 The fourth forum on Latin America here in Sao Paulo. I'd like to welcome everyone in the room and of course all of our viewers online. Today we are here to hear a new announcement on a new strategy, the Industrial Strategy 4.0. And I'm joined today going in order of seating by Luis Augusto Ferreira, President of the Brazilian Industrial Development. Marcos Jorge de Lima, Minister of Industry of Foreign Trade and Services of Brazil. Paulo Abelo de Castro, a President of the Brazilian Development Bank. Ronaldo Camargo, Vice President of Financiadores de Estudio y Projetos. Welcome gentlemen for joining us today. Mr. Minister, you have this new strategy for industry to announce today. We are excited to hear all about it. Okay, boom. I would like before anything to thank you all for your presence, the presence of the National Bank of Economic and Social Development. Thank you Ronaldo for your presence. Go to Ferreira, Luis Augusto Ferreira who was very important for all this building. I need to remind you that this new strategy comes from my predecessor, predecessor, Archanto Anu, following the example of Germany in the United States. I am going into the matter and the whole team of the Ministry of Industry and Foreign Trade and Services so that we can work a strategy for an industry 4.0 that we're launching here today. So we've been working a lot for the whole 2017 with a private initiative of several industries, structuring, shaping a collaborative work with the private initiative so that we can define the best strategy for the Brazilian industry. So we're not too late and too behind compared to the rest of the world as for connectivity, industrialization, that what can modernize our country. One of some of those elements are pivotal so that companies can transform their companies. The chapter which is the one of financing the BNDS president will talk about this, but we had other concerns within this agenda. President Gutfried will speak about some of the initiatives under his initiative within the ABDI so that we can do some tests, real tests for the 4.0 and to talk about some initiatives. And I here would like to thank Marcel who helped to the approval with the COMEX for the exportation of robots for those who are not produced in Brazil. But when we speak of one of those access in Brazil, those topics we, Council, we wanted to respect the RN 12, a national decree in Brazil. So that through the modernization of this regulatory norm and here I would like to thank publicly the Ministry of Employment, which has been instrumental. We are deep bureaucratizing in line with the needs of companies, of great companies. And our main concern, productivity, we are also focused on competitiveness and we have only one path. I'd like to congratulate Professor Schwa with his agenda for this work economic forum. And today we took breakfast together and I could congratulate him as a founder and as a first pivotal role for the economy. So I'd like to highlight this government effort and coordinated with several players within the Brazilian economy. I'd like to thank also the President's cabinet, the Minister of Science and Technology, represented by Phinep, who has followed each debate step, the participation of several players, such as the one I've mentioned here. Such, I consulting with our moderator whether if I can go on with my presentation. Pedro de Castro, can you expand a little bit on the financing of this new strategy and your role in this? Thank you very much, Mr. President. It's a good afternoon to all panelists and participants of this session, of this press conference. I'd like to thank for the opportunity given by the National Bank of Social and Economic Development for this opportunity. And the Director of Strategic Planning is present here with us in the room and coordinates the outlining of the loans for the BNDS on the short and mid term. The participation of the bank on the general matter of innovation, we have an experience of 77 years. So we can give the context of this debate so that you don't have the impression, fruit of the imagination of a few that Brazil has just discovered in industrial innovation that one we use to call to label as innovation 4.0. 75 years ago, since its founding in 1952, the BNDS has been working on this issue and has been committed to the modernization of Brazil through several phase when we were referring ourselves to industry 3.0 when the issue was banking, the banking system. And with the development of Petrobras from 74 forwards in the area of energy, mainly electrical power energy, hydro power, and then a nuclear energy which is still controversial, but is in use in power of petrochemical and steel industry which is up to date nowadays. This discovery of a new industry, a new phase in the industry development, the past manufacturing, this dematerialization of industry is really this novelty and which comes from the handicraft or very small scale to a new phase which is an investigative one. The industry which she considers research and development as part, an integral part of the production of the semiconductors, FNEP, NBN, NDS, we are investing together in this field and I hope that we have success so that the first manufacturer of semiconductors and will can be built and settles in Brazil because it has been, the plant exists near to Belo Horizonte in the Minas Gerais state with all the equipment still packed and there are some workers working but they need their equipment and their green light, the final green light. These are the conditions which define our banks and the public bank NDS and its partners. Innovation has occurred in Brazil a few years ago thanks to the new strategic plan which by chance in this week has been concluded this week with NBNDS, it's a strategic plan at the horizon of 2035 with a vision, a challenging vision for this horizon of 2035 which are the title of Brazil a developed country which is to tease the government and other partners, we are a country that can state that is developed at the horizon of 2035 and it is our priority within the bank since NDS is the major institutional investor in Brazil indirectly because it's only, it's enhancing investment with the capital of others. Therefore within this strategic vision for 2035 innovation remains because it has always been there but it remains highlighted and as a priority along to the characteristics that we already know we are facing what we call the era of knowledge. This is how we could describe the speed of accumulation of information which transform information itself as a factor of the production factor as a pivotal production factor. From there has come another concept, the Internet of Things because it's a concept which gathers in the cloud wherever it is a gathering of information, it can be a small sensor which registers urban mobility, it can be a sensor adapted in an agricultural machine that will gather information about the river, or it can be within an hospital sensor setting a patient in the recovery phase and something which is very dear to the Brazilians it can be a sensor for ID of people scanning the face of someone at any given airport which tackles the problem of public security. There is an array of uses possible for sensors and where we could significantly increase the productivity and the safety with the 80 billion ray eyes that Brazilians already spending in terms of federal and state budgets for security. So the bank is deeply involved in that, we are the bank for innovation and we are willing to create a concept and we've done that to establish priorities within the budget which is what we've just done the last week. When we approved political and operational we come from a spread, a banking spread of 1.7 and it was decreased to 0.9, the spread that is used for the 2.0, 4.0, sorry, industry. However, there is a specific feature, Mr. Minister. The maximum incentive in the bank goes through different lines, not just to one line. So modernizing a group of industries and adding robots. So our bank is prepared to state that in an initial ballpark figure we could evolve from about 1 billion ray eyes this year, which has already started. So it might sound that it's not enough, but it's a lot since we're in the third month. But we could reach 1.5 billion or 2 billion next year. So that's 100% growth compared to what's been invested. And that would leave us with around 5 billion. The good news is that the bank doesn't have a limit in its budget for what's priority. Theoretically, if Brazil clicks and leaps in that direction, which depends on other aspects, we're not gonna discuss now. Political, macroeconomic aspects and the state of Brazilian society. If the leap takes place, the bank will be ready to face largest budget challenges. I spoke a lot about innovation. Mr. Carmajo, can you speak to the role that you see for yourself and for FNEP in this new strategy? It is a pleasure to be here. Thank you for the invitation. Thank you, Guto and Sao Paulo for seven years. Thank you, Paulo, who is a colleague, an investor. We work together at FNEP and BNDS, not just in terms of innovation, but also in a first Brazilian, the first Brazilian semiconductor company. Before I start, I would like to state that FNEP wears two shoes in a sense. So we have the National Fund for Scientific Development. That's one of them. We join together 26 funds, and they manage non-refundable resources for innovation and investment in science and technology. Our FNEP, the Brazilian Agency for Innovation and Research Research, is a bit younger than the Brazilian Bank for Development. However, it has a history of 50 years, one year before the revolution of computing and automation, and now we are going through the fourth industrial revolution. So cyber-physics systems. And in that sense, FNEP has been modernizing and restructuring to act in its mission to foster, together with the Center for Research and Development. The other shoe we wear is refundable financing. Is translation working? Can you hear me? Can you hear the translation? Is it working? From all this context, for the first time, the federal government effectively joined forces through the Ministry of Industry and Trade, the Ministry of Science, Technology and Communication in the sense of, effectively, fixing only one policy for the industry, for manufacturing 4.0, as well as for IoT, and so on. IoT, which is a great program that the Ministry of Science and Technology should announce in two months, approximately, and also interacts with the issue of the 4.0 industry in a broad manner. I have just participated in two meetings here at the Congress with two great companies, and the Minister Gilberto Cassabre, discussing exactly this issue. The FNEP, similarly to the NDS, has a fairly broad investment limit for science and technology. For you to have an idea of the refundable financing through four policies that should be approved in a short time, until next month, we will have R$ 7 billion for loans this year. In addition, we will contract and sign a $ 1.5 billion dollar bid to also invest in innovation and so forth. This financial joint, it has been linked to the federal government's policy in partnership with the Ministry of Industry, Ministry of Science and Technology, and always with the NDS in the main operations, we should have, at first, more than $ 3 billion for the next three years. These $ 3 billion, we should also invest without a limit. We will be able, for example, through seven sectors of the 4.0 industry, to apply part of this $ 1.5 billion dollar bid, as well as this remaining financial joint that we have for reimbursed investments. So, basically, the FNEP's photography, our collaboration through Ministry of Science and Technology, with Ministry of Industry and Industry, also remembering that the only national company of technology linked to the Ministry of Science and Technology and Communications is CITEC, a company that we are recovering from long passes, also in the sense of inducing this growth and this revolution, which, without a doubt, we are on the right path, and we will be accelerated. So, before we hear from Mr. the Minister will have to leave us to join another panel, so thank you very much for joining us and for giving us some of your time today. And I'd like to thank Guto Ferreira for everything we're doing together. Our portal of the 4.0 industry is already live. We are going to have a tool for the test of 4.0 industry. And there will be tests also made for industries. That's in a virtual environment. And they can be assessed on their level of maturity in order to check how they are in terms of maturity. And then we can focus on the need of each company and their maturity towards the industry 4.0. I apologize, I'm out of time. I have to go to the other panel and we are going to talk specifically about the 4.0 industry. I'd like to reinforce that this is a new era for the national industry. We now have the opportunity, a structured opportunity to foster weather with exemption for tax exemption for bots that will be received in our country. We will be able to bring them. Thank you for the Chamber of Foreign Trade. They now have zero tariffs. And also we have financing with attractive interest rates. We also have Connection Startup as a program that connects startups and large companies. So those that demand for financing and those that offer financing, they get connected. And everything is structured in a very intelligent manner. Thank you Igor Carver, Mr. Secretary, Rafael. Also, and thank you to the press, the press that is present here at the room. Thank you for covering our work and for this opportunity to debate the Brazil we want to have. This is the Brazil of the future, the Brazil that will allow us to have the opportunity to seize such a rare opportunity in an economy that is leaving a crisis and with real expectations of GDP growth. 23 months ago our GDP was of minus 3.5%. And in a very brief period of time we've reached a positive GDP last year and this year we will have a GDP of positive 3%. So thank you to the World Economic Forum once again for bringing this topic for the relevance you give to such a key topic for the world. Brazil is evolving to reach the next technological evolution. Thank you very much. So I will ask Mr. Ferrer. Mr. Ferrer, could you expand on some of the comments that Mr. Minister has shared with us today? This agenda here at the Economic Forum we're quite tight on time. So Ronaldo, hello, Paulo. We've been talking about the 4.0 industry for such a long time. The Industry Federation. Igor, Mr. Secretary, you are the person in the Ministry of Industry and Commerce that will work with competitiveness. Rafael, you are coordinating the formulation of the 4.0 industry. We have some good news here. Times are back and the economy, albeit in a shy manner, shows some signs of recovery. This allows us to... This allows the National Bank for Development to invest with more precision and the Foundation for Research can support initiatives around innovation and IoT. This is part of the consultant board at the National Bank for Development for the IoT sector. As for the 4.0 industry, the Brazilian Agency for Industrial Development has some comments regarding productivity. Of course, we are having a debate right now about reindustrialization. I don't like this term reindustrialization. I think it's a readjustment of the Brazilian industry sector. It's just a new global trend to have new global value chains. Technology requests smaller rooms, more productive at a lower cost. Earlier this morning, we were talking to Professor Schwab and he said that energy efficiency can be an amazing entry door for the 4.0 industry in Brazil. The Ministry has a program that's called Productive Brazil. It's a program for energy efficiency. We've been working with companies around the world. That's over 3,000 companies. And energy efficiency right from the start decreases costs by 20 or 30%. There's also the matter of labor, human material. The 4.0 industry requires not only an amazing scale of data, data has become a commodity today. But what do we do with data? How do we work intelligently with data? Well, machines can do that. They talk to each other. But human beings behind machines, that's what will lead to decision making, even in the government. So we have to prepare public managers and we need skilled professionals to work with industry 4.0. Another aspect is that this policy comes at a key point in Brazil. Brazil is now in a path not to debate the topic. This is a debate that's been going on for a while now. But we now have effective initiatives. We have diagnosed, we have self-diagnosed our own industry. And then we have the testbeds. Finally we reach funding lines. The private sector must know that it's key. They must believe in the recovery of our country. This government has been doing reforms and we are paying the price to leave a leaner country for the next administration. But we need skilled people to work with the 4.0 industry. We also work with machines. That's a huge problem regarding who is going to be benefited. Is it the industry or just an elite in the industry? And maybe initially this will reach large industries. But at the medium term, this will shorten periods. Industrial policies have to be re-debated. And medium and large companies will also benefit from the 4.0 industry. So farmers will have access to connectivity. Farmers will have access to technology and they will be able to have information, quality data and are going to transfer this to retailers. So we are talking not only about the 4.0 industry, but also about a 4.0 country. And the Brazilian Agency for Industrial Development, we've been working in close partnership with the Ministry of Foreign Trade and Industry. The 4.0 industry is successful around the world and they are working already with retailers. So this is about behavior, education, technology about a country that has a 4.0 mindset throughout the whole chain. The 4.0 industry will change Brazilian society. 5% of industries that are part of the 4.0 industries, they have changed and within 20 years we want to have at least 15% of our industry in the 4.0 area. We must be bold to talk about jobs. I know that you might ask questions about this. It's important to state that jobs will be lost. This is not true. In the next 20 years we will create over 200 million new jobs. In some positions we don't even know by now. The question for Brazil is how to prepare a new generation for this transition. How will we prepare new generations to face the new jobs that will be born around the world connected to technology and to the 4.0 industry? So this is a sound policy. It's based on diagnosis. It has financing. The National Bank for Development has a support of 10 billion reais. And from then on we must give this scale in our country. I'd like to take this opportunity to thank someone who's not in the room but who was responsible to bring not only the world economic forum but the person responsible for having this forum here, Minister Marcos Pereira. He gave us the freedom in the ministry to work. And in such a short period we launched this policy. Come, please name your name and the media outlet you're from. My name is Victor. My name is Victor. I would like to go back to the percentage. 15 and 15 years, 15% of the industry will be 4.0 and up to 20 years. We would actually like to reach 18% of the industry 4.0. Germany for instance. They invest about 20 billion euros a year in the development of 4.0 industries. Of course, this is not part of our reality in Brazil. But there have been efforts, and we work in a partnership with the Science and Technology Ministry to have connectivity. This structure is permeated by connectivity. So one thing leads to the other, and we believe we can reach this number. My question is, you mentioned this is a sound policy. You created it in one and a half year. You bring together BNDS and FNEP, different agencies. What are you doing for that to remain after the new government takes office? Well, I come from the startup industry and innovation industry. The 4.0 industry policy, just like the national policy for IoT, these are not government policies. These are state policies, and I think we all believe in that. They are the foundation for a new government to have a head start. We want to leave a structure behind. So diagnosis, for instance, at the 4.0 industry, they will be able to do that with the data that we are putting at the website right now. This data will be accessible for the new administration after the elections. In the industry ministry, we have technicians that remained throughout the last administrations. So the industry ministry has not had a lot of turnover in the employees, and I hope they will remain in the next administration as well. Good afternoon from Business News America. My name is Pedro. You said that you worked one year and a half to design this strategy. I believe there was a bit of a delay. You had mentioned that there was a delay, right? That's the first part of my question. Why was there the delay? And what is the strategy about? As far as we understand, it's financing between FNAB and BNDS. Then we have the test beds, and then we have tax exemption for bots. Is that it in the first moment? And just finalizing, how do we tie together all the policies the government has? You talked about the IoT, the plan for IoT, the digitalization plan. How do you tie everything together? I'm sorry, I might forget one of your questions you asked a lot. The delay we had, industrial policies that started to be debated in Brazil in 2003 with Minister Furlan, these policies are undergoing change. Chemistry is quite a complex sector, very intense on research, and research takes several decades. So for those sectors, we can debate a long-term policy, but it takes longer. In the auto industry, we had 10-year cycles in Brazil, but now we work in cycles of five years. In Germany, they work with cycles of three years. So cars become a software and service platform, and then the authorities must have a different sense of urgency, working more like private companies. So the delay was because of that debate precisely. We could not rush because we wanted to have a sound policy, but we could not delay ourselves because we couldn't lose the momentum. So the delay was due to some issues connected to the urgency of innovation and the analog, so to speak, feature of the public realm. I think that having done that in one year and a half, launching a new policy in one year and a half, we didn't start from scratch. The team from the industry ministry was working on that. We have Rafael, he's an expert in 4.0 innovation. We have Bruno also, and they were already talking about competitiveness in the Brazilian industry, how to reduce costs and increase competitiveness. So that was the foundation. Second question, all the three pillars, well, tax exemption for bots, for importing bots. This is not one pillar, it's part of all the pillars. It has an impact on how to adjust our industry by using collaborative bots or industrial bots. So this is really part of the strategy. We face a difficulty in the country. We are a country of continental dimensions. So to talk about 4.0 in South Korea or in Israel is quite different than talking about 4.0 industry in such a huge country. Like Brazil, most of our country is still working with commodities and not with transformation industry. That's why we need a self-diagnosis. We are inviting the national industry to self-diagnose in our website. And we want to understand if we are talking about a 1.0, 2.0 industry or maybe even a 4.0. And then we move for the 4.0 stage. Yes, it's a journey we take to reach the 4.0 industry. Of course, this is not just about the 4.0 industry. We are taking advantage of the digitalization of the industry to go from 1 to 2, 2 to 3 and 3 to 4. So these are the steps in the ladder. And in 15 to 20 years, we want to have a complete, a completely different industry. Your third question is about a challenge authorities face for a while. I have learned to respect the structure of the public realm. I'd like to highlight that. In the minister of industry and foreign trade, we have amazing technicians. We have people that think like private companies. But you have boundaries within the structure. All around the world, governments are not very good at communicating what they do. This is a challenge we face, you know? To place BNDS, the industry, ministry and other partners. It's amazing to have everyone here in this table. I was part of BNDS's IoT plan. I was part of the board. And the challenge today, however, for the public realm is to be leaner, faster and communicate well. That's what matters, communicating results. People just want to know about results. And I can speak on behalf of my agency and on behalf of myself. I am positive that this policy we're bringing now with these partners. It integrates other ministries. It is a sound policy and we will have consistent results. And I hope you put pressure on us. Vinicius Freire from Folha de São Paulo newspaper. What is the strategy about? We saw a summary of that in the papers today. What is the difference between the financing BNDS is already doing? You mentioned that you've been doing this for a while. These are credits of five billion in three years. Will there be a difference other than the spread? Will that depend on a self-diagnosis? What will happen differently in practical terms? So also training professors, granting money for 20 startups, is that correct? You probably read the story. What about this strategy? It's different. BNDS already gave financing before that, right? You talked about Phinep's money, $7 million and then $3.5 billion that you're going to receive from the Inter-American Development Bank. I don't understand the numbers exactly if you could explain in further detail. $2.5 billion, is that it? I don't understand. Can you please clarify the figures before financing? And we have experts to talk about that. Just talking about startups. The fourth industrial revolution, suppose that we have a completely different tech level and it's disruptive. We can work in that sense, not only in traditional research centers, but also in startups and scale-ups. We have a program, we place 50 million REIs to connect startups and the industry. Embraer, 3M, VR Foods, Caterpillar. We have done an amazing match between the industry and the startups. We also have a program called Phinep Startups and the National Bank for Development is also investing in that. This is part of a wave in the government which supports the new tech generation in Brazil. And now I give the floor to my colleagues who are the experts in the numbers and in the money. Thank you, Vinicius, for your questions. I'm going to try to be brief because we are running out of time. So we must consider what is about an induced adoption and that's what we're trying to foster when we make resources available. I'd like to remind you of something my director reminded me of. The maturity now is not of 10 years anymore, it's of 20 years of payment time. So we decrease this spread for the loan and we increase the deadlines, due dates for the funds. So you have smaller installments, of course. If you do a mortgage in 10 years, it's different than if you do it in 20 years. More important than that is what Ferreira mentioned when he said that our greatest concern is with the anonymous companies. The companies that we don't know yet, there are 11 million companies and there are far or 5 million micro companies. And some companies we don't know, it's hard to access all of them. That's why we are creating this week, we are restructuring our bank and now we have the EBNDS. It's a digital bank, I don't like to use this term actually because this is a bank within a bank. It is in itself a fintech, so it organizes the EBNDS, it's a hub. It collects information about providers and customers and money is in between. So we facilitate the adoption of technology, whatever it is. As long as these micro-entrepreneurs have access to credit, regardless of whether this is for a 4.0 use. But these resources were not available before. We have very few credit available in Brazil in general terms. Thinking about risks and shareholders, we have three CREATEX, that's the name we give it at the bank. That's about 200 and something million reais. It's extremely efficient, this program. We foster the rise of startups that are identified regionally. Also supporting regional development, private agents that place startups in incubators. And we've been managed to detect amazing profitability for the set of operations of these funds. They can be multiplied in numbers and they can also increase in size. I would like to highlight this revolution is not about billions that are made available. Of course it's important that the government takes a position and says this money is here. Come to BNDS and ask for credit. These billions do not solve things. What solves the problem is accessibility. BNDS is completely focused on being an accessible platform for micro and small entrepreneurs. That doesn't mean we haven't reached a level of 62% of participation of small and medium companies. If we ask here, people here in this room and everybody is well informed, you're going to say well it's probably 6%. But we are over 60% in the participation of companies. Finally I would like to highlight planning. I don't want to leave this room without talking about our action plan. And you are part of the creation of this action plan. It's the action plan for IoT. It organizes the participation of the bank in a near future. One final comment, I hope you allow me to do that. There is no evolution or induced adoption of this plan. We're going to talk about this on the 20th next week. We're going to have a debate in our bank for this plan. We cannot do that if macroeconomy is not well organized. If we don't have the appropriate tax system, if we don't have a financial system focused on fine tuning these decisions, if we don't have less red tape or less bureaucracy, it's going to be quite complicated on the other side to compensate all these three huge obstacles with specific industrial policies for adoption. This is going to happen only by chance in some industries that tend to use technology more. And it's amazing to see that agribusiness is doing that in Brazil right now. Thank you for joining us today. I'd like to thank everyone in the room and online. If you are interested in more information, please check out the website mdis.gov.br for more information. Thank you.