The Brazil Case: Innovation and Subsidies to Companies
Economic support to small and medium-sized enterprises is a fundamental pillar for the development of innovative projects that optimize the Brazil’s productive structure.
Several laws in Brazil provide for the granting of economic subsidies to small and medium-sized enterprises for high-impact projects, especially in the area of technology. This aid seeks to encourage research, development and innovation activities in the business sector, according to the study “Business Development in Brazil.”
There are two types of economic subsidies to companies: one based on the Innovation Act and one based on the Law on Goods. The Innovation Act subsidy provides for cost financing, such as personnel, raw materials, third-party services, patents and property renovations for innovative activities.
The subsidy provided for in the Law on Goods aims at remuneration of researchers to be hired by the company.
The funding modality calls for 40% of the monies of the National Fund for Scientific and Technological Development (FNDCT) for the subsidy to be allocated to SMEs that have a significant impact on the productive structure and promote innovation-based entrepreneurship. One major criticism of this type of instrument is the inherent risk in “picking winners" policies. Subsidies are also snubbed for involving high management costs and technical training of agencies as a requisite to provide this support.
The total amount offered by the economic subsidy program of the Financier of Studies and Projects (FINEP) ranges from R$500,000 to R$10,000,000. The Innovation Act establishes that the granting of a subsidy requires the beneficiary company to submit a trade-off proposal.
CAF's more recent content
![CAF, JICA and Sicredi join forces to support women and rural producer CAF, JICA and Sicredi join forces to support women and rural producer](/media/4669796/foto_sicredi_divulgação_310724.jpg)
CAF, JICA and Sicredi join forces to support women and rural producer
The amount represents the largest international facility ever undertaken by Sicredi, with the involvement of four internationally renowned entities: Banco Finantia, BNP Paribas, Eco.business Fund, and Sumitomo Mitsui Banking Corporation (SMBC). The funds raised can also be used in regions with a Human Development Index below the national average.![CAF-FAO: Digitization project for agribusiness with repository launch CAF-FAO: Digitization project for agribusiness with repository launch](/media/4669830/caf-fao.png)
CAF-FAO: Digitization project for agribusiness with repository launch
The Food and Agriculture Organization of the United Nations (FAO), CAF -development bank of Latin America and the Caribbean-, the Ministry of Agriculture, Land and Fisheries and the Tobago House of Assembly celebrated the successful completion of the “Digitization and Innovation for the Competitiveness and Sustainability of the Agribusiness Sector in Trinidad and Tobago” project. The closing ceremony, that took place on the 29th of July, marked a significant milestone in the country's efforts to modernize and enhance the agricultural sector.![CAF at the Mexico-European Union Forum: transformation of sargassum CAF at the Mexico-European Union Forum: transformation of sargassum](/media/4669724/cooperacion-interdisciplinaria.jpg)