Coping with Globalisation An Analysis of Innovation Capability in Brazilian Telecommunications Equipment Industry

Brazil is one of the only three and the first one from the developing world to initiate and maintain innovation capability especially in the switching equipment component of the telecommunications equipment industry. The maintenance of this capability has come under some strain with the increasing external integration of the Brazilian telecommunications economy. Employing a sectoral system of innovation perspective the paper undertakes a comprehensive evaluation of the efforts made by various components of the innovation system, and especially the research and policy-making parts, to maintain this capability. The ensuing analysis shows that the innovation system is learning to cope with changes in its external environment in a bid to maintain existing capability and has even managed to enhance capability in areas such as manufacturing and marketing. In order to cope with globalisation the Brazilian State has put in place a selected number of legal and fiscal instruments of state support. However the very process of globalisation threatens to vitiate or nullify the positive effects of these instruments