On the 2nd of August 2017, during the II National Meeting of Industrial Economy and Innovation, the "IEDI Panel: The Future of Industry" was held; this Letter summarizes the discussion (click here to access the event's material in full [in Portuguese]). Organized by UFRJ Economics Institute's director, David Kupfer, the event was attended by Luciano Coutinho (UNICAMP) as a speaker and Afonso Fleury (USP) as a commentator. Pedro Wongtschowski, President of the IEDI, coordinated the work.

The magnitude of the 2014–2016 Brazilian industry's crisis, as well as the fragility of the incipient recovery in the first half of 2017, as highlighted by Luciano Coutinho, create important challenges for the industry to prepare for the profound technological changes that begin to redefine the process of industrial production in the world.

This is a factor of concern, according to the speaker, because the industry of the future will not wait for the Brazilian industry to recover. Our competitors are already actively involved in new policies to promote industrial development and innovation. Such policies, which are beginning to be designed by countries like the USA, Germany, Japan, China, and others, do not in any way resemble the protectionist paradigms or the process of industrialization by import substitution; but, through very proactive means, they provide support to industrial innovation.

The incorporation of new technologies such as the Internet of things and artificial intelligence in the industrial process, which is being called "Industry 4.0", opens the possibility of integrating different internal activities inside each company, but also the entire productive chain, from the first-level suppliers to the consumer. This will allow, for example, logistical optimizations that today are unattainable, or a radical customization of the supply of goods and services.

As a result, Coutinho points to the occurrence of major paradigm shifts. As an illustration, the automotive industry will undergo a profound transformation with the dominance of the first electric car, and later with the entry of the autonomous vehicle. A plausible prospect is that in the future car ownership will be expendable.

Coutinho argues that, although relatively behind in this process of intelligent sensing and integration, we should not imagine that the Brazilian industry is on the brink of a precipice. What is needed is to reflect on how to use competitive advantages and current potentials to deflect risks and seize opportunities. In this sense, the role of technology gains special importance in policy design, an aspect we are also lagging behind other countries.

In his talk, Afonso Fleury identified four areas that should gain prominence in the future: robotics and artificial intelligence, human-health science, codification of money, and big data, which are developing more rapidly in countries where there is a link between technology push and demand pull. These countries seem to be precisely the ones that most actively design policies to accelerate the emergence of advanced manufacturing.

Despite the various risks that the Brazilian industrial system is experiencing with the emergence of new technologies, Fleury believes that the development of the country's advanced industry, in leadership positions in global value chains, will be able to rely on areas such as biodiversity, rare metals and creative industries.

In his closing remarks, Pedro Wongtschowski discussed an idea that is now widely believed in the country: the industry as dispensable for the process of economic development in Brazil. In addition to being a great source of tax revenues for the State and of quality jobs, the industrial sector is a key player in the creation of new technologies, which are essential not only for increasing the complexity of products and processes within the industry but also for the development of other sectors.

For the President of the IEDI, "it is a huge illusion to imagine that we can have dynamic agribusiness and services without significant and important industrial activity." In this sense, the insertion of Brazil in Industry 4.0 is urgent, requiring new and more effective mechanisms to foster science, technology and innovation. "Maybe we are not preparing ourselves enough for the national industry to survive in this new scenario, to grow and reposition itself."

The full text is available in Portuguese.