Entity reiterates the importance of a clear strategy and good governance to drive modernization and diversification of the industry in the face of the digital revolution
The world is experiencing a moment of valorization of industrial policy. The topic is particularly dear to major economic powers due to the opportunities and challenges related to the fourth industrial revolution – the so-called Industry 4.0 – and who wants to lead this movement. Thus, it is essential that Brazil build an industrial policy that aims to structurally change production – with diversification and sophistication of what is produced in the country – combined with increased productivity in the economy, defends the National Confederation of Industry (CNI).
“It is not just a package of incentives and subsidies. Industrial policy has changed and has been used by Germany, China and the United States, for example, to develop industrial segments and specific technologies. The emergence of Industry 4.0 itself is an example of this. The international experience leaves no doubt that only improvements in the business environment and horizontal policies to encourage research and development, despite being essential, are no longer sufficient when the industry's competitiveness is at stake", says the president of CNI, Robson Braga. from Andrade.
MARKET FAILURE – In the unprecedented study Criteria for a new industrial policy agenda, the CNI demonstrates that in these countries the policy is used to correct market failures, in which the presence of the State is needed to coordinate efforts or stimulate the development of new activities, and they do so. using different instruments, depending on the challenges that the policy proposes to overcome.
A particularly important coordination failure for Brazil is rural connectivity. There is no point in developing agricultural machines, software and sensors if there is no broadband in the field. At the same time, no company will invest to bring broadband to remote rural areas if there is no expectation of return. The State, in this case, can act as a coordinator, so that the necessary investments are carried out simultaneously, ensuring that sectoral regulation makes new activities viable and taking other measures that are necessary to make the investments involved viable.
The CNI also recognizes that planning and executing industrial policies in Brazil is a more difficult task because the country has not yet resolved systemic obstacles to competitiveness that create a limiting business environment for industrial policy to fulfill its role.
"Industrial policy must promote a structural transformation. This means the development and absorption of new technologies, modernization of the form and result of production, with products with greater added value. president of the CNI. For this, based on the analysis of how successful policies were implemented abroad, the study brings governance recommendations to ensure that industrial policy is properly conducted and achieves objectives aligned with the national interest.
RECOMMENDATIONS – Among them, the main ones are the creation of an institutional articulation instance between the various public bodies involved in the planning and execution of policies, as well as a high-level instance that maintains permanent dialogue with the private sector for the precise identification of problems and opportunities for the application of industrial policy; establishment of clear and measurable goals, with a monitoring system that identifies failures and promptly promotes adjustments; adoption of temporary and specific instruments; transparent management; and establishment of counterparts by the private sector, compatible with the instruments and duration of the stimuli proposed by the policy.
The main recommendation is that good industrial policy is not born with the choice of a set of instruments. It is born from a strategy, which identifies objectives and, from there, establishes the necessary mechanisms to achieve them.
DOWNLOAD – Access the full document Criteria for a new industrial policy agenda.
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