How Innovation and Intellectual Property Protection Can Help Brazil’s Economic Crisis

Lapa steps

After reporting two consecutive quarters of decline in growth, Brazil is officially in a recession.

Needless to say, the population has been anticipating this for months, and has expressed all its disappointment with huge demonstrations across the country. For those who have visited the country recently, Brazil hasn’t been characterized by its happiness, but instead by its bad mood and nervousness.

Explaining all the factors that has led to this problematic situation it is not an easy task, but some aspects of this economic turning point have been being debated by specialists. Some of the reasons that Brazil’s economy is down in the dumps:

  1. Corruption in all levels of power, which leads to a generalized suspiciousness in Brazilian politics by its citizens;
  2. Brazil had been relying on its exports to China since 2009, which doubled its total exports. The scenario has changed after a significant decrease in demand from China and Brazil is now suffering from an abrupt shrink in profits;
  3. Brazil’s high inflation and lack of spur on investments results in less productivity.

Currently, Brazil is the 7th largest economy in the world, but it is ranked in 95th GDP per capita. Furthermore, Brazil has the worst economic performance amongst its counterparts, i.e. the other BRIC countries of Russia, India, and China.

On the intellectual property front, when comparing patent applications, China remains at the top, despite facing a wave of economic slowness. India and Russia follow the same pattern and continue to be in front of Brazil.

Innovation, Patents and Commercialization of Intellectual Property: More Than Just Buzz Words?

Once solved, this third aspect is also the key to strengthen the economy and leverage population living standards and intellectual propriety is strongly linked to the solution.

 

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By analyzing the number of concessions granted in both trademarks and patents during 2013, 2014 and 2015 (until July), it is possible to conclude that:

  1. There was a great improvement in trademark filings in Brazil in 2014 that possibly is not going to be repeated, or beat in 2015.
  2. The number of patents grants has decreased. Since new patent filings and grants also measure a country’s innovation capacity, Brazil’s rate of innovation has decreased slightly, too.

By increasing incentives to a new culture of innovation, Brazil will be able to pass through to the crises without irreversibly harming its population. Instead of exporting raw materials, which are less profitable, Brazil must invest on more sophisticated products and the most efficient way to accomplish it is to invest rapidly in innovative technologies to increase production.

Producing tech goods means investment in high quality education, which is still a major issue for Brazil. Although it is ranked on the tops entrepreneurs by the GEM – Global Entrepreneurship Monitor, its education and training facilities were cited as ‘constraints (61%) and enablers (23.8%) by experts’.

The creation of the next entrepreneur generation depends on a long-term restructuring of the whole educational system. For now, Brazil needs to rely on its creativity in order to increase productivity and escape from the worst consequences of recession. An important measure is how many patents are granted and a raise in this line might represent a better life for Brazilians.

Graph: Samia Trautvein
Image: Santa Teresa steps, Rio de Janeiro. Image Source: vicentraal, Flickr Creative Commons

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About: Samia Trautvein

Samia is Law graduate from Mackenzie University, in São Paulo, Brazil. Her passion and also work background is Tax Law and all the areas related to it, specially Business Law and Intellectual Property. She loves how knowledge can spread through the internet and that is why she is glad to write here.

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