A new stage of industrial production development is under way in the world, manifested in what has been called Industry 4.0 or Advanced Manufacturing. The largest industrial powers, such as Germany, the USA and China, have been reinforcing industrial policy actions in this direction. Developing countries are, thus, living in a highly mobile international scenario that may put in question their stage of productive development.

This Letter IEDI seeks to establish some principles for a national plan for Industry 4.0 in Brazil. The paper is part of a series of fifteen studies that supported the elaboration of the Institute's industrial strategy and is based on reflections by IEDI consultant Roberto Vermulm, Professor of Economics at USP and former Director of CGEE, FINEP and EMBRAPII. His study is also available, in full, on our website (in Portuguese).

In order to meet the challenges of Industry 4.0, Brazil needs to resume its investment in manufacturing and, at the same time, transform its productive structure, modernizing its production and export baskets, its production processes and business models. This process of transformation requires cooperation between public and private agents in the direction of a national development strategy to avoid further losses in our industrial structure.

In spite of some recent initiatives, including in the sphere of the federal government, there is still, according to the author, the lack of a National Plan for Industry 4.0 involving coordination of public institutions among themselves and between them and the private sector. It is worth remembering that a major problem of Brazilian industrial and technological policy is the fragility of the institutional framework on which it relies. This is reflected in decisions that are not effectively implemented, policies without prioritization, non-establishment of instruments of action, lack of articulation among institutions and effective cooperation between government and business, etc. All these shortcomings remain on the agenda and need to be addressed, according to the Vermulm.

Once public agents and business leaders are truly committed to agenda 4.0, it is essential to draw up a national plan for Advanced Industry under the command of the highest level, in order to, inter alia, ensure convergence and synergies. It is also recommended that it be a long-term program, something like 10 years, contemplating principles such as:

     • The policy for Industry 4.0 should focus on both innovation and technology diffusion actions. The issue of diffusion is very important because several of the enabling technologies of Industry 4.0 are already known and can be adopted by companies with immediate relevant impacts on their productivity. On the other hand, it can not be restricted to diffusion, at risk of being stuck in a horizon too short for a technological development strategy.

     • It is important that Brazil defines its strategy for the field of technological innovation as Industry 4.0 opens up new windows of opportunity. All proposals on innovation highlight the crucial importance of cooperation between companies and scientific and technological institutions.

     • Treating the industry as a single field of application may not be the most appropriate procedure, as sectors' specificities are important in an policy for Industry 4.0. This is because the stage and dynamics of the processes of industrial digitalization are different among the industrial sectors.

     • In the sphere of technological diffusion, integration companies' role is considered strategic, which justifies a set of policy measures to enable and strengthen these enterprises.

     • Testbeds structuring and innovation networks are relevant infrastructures for the technological development of Brazilian industry in the 4.0 era. These laboratories must have a well defined focus, which means that several of them are needed to meet all the potential demand of the industrial sector. Smaller companies would be the biggest demanders of testbed services.

     • Since cooperation between R&D companies, universities and research institutes is very rare, and research institutions in the country do not work with a well-defined focus due to the great budgetary instability with which they operate, it may be more advisable to create a network of laboratories under a single institution in partnership with the private sector, with specific departments defined by sets of skills necessary for the development of Industry 4.0.

     • Directly, the government should use both procurement of goods and services, in areas such as health and safety, defense, mobility, general administration, etc., as well as technological orders with specific characteristics that are of public interest.

     • Indirectly, the government can use its traditional mechanisms of reducing technological research's cost and risk. In this sense, R&D tax incentives, financial subsidies for lending, non-reimbursable financing for research institutes that develop technologies in partnership with industrial companies, financial subventions, etc. can be used. The assumption is that the National Treasury releases funds for the National Fund for Scientific and Technological Development (FNDCT) that has this instrumental possibility.

     • Given the depth of knowledge of Industry 4.0's enabling technologies and the intensity of services embedded in these technologies, startups have become important as developers of new technologies and their applications. Specific policies for this segment are justified, covering human resources training, business management and funding.

The full text is available in Portuguese.