Innovation in Resource-Based Technology Clusters: Investigating the Lateral Migration Thesis – The development of a sugar-based plastic in Brazil

by VELHO, L. & VELHO, P., 2006
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

Velho & Velho offer a case study from Brazil on the lateral migration of technology from resource industries. It is about an industrial plant to manufacture biodegradable plastic from sugar. This development is closely associated with the long term activity of sugar and alcohol production in Brazil, which is based on the natural endowments of soil, climate and geographical extension that favours sugar cane cultivation. The emergence of the bio plastic industry was only possible because of a government scheme to build research capacity and knowledge production in biotechnology which also stimulated cooperation between the public and the private sector. Therefore, the most important lesson from the case seems to be that there is a key role to be played by public policies, and more specifically by S&T policy, if natural resources rich countries want to upgrade their related technological activities.