357. Brazil would like to thank the US, Chinese Taipei and Panama for proposing this agenda item and we welcome the debate on innovation incubators. At the outset, I would like to recall that it is important to highlight that patents, as mentioned by our colleague from the EU, are far from being the single elements driving innovation. It is only one of a larger mix of different tools that promote innovation.
358. One initial comment is that discussion on IP and innovation must be based on the realisation that the granting of exclusive IP rights can only be justified to correct a potential failure in the markets for technology and knowledge in order to foster innovation. That correction of market failure entails costs for society. By establishing monopolies, however provisional they might be, protection of IP can impair market efficiency in allocating factors of production and other resources. To compensate for the possible costs of misallocation, the IP system demands, in return for the granting of exclusive rights, full disclosure of the know-how of the protected invention in such a way that society as a whole might benefit from it and build upon it. In this regard an imbalanced IP system can impede innovation once the granting of low-quality patents can restrict activity of innovative companies encourage the creation of known innovative companies such as the non-practicing entities, also known as patent trolls.
359. Regarding specifically innovation incubators, providing access to technological knowledge, technological infrastructure and guidance are some of the activities of these structures. According to the National Association of Innovative Enterprises, there are 384 innovation incubators in Brazil. I believe that there is a difference between the data that US has provided, perhaps 16 providers were incubated between the time you presented your data. These innovation incubators host 2,640 companies that employ 16,000 workers. These innovation incubators originate in more than 2,500 companies with an income estimated at R$4.1 billion, around US$1.9 billion, employing 29,000 workers. These companies can receive support, either from universities as we discussed in at the last Council meeting in February, or from the national system to support small and medium enterprises.
360. Regarding start-up programmes, we would like to mention specifically the programme "Start Up Brazil" developed by the Ministry of Science and Technology with the aim to incubate 100 information technology companies with a special objective of establishing links with international foreign SMEs. Regarding SMEs, the national system aimed at fostering small and medium enterprises has also developed a programme called SEBRAETEC that provides mentoring in different areas of technology and in the use of instruments such as industrial design, geographical indications, trademarks and patents.
