Constitutional Amendment brings the concept of innovation to the Federal Constitution

On December 17, 2015, the Brazilian Senate passed, in two rounds of voting, the Project of Constitutional Amendment, called PEC #12/2014, finally bringing the concept of innovation onto the highest level of the juridical structure of the Brazilian State, which is the Federal Constitution.

With this constitutional amendment, enacted last February 26 as the Constitutional Amendment no. 85/2015 by the National Congress, the so-called National Project of Development, inscribed in the Magna Carta by the constituents of 1988, becomes fundamentally updated because of its articulation with the concept that lies in the core of the effort to overcome the competitiveness challenge that Brazil is facing, which is the innovation concept developed by Schumpeter almost a century ago.

Within a more specific dimension of the content of the Constitutional Amendment, we should highlight the following aspects: i) creation of the National System of Science, Technology, and Innovation; ii) budgetary easing concerning the relocation of public funds for the projects of science, technology, and innovation; iii) constitutionalization of the model of technical cooperation between private and public entities to carry out research, development, and innovation projects; iv) allocation and sharing of the responsibilities between the Union, States, and Municipalities, as the promotion of innovation to a level of administrative and legislative competences is concerned.

As it is expected from a constitutional text, the amendment does not propose going deep down into the implementation of policies of the Brazilian State towards this strategic sector, but to shape a new benchmark from which such policies may be implemented hereafter. Within this context, the PEC is, above all, the legislator’s signaling that a remodeling of the regulatory framework of the public policies for activities of research, development, and innovation is coming ahead. And such regulatory framework, which is proposed to be a new paradigm to this area, will probably come from the project of the National Code of Science, Technology, and Innovation (Draft Law #2177/2011), the context of which is in process at the National Congress, and, equally surrounded by criticisms and expectations, will probably be still subject to significant alterations.

In Brazil, there is a widespread belief that the normative framework of stimulus to innovation fails to achieve its objective, and that, still considering the disadvantages of the country in terms of competitiveness in general, the innovative activities of Brazil are not close to the country’s potential as compared with the other indicators of the Brazilian economic activity. Therefore, it is in terms of the implementation of this constitutional framework shaped by PEC #12/2014 that the bottlenecks that afflict the country’s innovative activity shall have to be faced (either by PL #2177/2011, or another that should replace it), for instance: i) red tape and excessive controls, highlighting the performance of the so-called “U System” (TCU (Court of Auditors of the Union), CGU (The Comptroller General), AGU (Federal Attorney-General)), which suffocates the work of researchers and research institutions; ii) legal framework does not bring safety and easing for a market interaction via enterprises, research institutions, and government; iii) the need for optimizing the regulatory timing to speed the events and transformations inherent to the reality of research and development; iv) the recognized inefficiency of the Brazilian system of controlling and protecting the patentable innovations and intellectual property in general.

With the future implementation of an effectively efficient national system of Science, Technology, and Innovation, capable of facing such barriers, it is expected that after PEC 12/2014, with its institutional and legitimate weight, we should have measures that escape the familiar trap of the symbolic constitutionalization, the one that proposes to give a dissuasive response and prepares for a mere procrastination. Thus, it is expected that the new constitutional framework should imply the first step to engage the several participant segments within a national context of the innovative activities, articulating the market via enterprises and investors, the university, with researchers and academic leaders, and the government, with fomenting and controlling agencies for the sake of overcoming the competitiveness challenge via technology and innovation, for there is no other way to achieve the national development pursued by the Federal Constitution and the Brazilian people themselves.

Comparative Table – Proposal of Amendment to the Constitution #12/2014

Federal Constitution	PEC # 12/2014 (text passed by the Federal Senate)

	Amends and adds provisions to the Federal Constitution in order to update the treatment of the activities of Science, Technology, and Innovation.
	The Bureaus of the House of Representatives and the Federal Senate, pursuant to §3^rd of Art. 60 of the Federal Constitution, enact the following Amendment to the constitutional text:
	Art. 1^st The Federal Constitution shall henceforth enacts the following amendments:
Art. 23. It is the common competence of the Union, the States, the Federal District, and the Municipalities:…………………………………………………….	Art. 23. ……………………………………………..

V – to provide the means of access to culture, education, and science; ……………………………………………………..	V – to provide the means of access to culture, education, science, research, technology, and innovation;

Art. 24. It is up to the competence of the Union, the States, the Municipalities, and the Federal District to legislate concurrently about: Art. 24. It is up to the competence of the Union, the States, the Municipalities, and the Federal District to legislate concurrently about: ………………………………………………………	“Art. 24. ………………………………………………
IX – education, culture, learning, and sports;	IX – education, culture, learning, sports, science, technology, research, development, and innovation; ……………………………………………………”(NR)

Art. 167. Not permitted:	“Art. 167. ……………………………………………
……………………………………………………..	……………………………………………………………
§4^th It shall be permitted to propagate own revenues generated by taxes under Art. 155 and 156, and resources under Art. 157, 158 and 159, I, a and b, and II, for the provision of guarantee or collateral to the Union and for the payment of debts owed to the Union.
	§5^th Transposing, relocating, or transferring resources from one programming category to another may be allowed within the activities of Science, Technology, and Innovation, with the purpose of enabling the results of projects restrict to these functions, by an act of the Executive Power, without previous legislative authorization as provided for in item VI of this Article. (NR)

Art. 200. It fits the competence of the Single Health System, besides other attributions, under the law: …………………………………………………………..	“Art. 200. …………………………………………..
V – increment in its performance area the scientific and technological development;	V – increment in its performance area the scientific and technological development, and innovation; ………………………………………………….”(NR)
Art. 213. Public funds shall be destined to public schools, being able to be sent to communitarian, confessional, or philanthropic schools, as defined by law, that:	“Art. 213. ………………………………………….
…………………………………………………………	………………………………………………………….
§2^nd University activities of research and extension may be granted financial support from the Public Power.	§2^nd Activities of research, extension, and encouragement and foment to innovation, implemented by universities and/or by professional educational and technological institutions may be granted financial support by the Public Power.”(NR)

CHAPTER IV	“CHAPTER IV
OF SCIENCE AND TECHNOLOGY	OF SCIENCE, TECHNOLOGY, AND INNOVATION”

Art. 218. The State shall promote and encourage the scientific development, and the technological research and training.	Art. 218. The State shall promote and encourage the scientific development, the research, the scientific and technological training, and innovation.
§1^st – The basic scientific research shall receive priority treatment from the State, having in view the public good and the progress of the sciences.	§ 1^st The scientific and technological research shall receive priority treatment from the State, having in view the public good and the progress of the science, technology, and innovation.
…………………………………………………………	…………………………………………………………..
§3^rd – The State shall support the formation of human resources in the areas of science, research, and technology, and shall provide those that deal with them with means and special work conditions.	§3^rd The State shall support the formation of human resources in the areas of science, research, technology, and innovation, including means of support to the activities of technological extension, and shall provide those that deal with them with means and special work conditions.
…………………………………………………………	……………………………………………………………
§5^th – It is made available to the State and to the Federal District to destine part of their budgetary revenue to public entities that foment learning and scientific and technological research.
	§6^th The State shall encourage the articulation between entities, both public and private, to implement the activities provided for in the caput, in the different spheres of the government.
	§7º The State shall promote and encourage the performance abroad of the public institutions of science, technology, and innovation, with a view to implementing the activities provided for in the caput. (NR)

Art. 219. The domestic Market integrates the national patrimony, and it shall be encouraged so as to enable the cultural and socioeconomic development, the well-fare of the population and the technological autonomy of the country, in the terms of the federal law.	“Art. 219. …………………………………………..

	Single paragraph. The State shall encourage the formation and strengthening of innovation in companies, as well as in the other entities, public or private, the constitution and the maintenance of technological parks and poles, and the other environments that promote innovation, the performance of independent inventors and the creation, absorption, diffusion, and transference of technology.”(NR)
	Art. 2^nd Chapter IV of Title VIII of the Federal Constitution shall remain in force increased by the following Art. 219-A and 219-B:
	“Art. 219-A. The Union, the States, the Federal District, and the Municipalities shall sign instruments of cooperation with public organs and entities and private entities, inclusive to the sharing of specialized human resources and installed capacity, to implement research projects, scientific and technological development, and innovation, through financial or non-financial contribution assumed by the recipient entity, in the terms of the Law”.
	“Art. 219-B. The National System of Science, Technology, and Innovation shall be organized in the system of collaboration between entities, public or private, with a view to promote the scientific and technological development, and innovation.
	§1^st The Federal Law shall provide for the general rules of the National System of Science, Technology, and Innovation.
	§2^nd The States, the Federal District, and the Municipalities shall legislate concurrently upon their peculiarities.”

Art. 220. The expression of thought, the creation, the expression and information of any shape, process, or means shall not undergo any restriction, subject to the provisions of this Constitution.
……………………………………………………….
	Art. 3^rd This Constitutional Amendment shall enter into force on the date of its publication.