Interview: the importance of private institutes for the development of technologies in Brazil

Technological advancement is one of the main drivers of a country's economic and social development. In Brazil, however, the research and innovation sector is still largely supported by public institutions, while private institutes face structural and financial challenges to consolidate their role. The experience of the Advanced Institute of Technology and Innovation (IATI) illustrates the relevance of these institutions in the national scenario, while exposing the difficulties and opportunities for their expansion.

The challenges of private innovation in Brazil

The lack of a robust ecosystem of private technology institutes in Brazil is mainly due to the lack of continuous funding. According to Paulo Gama, an expert in the field, research in the country is largely conducted within public universities, with government support, while multinational industries tend to develop technology outside Brazil.

In addition to the scarcity of resources, private institutions face a high dependence on tax incentives and government policies, which makes them vulnerable to regulatory changes. Laws such as the Lei do Bem, which grants tax incentives to companies that invest in research and development, have restrictions that limit their scope. Gama suggests that expanding these incentives to companies under the Presumed Profit and Simples Nacional regimes could stimulate new investments in innovation.

The strategic role of private institutes and their sources of funding

Despite the challenges, IATI stands out as a successful example of a private institute committed to technological innovation. Its activities cover strategic sectors, such as renewable energy, biotechnology, smart cities, electric mobility and energy storage, consolidating itself as a reference center for low-carbon hydrogen in Brazil.

To make its research viable, the institute uses several sources of funding, including ANEEL's RDI Program, partnerships with private companies and support from development agencies such as FINEP and BNDES. In addition, it seeks to expand its operations through international cooperation, attracting new investments to the country.

The strengthening of private research institutes depends on more efficient public policies, expanded tax incentives and greater participation of the business sector in financing innovation. With a more favorable regulatory environment and strategic investments, Brazil can consolidate its technological potential and reduce its dependence on imported innovations.

Check out the full interview with Paulo Gama, IATI's business director, below:

RadarH2: In your opinion, why do we not have many private technology development institutes in Brazil?

Paulo Gama: One of the biggest challenges for a private research institution in Brazil is related to the sustainability of maintaining resources for research, development and innovation. In Brazil, most research and development is done in public academia, funded by the government. Private research takes place within industries, and when they are multinationals, most of the time, they research and develop technology outside the country, not investing in Brazil.

The fact that we do not have many private institutes is centered on the lack of continuous and permanent resources that can make research, development and innovation viable. Innovating is expensive and maintaining a physical structure and highly qualified professionals for research, development and innovation is not cheap. Private institutions almost always seek resources from legal obligations, laws that encourage or oblige companies to invest in R&D&I and thus manage to remain, with considerable fluctuation, within the market. There are few institutions that develop a business that, with a stroke of the pen, can change its course.

RadarH2: What are IATI's main motivations, that is, what keeps you so motivated all the time?

Paulo Gama: IATI has a noble purpose that is related to the preservation of life, understood here in a broad sense. This mission motivates researchers who develop projects aimed at decarbonization, improving the quality of life of living beings, and the environment, with a focus on innovation that can be applied and not just researched or developed. The challenge of finding new things, creating innovation, and seeing the results being used keeps us alert and motivated most of the time.

RadarH2: What do you consider to be obstacles to research and technological development by the Brazilian private sector, and what would you propose in terms of changes in the institutional environment to increase investments in RDI in the country?

Paulo Gama: As obstacles, we can point to the Lei do Bem legislation, which, although it exists, is complex and restricted only to companies with Real Profit. We could extend the application to other companies under the Presumed Profit or Simples Nacional regimes, after all, they generate wealth and value for the country. Another approach would be to prevent certain laws from diverting research resources to applications with different purposes, as is the case with Law 9.991/2000, which is cut up by each government, in such a way that resources, which are already scarce, end up being directed to interests other than the purpose for which they were created.

A good example would be to use the ANP mechanism for research, which, in addition to accrediting research institutions, has rules based on concession contracts, authorizations or other obligations, preventing the legislator from diverting the purpose of research by the private sector, thus contributing to research, development and innovation in the country. In addition, creating new legal obligations for investment in R&D&I for companies in essential sectors, such as health, basic sanitation and civil construction, will allow for an increase in the supply of resources for R&D&I.

RadarH2: What are the sectors in which IATI operates?

Paulo Gama: The Advanced Institute of Technology and Innovation (IATI) acts as a national reference in the execution and management of Research, Development and Innovation (RDI) projects. Its main sectors of operation include:

Renewable Energy – Projects focused on solar, wind, biomass and, mainly, Low Carbon Hydrogen, with IATI being one of the main Brazilian research centers in the area.

Biotechnology – Development of sustainable products, such as biocellulose and biodetergents, in addition to applied research into new ecological materials and industrial processes.

Smart Cities – Technological solutions for smart urban infrastructure, including mobility, energy efficiency and environmental monitoring.

Electric Mobility – Projects to encourage the use of electric vehicles, such as Trilha Verde, in partnership with Neoenergia and the Government of Pernambuco.

Energy Storage – Development of battery technologies and new energy storage solutions, increasing the reliability and efficiency of electrical grids.

In addition to these areas, IATI stands out for its innovative projects, such as the use of drones to inspect power transmission lines, the development of towers for treating industrial effluents, and advanced research in the oil and gas sector.

RadarH2: What are the main sources of funding that IATI has used to develop its work?

Paulo Gama: IATI has used several sources of funding to develop its projects, with emphasis on:

ANEEL's RDI Program – The main source of funding for projects aimed at the electricity sector, regulated by the National Electric Energy Agency (ANEEL). IATI actively participates in this program, conducting innovative projects in renewable energy, electric mobility, energy storage, and low-carbon hydrogen.

Partnerships with Private Companies – The Institute collaborates with companies in the energy, oil and gas, biotechnology, and information technology sectors to develop innovative and sustainable solutions, promoting knowledge transfer and open innovation.

Support from Development Agencies – IATI seeks resources through institutions such as FINEP (Financier of Studies and Projects) and BNDES (National Bank for Economic and Social Development), in addition to other programs to encourage technological innovation.

Public Agreements and Notices – The institution participates in public calls and notices to promote research and innovation, in partnership with federal and state government agencies, strengthening its role in scientific and technological development.

International Projects and Technical Cooperation – IATI also seeks cooperation with foreign entities and international programs focused on innovation and sustainability, as a way to increase the impact of its projects and bring new investments to Brazil.

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Paulo Gama holds a PhD in Electrical Engineering from the University of São Paulo – USP. He has been a consultant in research, development and innovation for more than 40 companies in the electricity sector, including Power Generation, Transmission and Distribution. He is the Business Director at the Advanced Institute of Technology and Innovation - IATI, where he faces challenges related to the expansion and application of R&D&I results in the market.