Innovation and the emergence of Brazilian pulp and paper sector

A sustained wave of innovation has been the main driver of the Brazilian pulp and paper industry, and key component in its present success. All too often, casual observers describe availability of raw materials and low labor costs as drivers of industries in emerging economies. The Brazilian pulp and paper industry presents powerful example of the importance of long-run efforts to build knowledge based competitive advantages. Right balance of coordination and competition fostered demand-led innovation system, allowed Brazilian firms to integrate efficiently in global learning networks, and nurtured entrepreneurial culture that eventually leveraged industrial change. The subsequent expansion and success of Brazilian pulp and paper industry can to a great extent be credited to the sectoral innovation system and its dual strategy, which has established a clear division of labor between fundamental innovation and knowledge transfer. Both private firms and the public sectoral innovation system have focused Brazilian cutting edge research, development, and innovation efforts on the improvement of eucalyptus, the primary source of superior competitive advantage for the Brazilian pulp and paper industry, and in other science and technology areas created efficient mechanisms to transfer the best available scientific and technological solutions from abroad to Brazil.