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Research in State-Owned Corporations in Brazil

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Brazil Research in State-Owned Corporations

Research in State-Owned Corporations
About 10 percent of the public investments in research and development in Brazil are made by a small group of state-owned corporations and holdings in the fields of telecommunications, oil, electric energy, mining, metallurgy, and aeronautics. Several of these corporations have created their own research and development centers, the best known being Petrobrás's Research and Development Center (Centro de Pesquisa e Desenvolvimento--Cenpes), Telebrás's Research and Development Center (Centro de Pesquisa e Desenvolvimento--CPqD), Eletrobrás's Electric Power Research Center (Centro de Pesquisas de Energia Elétrica--Cepel), the Technology Center (Centro de Tecnologia) of the Rio Dôce Valley Company (Companhia Vale do Rio Dôce--CVRD), and the CTA (Aerospace Technical Center), associated with the Brazilian Aeronautics Company (Empresa Brasileira Aeronáutica--Embraer), the state-owned aircraft manufacturer.

At their best, these research centers are linked with the companies' suppliers and are responsible for establishing standards of quality and providing technical know-how. They also communicate with other research and development groups in government and universities in order to exchange ideas and information and bolster professional competence. These research centers played important roles in the 1970s and early 1980s. They saved foreign currency that would have been spent on technical assistance and royalties, improved their companies' operational capabilities, better utilized Brazil's natural resources, strengthened the private sector's competence, and provided resources to universities through research contracts and programs of technical assistance and training.

The oldest and largest of these centers is Cenpes, which, under different names, has existed since the creation of Petrobrás in the mid-1950s. Cenpes's most significant achievement was the development of state-of-the-art technologies for deep-sea oil drilling, in association with Coppe at the UFRJ (Federal University of Rio de Janeiro) and several other Brazilian universities. Cenpes, which is located on the UFRJ campus, maintains links with research institutions in the United States, Britain, and other countries and provides research services for other clients. Nonetheless, the proportion of resources spent by Petrobrás on research and development is significantly lower than the international average for large oil companies. In 1994 Cenpes had 1,656 employees. Its annual budget has ranged from US$134.2 million in 1987 to US$102.7 million in 1991, which corresponds to a figure of between 0.5 percent and 0.8 percent of Petrobrás's gross revenues.

Telebrás's research center, the CPqD, has played an important role in setting the standards for Brazil's telecommunication systems. Foreign companies in Brazil are requested to adopt these standards, local companies receive support to train personnel and to develop technological competence, and the government guarantees the purchase of products that meet Telebrás's standards. The consequence has been the creation of several dozens firms linked to the Telebrás system and protected from competition. The CPqD's budget is around US$50 million a year, and it has 1,200 employees.

These research centers usually are much better endowed with equipment, staff, and resources than research groups in universities and academic institutes. However, because they are shielded from outside review and from financial constraints, it is uncertain whether their performance is commensurate with their costs. Because of economic stagnation, their budgets were reduced in the late 1980s, and lower salaries led to the loss of their best researchers. In the new environment, they have been compelled to redefine their functions in two ways. First, they have had to stay much closer to the direct operational needs of their institutions and forsake long-term and technologically more ambitious projects; second, they have had to look for independent sources of support, whether by selling their services or by establishing associations with the private sector and other research and development institutions. Privatization has led to the shutdown of some of these research groups, as happened in some steel companies.

Data as of April 1997



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