Podcast Transcript: Tapping Brazil's massive S&T potential
Featuring Ted Hewitt, Executive Vice-President, Social Sciences and Humanities Research Council of Canada
There’s no doubt that Brazil is one of the world’s most enticing markets, boasting a stable economy and a dynamic, innovative science and technology industry. Economically secure, with a vast and well-educated workforce, Brazil offers Canadians an attractive investment environment with room for substantial growth.
The potential is enormous. Brazil’s economy is quickly shifting towards advanced manufacturing, technology and innovation-based activities.
So what will it take for innovative Canadian companies to take advantage of this potential?
Well, according to some, it’s all about relationships. We’ve all heard that before and we know this to be true but what is the right way for Canadian companies to build business relationships in Brazil?
With me to answer that very question is Ted Hewitt, Executive Vice-President of the Social Sciences and Humanities Research Council of Canada.
Thanks for being with me today Ted.
Ted Hewitt: You're very welcome. Happy to be here.
Michael Mancini: So tell me, how should Canadian companies build the kinds of relationships in Brazil that will give them a viable future in this massive emerging economy?
Ted Hewitt: If you look back over the last, say, five or ten years, one of the key issues has always been — and you still hear this to some extent today — that companies have a great deal of difficulty in linking to the opportunities that they would like to pursue in Brazil, whether that's export markets, joint ventures, even acquiring Brazilian companies, because they just don't know who to talk to. The Consulate and the Embassy provide excellent services in this regard through the Trade Commissioner Service in particular. But the fact is companies have a wide range of interests, and they need to contact a wide range of individuals.
Today, thanks to some of the activities that the Joint Committee has managed to promote across Brazil and in a variety of sectors, it now has direct contract to the business sectors in which they seek to operate, whether that be in the life sciences, in biotechnology, ocean science, nanotechnology, information and communications technology, or green energy and clean technology, which are among the hottest sectors, as you know, in both Brazil and Canada.
Michael Mancini: Now, you just referred to a Joint Committee. What is that exactly?
Ted Hewitt: The Canada-Brazil Agreement, or Framework Agreement for Cooperation in Science, Technology and Innovation was signed in 2008, and it was ratified a couple of years later. And one of its key provisions was the formation of a joint committee between Canada and Brazil for the promotion of interchange and exchange in science, technology and innovation. So not just universities and academics, but business and also government. And since that time, since its first meeting in 2011, after the agreement was ratified, the Committee has worked very hard to develop key sectors, as I mentioned, for exploitation between Brazil and Canada, and also to create working groups which would facilitate activity, but more importantly, for the purpose of this discussion, to put companies directly in contact with other companies and/or other types of contacts in Brazil, or program opportunities that are going to allow them to develop their best strategy they need to develop to enter the Brazilian market.
Michael Mancini: Now, you said it's a challenge for companies to meet the right people. Why is that a challenge in Brazil?
Ted Hewitt: Well, in part, even though we live in the same neighbourhood that you might call the Americas, Brazil has not traditionally been a destination, a market, for Canada. It's not traditionally been a place where Canadian tourists will visit. So the level of familiarity is actually quite low. Many Canadians know Spanish. They've been to Mexico or the Caribbean. Very few are fluent in Portuguese, and Brazil is a country where it remains, in my view, still extremely important to be able to communicate in the local language and to understand the culture. So I think that, in some ways, has inhibited interaction between companies and opportunities in Brazil. I think that we still have some ways to go, and this is exactly how the Joint Committee structure can help.
Michael Mancini: How does the work of the Joint Committee complement what we know the Canadian Trade Commissioner Service in Brazil already does? I mean, you know, we already help Canadian companies connect to the right people. How does this play into it all?
Ted Hewitt: It serves, in a way, as a means for amplifying and extending the kinds of contacts one would normally be expected to make through the Trade Commissioner Service, and — which does a tremendous job, by the way — by bringing into play far more groups, individuals, opportunities than might otherwise be available. So just as an example, within the area of information and communications technology, that's one of the key areas that the Joint Committee has determined as a focus for Brazil-Canada interaction across the sectors, as I mentioned, and with the express objective of developing products, services, opportunities that will lead to the commercialization of ideas or technologies to the benefit of both countries. And that's a key aspect of this endeavour. So within one of these groups, we've established a working group with key players in Canada and in Brazil, some representatives from the respective ministries responsible for ICT in the two countries, third-party organizations like the Canadian Visual Media Network for example in Canada, and, as in the case of the other working groups, representatives from industry to provide that perspective on the potential utility of these types of interactions.
So as a concrete result of this, one of the activities that has been well exploited to date is something called — or was initially called — Canada 3.0. It's a huge conference that's been held alternatively in Stratford and most recently in Toronto. It attracts researchers, businesses, government from across the sector in Canada, and now has been expanded to a Canada-Brazil format. This gives them an opportunity across the sectors to meet with, talk to, develop relationships with people who count, whether that be potential joint investors or government officials responsible for market regulation and access, or those who could assist with developing concrete investment opportunities.
In one case, for example, there’s a program that would see incubators, of which there are hundreds in Brazil, link to incubators in Canada with a particular focus on ICT in order to provide landing pads for Brazilian companies in Canada so that they can grow and enhance their business. And then also, in reciprocity, for Canadian companies, particularly start-ups, to find a home in incubators in Brazil, where they can similarly work with other like-minded companies and avail themselves of opportunities within these incubators to enter the Brazilian market. So it's actually, you know, a very effective way to bridge that gap, create those relationships in a safe environment, where one is pretty much in collaboration, constant contact with all of the key folks who can make one's business a success in the other country.
Michael Mancini: Now, this is all very interesting. And as a note to Canadian companies, I'll be posting all the links to these various initiatives on the CanadExport website, so you'll have one easy place to get all this information. What kinds of companies should be part of this kind of initiative exactly? Who are you looking for?
Ted Hewitt: Well, I mean, let's face it, Canada and Brazil have a long history of trade and investment at a very high level, in the sense that large companies have long been involved in each other's economy. In my view, the critical opportunities are in fact directed to small and medium-sized companies that can best avail themselves of the kind of relationship building opportunities and funding and exchange - research exchange opportunities available through the Joint Committee and through its working groups, where they can participate actively in discussions, participate in the working groups, and most certainly participate in the events that are being organized almost monthly in Canada and Brazil across the four working groups.
Michael Mancini: Now, we started this conversation talking about relationships. What is it about Brazil exactly that makes cultivating those relationships particularly important? And what does that look like for a Canadian company?
Ted Hewitt: Well, I would say that it's not uniquely Brazil. And I think anyone looking to do business in other countries has to cultivate relationships. I think the fact is, though, that here in Canada, when you're looking at China or India or even Malaysia, there are large diaspora communities, there are opportunities even without leaving Canada that can help develop relationships for companies in those markets. That's much less true in Brazil. The number of Brazilian immigrants, for example, in Canada is fairly limited, far less even than much smaller countries like Portugal, which would have maybe 20 times the number of immigrants in Canada to help create those opportunities. So I think that makes for a significant difference in terms of how one makes the approach. It's just difficult to find people who can make connections in Canada for Brazil.
In terms of taking advantage of opportunities or using our structure and other opportunities to create relationships, there's just some amazing initiatives that are currently underway between the two countries that can just facilitate this greatly. We talked about, for example, the working group structure of the Joint Committee. And working groups either plan or help to facilitate events, so joint meetings of researchers and companies and government are held to talk about everything from interactions or trade in medical devices to electrical generation equipment, etcetera, on a regular basis.
Other programs now just getting underway provide similar opportunities in a slightly different way. One is the Science Without Borders Program, in which Canada recently agreed to participate, and will accept up to 12,000 fully paid Brazilian students at the undergraduate, Master's and PhD level. Under this program sponsored by the Brazilian government, tens of thousands of students will travel worldwide in order to take advantage of opportunities to study outside Brazil, and then to take that knowledge, that experience and expertise back to Brazil and use that to develop economic opportunities.
I can tell you that here at our agency, Social Sciences and Humanities Research Council, we had an opportunity to bring on four interns. We managed to secure one, because it's a competitive process. She worked in our Communications Department in the summer. We created a link to her that will serve us well into the future as we work with Brazilian funding agencies to develop programs, because she will be returning to Brazil. She has expertise now in communications, and work experience. She will work in the sector, and I have no doubt that we'll be able to call on her in future when we need to develop those relationships. And I think for any company that takes the time and makes the effort to take on these interns, they're going to have a ready-made cohort of ex-employees who've gone back to Brazil with whom they'll be able to interact and mine in terms of their relationships once they return to Brazil and they take on what everyone expects to be, given their education and experience, top jobs in every sector - government, academic and business.
Michael Mancini: More details on the opportunity to host Brazilian students and researchers can be found on the website of the Canadian Trade Commissioner Service in Brazil under the Studying in Canada section.
Can you tell me a little bit about, just to switch gears to the Trade Commissioner Service, the innovation support guide?
Ted Hewitt: Well, you know, this is a key piece with respect to how Canadian companies might best explore entering the Brazilian market and what strategies work well, and how to develop some of the relationships that we were discussing and get access to various funding and other types of opportunities within Brazil and with Canada. It really helps Canadian companies better understand the innovation environment in Brazil, particularly those who are working in the S&T sector, and how they might be able to tap into programs.
So for example, we talked about the Brazilian start-up program, which is a multi-million, potentially billion-dollar program to fund start-up companies that are looking to locate in Brazil. There's information on how to effect collaboration with researchers and funding agencies in Brazil, should research and R&D form a key part of what needs to be done to fully exploit entry into the Brazilian market. And we find that that's increasingly the case, just simply because this is a different opportunity, and Brazil has, to some extent in the past, been very keen on latching on to products and services and so forth that can be best tuned to the requirements of the Brazilian market. So typically companies need to do some R&D, whether it's just simply market research or business planning, but also product development, service development, in ways that are best suited and best aligned with the expectations of Brazilian companies, and particularly Brazilian consumers. And the guide can help, I think, companies understand how to make those connections from a broad perspective.
Michael Mancini: Now, on a final note, what advice would you offer companies in the S&T sector looking to Brazil? What would you say to them?
Ted Hewitt: Well, I mean, I do get quite a few calls from companies — as I did the other day in the medical device sector, or medical administration sector — to understand, “how do I do this,” or “I have a new product that would revolutionize biomass conversion into biofuel, so how do I break in.” And I think that the working groups, through the Joint Committee structure, provide a very nice way to put folks with key ideas like this, or with target programs they'd like to implement in Brazil, in touch with the people in Brazil who can make that happen.
So what I usually try and do, and I know other members of the working groups and the Joint Committee will do as well, is to try and understand the objective, understand the company's goals within Brazil, and then try and link them to people within Brazil, whether at the government level or directly with business, who can assist in developing that. So the advice I would give is to say, you know, certainly contact the Trade Commissioner Service. Understand the key market that you're going into and what's available. But take advantage of the Joint Committee structure and of the folks who are currently engaged on those working groups.
Because what's changed so radically, more than anything else — and I think anyone will say this — as opposed to the number of products that were commercialized or the number of deals that were signed or the number of services Canadian companies now provide in Brazil, the key thing is, and the key thing that's changed, is that we are now able to put people into direct contact with their counterparts in Brazil in government, business, academia who can work with them immediately. In the old days, you just didn't know who to call, and companies would say “ who do I talk to, how do I make these connections?” Well, you could try this, you could try that. Now, certainly within the sectors in which we operate, we know exactly who you need to talk to. We know how to bring them to the table.
Michael Mancini: Thank you very much for taking the time today.
Ted Hewitt: You are very welcome.
Michael Mancini: Well, that's all for this podcast edition of CanadExport. As I mentioned, all the relevant links that Ted mentioned, from the Canadian Trade Commissioner Service Innovation Support Guide to the Action Plan, are available at CanadExport.gc.ca. Simply click on the Audio Podcast link on the website.
I'm Michael Mancini signing off for now.
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