Brazilian Informatics and the U.S. Research Proposal

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This step should be present in any scenario.

Brazil accepting to reduce trade restrictions is not an option in any scenario. The country's informatics industry could lose from allowing unrestricted access to U.S. informatics companies on the domestic market as many nationally-owned companies would not survive the competition. The gain, however, would be to allow more know-how in the country and help the informatics sector develop further on the quality, rather than quantity direction. In this case, the country should negotiate a gradual market opening that would give enough time to some weak national companies to become competitive against U.S. companies and thus maintain a substantial national ownership percentage in the industry.

Risks associated with the strategies

Greenhouse strategies can be major success of major failures, especially in high-tech industries, which can rarely develop in isolation. It is true that Brazil, the pioneer of such strategy in informatics sector managed to fester the development of a highly diversified set of nationaly-owned firms in roughly ten years, but once the protectionism dismantled, many of these firms didn't survive the competition.

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Furthermore, the restrictions of the largest multinational software players on the domestic market kept this industry from benefiting from their know-how. National companies were created, but their products were inferior to the best of the international industry and overall the national economy didn't benefit much.

On the other hand, the protectionism was incentive for many national it companies to invest heavily in accumulation of technological capabilities. Later on, these capabilities, plus the backwards linkages developed constituted key drivers of attracting foreign direct investment in the informatics sector. Thus, the greenhouse strategy could be seen as a long-term, forward-looking one if market opening is part of a future stage......

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