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Dennis Barker
Dennis Barker
August 04, 2011 at 7:45 PM

Government R&D Money Is Good, But Smart Thinking Is Better

Brazil's president announced this week a big plan to make Brazil bigger on the global stage, and part of the program includes a new slogan: Innovate to be more competitive. Dilma has proposed raising investment in R&D from 18% to 24% of GDP. Brazil technology companies and ultimately IT outsourcing firms will theoretically benefit from this, as will their customers, in the form of new kinds of products.

This is a good way to go if you want your country to become an economic and technologica leader. You don't have guys inventing silicon chips without spending some money on research. Ask Intel, ask Texas Instruments.

But not every Nearshore country is experiencing the kind of economic growth that Brazil is experiencing. Not every country has the revenue to make the sorts of investments that Brazil can make with its Plano Maior Brasil.

However, that does not mean IT providers and BPO companies from other countries in the region won't be able to compete with Brazil in terms of innovation. Innovation, after all, is just a better way of doing things. Not all innovation comes out of a well-heeled lab or "innovation center."

Take the case of Henry Ford's automobile factory back in the 1920s. It wasn't so much the assembly line itself that quickened and streamlined production of Model Ts — it was the idea of the assembly line. Ford and his engineers did not come up with this approach while in an R&D lab. It was a result of innovative thinking, imagination. All the funding for innovation in the world will not necessarily produce brilliant ideas or innovative thinking.

An outsourcing provider does not have to have a fancy research department to come up with innovative solutions for its clients. What it needs is smart, educated, driven employees who know how to (at the risk of sounding like an old Apple ad) think different.

When a client of an outsourcing company talks about innovation on the part of their provider, often that innovation involved not some high-tech hardware or gadgetry or expensive systems, but simply a different, better way of doing things — a better, smarter process. It doesn't even have to cost anything.

IT companies in smaller countries might be wishing they were based in Brazil so that they could tap into some of this funding for R&D. And there's nothing wrong with that. But no need for Brazil envy. Innovation — something more and more CIOs are looking for from their sourcing partners — is a product of brain power more than it is a result of having money.


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R & D requires more money because it entails the use of resources and brings research produced data. Smart thinking on the other hand may seem priceless but its value depends on whether you're comfortable with generated statistics or not.

approach while in an R&D lab. It was a result of innovative thinking, imagination. All the funding for innovation in the world will not necessarily produce brilliant ideas or innovative thinking.

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