice, but it has to be judicious and socially perceived as legitimate. If I have a passive economy that simply floats like a leaf on the ocean of global changes ... without a vision of the production system I want for the next 15 or 20 years, I cannot make technology policy.”

Reinventing InnovationBrazil has all the tools to stimulate innovation. What is needed now is to articulate policies,

reduce bureaucracy, and speed up the process.

Technological deficit in Brazil grows 28% on the first trimester 2011O deficit tecnológico comercial brasileiro cresceu 27,6% no primeiro trimestre, atingindo US$ 23 bilhões.É o que revela o primeiro levantamento da Protec (Sociedade Brasileira Pró-Inovação Tecnológica), que passará a divulgar as informações trimestralmente.O indicador analisa a relação comercial do Brasil com o exterior de produtos e serviços de alta e média-alta tecnologia, seguindo os parâmetros da OCDE (Organização para a Cooperação e Desenvolvimento Econômico).O grupo dos setores de média-alta tecnologia, que inclui a indústria automobilística, bens de capital e químicos, teve o maior saldo negativo, de US$ 10,9 bilhões."Os grupos de menor valor agregado vêm ganhando peso cada vez maior na pauta de exportações brasileira", diz Roberto Nicolsky, diretor-geral da Protec.Dos US$ 51 bilhões vendidos ao exterior no primeiro trimestre deste ano, quase US$ 19 bilhões foram de produtos não industriais e outros US$ 12 bilhões do grupo de baixa tecnologia, segundo o levantamento.No setor automotivo, o deficit comercial foi de US$ 1,5 bilhão, um terço do saldo negativo do setor em todo 2010.A Protec prevê deficit recorde para o final do ano, de cerca de US$ 110 bilhões, ante os US$ 85 bilhões de 2010.

Página 5 de 6

It is necessary to increase investments in innovation, says Min. Mercadante

Newsletter – S&T in BrazilNewsletter – S&T in Brazil Página 4 de 6

The WAS 2011 annual conference has been a very successful event which has attracted together more than 3000 participants.(https://www.was.org/WasMeetings/Meetings/SessionsByDay.aspx?Code=WA2011)EU SESSION AND EU BOOTH

The EU session was organized with the cooperation of RTD and the EU Delegation in Brazil and two FP7 projects: BBICE project and BIOCIRCLE 2. In addition to the FP7 session, an EU booth has been actively animated. Brazil cumulates an impressive set of assets for aquaculture development in the coming years, including availability of land and water, favorable climate, large number of native species, feed stuff and feeds (locally produced), large domestic market. It is likely that Brazil will be the next "success story" in world aquaculture. Among the main obstacles to this "promise" are included the insufficient knowledge and technology basis (and extension services) for the farming of native species, the administrative burden (licensing process etc), the difficulty in accessing to financial support for business development (production and processing), the lack of insurance for the sector, lack of organization among the producers etc.The Brazilian government is committed to the promotion of scientific research and the development of new technologies in aquaculture. A Ministry of Fisheries and Aquaculture (MFA) has been established recently (for the first time) in Brazil. The Minister herself, was present at the opening of the WAS 2011 meeting and her staff has animated a large stand and two sessions in the conference.During the event an informal meeting has been organized with staff of the MFA, the Director of the Aquaculture Department of the EMBRAPA, the EU Delegation in Brazil and DG RTD.

The Delegation of the EU in Brazil and UNESCO organised the seminar: Role of S&T in Prevention of Natural Catastrophes Conseguimos reunir um grupo de altíssimo nível para a discussão de um tema que interessa a nossas instituições e, principalmente, ao país. Fazer um especial agradecimento aos professores Carlos Nobre (MCT) e Paulo Barbosa (JRC) pelas excepcionais palestras ministradas que serviram de inspiração e estímulo para as nossas conversas durante toda a manhã.

Para acelerar a taxa de inovação e ampliar a competitividade da indústria, o Brasil precisa atrair projetos que garantam como contrapartida investimentos em pesquisa e desenvolvimento. A estratégia é fundamental para que o Brasil avance na produção de valor agregado, deixando de ser uma economia com forte base nas commodities. Entre os exemplos, Mercadante avalia a cadeia produtiva do petróleo e chama a exploração em águas profundas de "nosso sputnik", em alusão à declaração que presidente americano Barack Obama fez sobre a importância do programa espacial para a economia dos Estados Unidos.No Brasil, o desafio está em criar uma cadeia produtiva capaz de atender às demandas tecnológicas do pré-sal

Para ele, nos encontramos diante de um cenário perigoso: muito à frente de países pouco desenvolvidos na questão da inovação, mas nos descolando de forma perigosa dos outros emergentes, como China e Índia, Mesmo com um sofisticado sistema para fomento à inovação, o País ainda não consegue trazer competitividade para as cadeias produtivas. "Não dá para inovar sozinho. Mesmo que uma grande empresa aposte muito em pesquisa e desenvolvimento, vai esbarrar na falta de capacitação da cadeia produtiva", avalia Calmanovici.A Financiadora de Estudos e Projetos (Finep) tem mais de 60 instrumentos de fomento à inovação, que se transformaram em verdadeiro labirinto burocrático para obtenção de crédito.

Para dar mais agilidade ao sistema, o ministério quer transformar a Finep em uma espécie de banco. "A Finep será o grande agente da inovação no Brasil, com linhas diversas e que incluem até capital semente", conta Mercadante, afirmando que nos últimos três meses a entidade desembolsou R$ 1,4 bilhão para o financiamento de projetos.

UK and Brazil refinforce links in science and innovation : D. Willets UK Minister for Science and Universities visited Brazil in June to discuss cooperation.

O ministro esteve acompanhado de uma delegação de vice-chanceleres de universidades britânicas e do vice-primeiro ministro, Nick Clegg. Willetts visitou São Paulo e Brasília para encontros com o governo e representantes do setor privado para discutir a cooperação entre Reino Unido e Brasil nos setores de ciência, tecnologia e ensino superior. "O Brasil é um grande gerador de conhecimento científico e é cada vez mais importante para a produção global. O Reino Unido tem uma relação tecnológica importante com o Brasil e somos os segundos maiores parceiros em ciência," diz Willetts. "Espero que a minha visita ajude a aprofundar cada vez mais a colaboração entre os dois países em outras áreas, como o ensino superior." Em São Paulo, ele se encontrou com o diretor científico da Fundação de Amparo à Pesquisa do Estado de São Paulo (Fapesp), Carlos Brito. Eles discutiram a cooperação entre Brasil e Reino Unido na área de pesquisa e anunciam um prêmio focado no setor de segurança alimentar, bioenergia, e biotecnologia industrial. Em seguida, ele se juntou aos outros ministros no evento Reino Unido e Brasil: Parceria para Desenvolver Negócios Verdes e de lá visitou fábrica de etanol em Barra Bonita. Em Brasília, participou de mesa-redonda com reitores do Reino Unido e do Brasil, onde representantes de instituições de ensino superior britânicas se encontraram com os seus equivalentes brasileiros para discutir cooperação e como aumentar o número de estudantes brasileiros no Reino Unido.

Construyendo una UNION para la INNOVACIÓN

Angel LandabasoConsejeroDelegación de la UE en Brasilangel.landabaso@ec.europa.eu

Min. of S&T, Aloisio Mercadante

This workshop focused on the path to be followed in order to obtain innovative products from innovative materials. Special importance to the concept of Innovation: Material-Design-Application. Other topics of interest: Metrology, Durability and Resistance.The purpose of the workshop was consolidate the interactions between the researchers and other important players. Furthermore, the activities carried out during these days were performed in order to build contacts

Seminar on Innovation and SMES.

Newsletter – S&T in Brazil Página 6 de 6

Brazil’s institutional participation in the proposals approved by the FP7

Brazil’s institutional participation in the proposals approved by the FP7

Evolution of Brazilian participation in FP7The results of the Brazilian participation in the 7th Framework Programme show that the country continues to be the leader in participation in the region and reinforces its position balancing all the areas of FP7.The graphics above indicate the success rate and evolution of the projects with Brazilian participation increased from 24 in 2007 to 187 in May 2011 (5 months), covering all areas of all FP7 Programmes.

Leonor Collor – S&T Sector, EU Delegation in Brazil