Brazil looks to Israel for ways public policy, academia can spur economy

Visiting delegation seeks technology to help struggling country out of 2-year economic slump

Illustrative view of Rio de Janeiro, Brazil.
Illustrative view of Rio de Janeiro, Brazil.

Brazil, the world’s fifth-largest country and Latin America’s largest startup ecosystem, is looking to Israel to glean insights on how public policy can contribute to fostering innovation.

Marcos Pereira, Brazil’s minister of Development, Industry and Foreign Trade, led a delegation to Israel this week on a four-day trip that included startups in Tel Aviv, desalination plants and Hebrew University of Jerusalem labs.

“We are visiting some business organizations, some venture capital firms, and also the Israel Innovation Authority and the minister of the economy, to understand what is the second wave of public policy that Israel is developing now,” said delegate Marcos Vinícius de Souza, secretary for innovation and new businesses.

“We want to understand more about how the government is supporting these startups – what are the fiscal incentives’ design that are presented now, especially for angel investors. And also to understand the business acceleration process that you have here in Israel.”

While in Tel Aviv, the group visited SOSA, a shared workspace designed to connect technology startup companies with global entities that can use their products.

Brazil's Marcos Pereira, minister of Development, Industry and Foreign Trade speaking in Tel Aviv on June 25 (Micah Danney/Times of Israel)
Brazil’s Marcos Pereira, minister of Development, Industry and Foreign Trade, speaking in Tel Aviv on June 25 (Micah Danney/Times of Israel)

The trip coincided with the launch of the fourth round of calls for proposals in a program to promote joint ventures in research and development between Israeli and Brazilian firms. As part of the new initiative, firms can jointly apply for R&D funding from their respective government, according to Daniel Kolbar, consul for economic affairs in Israel’s embassy in Brazil. Kolbar accompanied the Brazilian delegation at SOSA and led a roundtable discussion.

Israel and Brazil have already signed an agreement to enable cooperation: the accord allows Brazilian companies to work with Israeli counterparts, who are familiar with local regulations, and it will help open up new opportunities in Brazil for Israeli firms, Kolbar said.

Brazil is looking to high tech industry and Israel as a model, as its economy struggles to stabilize after suffering the worst recession in its history over the last two years. The Brazilian economy is likely to grow at a slower pace than expected in 2017, Finance Minister Henrique Meirelles said on June 28. The country has the eighth-largest economy in the world, by projected gross domestic product, and is the biggest in Latin America. But it has the slowest growth rate there outside of Venezuela. Also this month, Brazil’s President Michel Temer was indicted for corruption.

De Souza told The Times of Israel that Israel has models that could help Brazil address one of its main economic challenges: implementing knowledge from the academic world into the market. He said he was impressed by the flexibility Israeli universities have in making connections with investors and creating funds for research.

“We were really impressed with what they are doing,” he said. “About how to bring venture capitalists, how to bring mentors, how to bring companies from all over the world in order to make joint research, and also to commercialize the research.”

Brazil delegation visits SOSA in Tel Aviv, June 2017 (Micah Danney/Times of Israel)
Brazil delegation visits SOSA in Tel Aviv, June 2017 (Micah Danney/Times of Israel)

De Souza said Brazil would need to change certain regulations in order to adopt such models, and would also need to change the mindset in academia toward being open to working more closely with private industry. He said he liked the idea of universities having equity and acting as investors in startups that use the technology they develop.

“It’s really an innovative model that we saw here in Israel,” de Souza said.

Brazilian manufacturers also need to better understand the importance of new technologies, delegation members said at the event.

Two Israeli startups based in Tel Aviv and part of SOSA’s network presented their technologies, with suggestions on how they could be used by companies in Brazil.

A representative of Visual Factories explained how her company’s hardware saves manufacturers money by attaching to machinery to record measures of productivity. This allows management to identify waste in the production process and suggests things that can be improved.

And an official at Atomation explained how her company’s platform for sensors, mobile devices and a data cloud monitors the condition of physical assets. It has been used to detect when utility poles were weakening, for example, so that they could be replaced before breaking and causing further damage.

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