ABSTRACT
This chapter examines Brazil’s industrial and innovation policies in the context of the country’s engagement with global value chains (GVCs). Engaging with GVCs may allow developing countries to capture production-related investments while being excluded from R&D and technology development. Industrialization might be rapid, but it is “thin,” fostering only limited engagement with the country’s system of innovation. This chapter examines Brazil’s evolving role in industries that are entirely (or almost entirely) organized around domestically owned companies like garments and bioethanol, those that are driven by domestic lead firms and global suppliers like oil and gas, biopharmaceuticals, and aerospace, and those that are largely global in nature like the automotive, electronics, and medical device industries. Brazil has sought to “trade markets for technology” in several industries dominated by foreign lead firms and/or suppliers. This chapter suggests that while these policies have fostered greater R&D investment and have created some positive externalities, Brazil’s engagement in technology-intensive industries remains limited.
