Bridging the Gap: How Do You Encourage Brazilians to Be Entrepreneurs?

Originally published on February 21, 2012

Version available on the Web Archive

Eight years ago, José Fernando Perez, then a physics professor at the University of São Paulo (USP), asked his students: “Did you know that many students at MIT have trouble completing their doctorates because they are so preoccupied with their own companies? And what about you? How many of you have ever thought about opening up your own business?” The students gave him puzzled looks.

That year, Perez left USP and his position as scientific director of the Research Foundation of the State of São Paulo (FAPESP) to found Recepta Biopharma, the first – and so far the only – Brazilian company to conduct Phase 2 clinical trials of a cancer therapy. “There is no culture of entrepreneurship in our universities,” explains Perez. This applies to the professors as well. “In the U.S., some professors leave research institutions or universities when they discover something that has the potential to become a competitive product. This is how many so-called startups arise. They provide tremendous economic momentum and drive innovation. In Brazil, very few would dare leave their university posts,” says Peres, who proved an exception to the rule.

The gap between academia and industry in Brazil arose out of political turmoil. An overview of science in Brazil published in December 2010 in the journal Science, suggests that Brazil’s military dictatorship from 1964 – 1985 was the root cause of the universities’ aversion to private enterprise. Over the decades of military rule, universities became strongholds of political opposition and Marxist thought. As Maria Bernadette Cordeiro de Sousa, the Dean of Research at the Federal University of Rio Grande do Norte, explains, “we isolated ourselves from large companies which supported the military. They were not allowed to access universities, which became closed-off spaces. This needs to change.”

The distance between private enterprise and universities is a concern to government too.

Ronaldo Mota, who has been the national secretary for Technology Development and Innovation at the Ministry of Science and Technology since 2009, laments that “the main goal of the brightest students in Brazil is often to win a public tender.” Mota believes that, “if the state invests in people with only this goal in mind, the future will be a disaster. The focus should be on young people who are willing to take risks and become entrepreneurs,” he says. Driven to act, Mota will soon take a post at the University of London where he plans to research how to foster entrepreneurship in students.Mota, who has taught at the Universidade Federal de Santa Maria, recalls that “entrepreneurship” was once considered a dirty word in academia. “The stigma has not entirely disappeared, although it has improved a lot,” he says. “Today, the owner of a large company may be invited to speak to students at a public university.”

The problem, explains Paulo Mol, the executive manager of Industrial and Innovation Policies of the National Confederation of Industry, is that researchers and companies have different agendas.

University researchers are usually focused on basic research and often don’t consider the market value of their discoveries or even their future application. He believes that “any serious investment in innovation should aim to impact the productive sector.” But the current mechanisms are tied to how the world of academia works. For example, Finep (the body that finances innovation in the private sector, together with the National Bank for Social and Economic Development) often announces bids for tenders (or public contracts), which is a very common mechanism in the university research sphere, but not in the business world.

But Carlos Henrique de Brito Cruz, scientific director of FAPESP, one of the major public agencies funding research in Brazil, believes that industry must also participate. “The problem is that companies often do not invest in research and development centers,” says Brito Cruz. He believes, however, that the problem is not just a cultural one: the macroeconomic environment in the country, with its overvalued exchange rate, excessive tax burden, and high levels of bureaucracy, inhibits investments in innovation. Mol agrees: “It is cheaper to open a research and development center in France than in Brazil.”

But there have been some breakthroughs. At a research symposium in 2005, Osvaldo Augusto Sant’Anna, a researcher from Instituto Butantã, presented the preliminary results of a study on the use of nanostructured silicon as a vehicle for administrating vaccines. Pharmacologist Regina Scivoleto, who had retired from University of São Paulo, was in the audience. Regina had a clear idea of the abyss that separates research on product development in the country and she spoke to Sant’Anna after the lecture and promised to put him in touch with Cristália Laboratory. She fulfilled her promise. The President of Cristália, Ogari Pacheco, laughs when recalling Sant’Anna’s surprise when he learned that Ogari’s company would finance the project. “Sant’Anna had already knocked on many other doors before, to no avail.”

Collaborations like the one between Sant’Anna and Pacheco are becoming increasingly common. “The current picture of Brazilian science is still not good enough … the actual data do not indicate an explosion of innovation, ” says Mota, the secretary for technology development and innovation. “But we are already noticing a change.” He cites, for example, the increase in the annual volume of credit line funds in the FINEP, from a little more than $1 billion two years ago to the current $5 billion. “But the demand for funding is still greater than the supply. We must remember that the picture we have before our eyes is just a movie frame and we still don’t know how it will end. But there are reasons to believe that there may be a happy ending.”