Evaluating Innovative Entrepreneurship as Public Policy: Evidence from Brazil’s Federal Education Network

The evolution of innovation and entrepreneurship policies

Innovation is widely recognized as a fundamental driver of economic growth and competitiveness. However, it is inherently complex, dynamic, and uncertain, involving nonlinear processes, feedback loops, and cumulative learning (National Research Council, 1986; Freeman & Soete, 2008; Pavitt, 2009; Kline & Rosenberg, 1986). Rather than occurring in isolation, innovation takes place within systems that require coordination among multiple actors, continuous knowledge exchange, and effective management (Sirilli, 1998), particularly in an increasingly globalized economic and scientific environment. This systemic perspective emphasizes the interdependence between firms, universities, research institutes, and government agencies, each fulfilling complementary roles in knowledge generation, diffusion, and commercialization processes (Cario et al., 2023).

Public policies emerge as a key mechanism for structuring and sustaining these interactions. Since the mid-twentieth century (particularly in the post-World War II period), governments have increasingly recognized the strategic importance of Science, Technology, and Innovation (STI) for long-term economic development (OECD, 1992). This recognition led to the establishment of institutional frameworks and policy instruments designed to stimulate technological advancement and enhance national competitiveness (Velho, 2011).

Over time, innovation policies have evolved from linear models, based on a straightforward progression from research to market, to systemic approaches that emphasize fostering cooperation and coordinated innovation efforts across institutional actors. This shift is reflected in the growing adoption of national innovation systems frameworks, which highlight the importance of networks, institutions, and learning processes in shaping innovation outcomes (Edler & Fagerberg, 2017; Cario et al., 2023).

In this perspective, innovation is understood as a collective and interactive process, in which public policies support and coordinate relationships within the innovation ecosystem, particularly where institutional articulation is critical for innovation performance (Cario et al., 2023).

Entrepreneurship has also gained prominence as a policy concern. Rooted in Schumpeterian theory, it is closely linked to innovation, as entrepreneurs introduce new combinations of resources and technologies into the market (Schumpeter, 2000). As a result, many countries have expanded their policy focus beyond innovation support to include the promotion of entrepreneurial activity, particularly in high-growth, technology-based ventures.

In many cases, innovation and entrepreneurship policies have become increasingly intertwined, giving rise to approaches often referred to as “innovative entrepreneurship policies” (Dahlstrand & Stevenson, 2007, 2010). These policies seek to bridge the gap between knowledge generation and market application, promoting the creation of startups, facilitating technology transfer, and strengthening linkages between research institutions and industry.

Recent analyses of global STI policy trends indicate a growing emphasis on IE as a strategic priority. In addition to traditional areas such as public research systems and STI governance, governments are increasingly focusing on fostering entrepreneurial ecosystems that support innovation-driven ventures (Vonortas & Castillo, 2022).

Despite these advances, there is still limited empirical evidence on the effectiveness of integrated policy instruments in emerging economies, particularly within educational systems.

Moreover, in the Latin America context, innovation policies must be adapted to local socio-economic and institutional conditions, requiring flexible and context-sensitive policy designs capable of addressing structural constraints (Cario et al., 2023). This study addresses this gap by providing an empirical evaluation of a nationwide initiative implemented in Brazil.

Innovation and entrepreneurship policies in Brazil

Brazil has a long-standing trajectory of public investment in STI, with significant developments dating back to the mid-twentieth century. Historically, science and technology policies in Brazil were primarily oriented toward expanding the supply of knowledge, with limited integration with the productive sector. Over time, this approach proved insufficient to generate significant innovation outcomes, highlighting the need for stronger interaction between academia and industry (Borges et al., 2021).

The 1950s marked a critical turning point, as the federal government began to prioritize the development of research and education infrastructure (Pelaez et al., 2017). Key institutions such as the National Research Council (CNPq) and the Coordination for the Improvement of Higher Education Personnel (CAPES), both established in 1951, played a foundational role in shaping the country’s scientific and academic landscape.

CNPq has historically supported research activities through funding mechanisms, scholarships, and institutional grants, contributing to the advancement of scientific knowledge across multiple disciplines. CAPES, in turn, has focused on improving the quality of higher education, particularly through the expansion and strengthening of post-graduate programs and the qualification of academic staff. Together, these institutions have been instrumental in consolidating Brazil’s research capacity.

In parallel, the Brazilian Development Bank (BNDES) was established to provide financial support for economic development, including initiatives related to innovation and technological advancement. By facilitating access to capital, BNDES has contributed to fostering innovation within firms and supporting strategic sectors of the economy.

The institutionalization of STI policies gained further momentum in the 1960s with the creation of the Brazilian Innovation Agency (FINEP) in 1967 and the National Fund for Scientific and Technological Development (FNDCT) in 1969. These initiatives signaled a growing political commitment to innovation as a driver of development (Herrera, 1973; Velho, 2011). However, this trajectory was not linear. During the 1970s, external economic crises led to a reduction in public investment in STI (Pelaez et al., 2017), highlighting the vulnerability of innovation policies to broader macroeconomic conditions.

A renewed emphasis on STI emerged in the 1980s and 2000s, particularly with the creation of the Ministry of STI and the adoption of systemic approaches to innovation policy. These developments were accompanied by efforts to strengthen university-industry collaboration, recognizing the importance of knowledge transfer and applied research (Rapini, 2007; Gielf et al., 2017).

A major milestone in this process was the enactment of the Innovation Law (Law No. 10.973/2004), which established a legal framework to promote collaboration between universities, research institutions, and firms (Alves et al., 2015; Brasil, 2004). The law introduced mechanisms to facilitate technology transfer, intellectual property management, and partnerships between public and private actors (Lotufo, 2009). It also mandated the creation of Technology Transfer Offices (TTOs), institutionalizing structures dedicated to managing innovation and fostering collaboration within the national innovation system, in alignment with the Triple Helix model proposed by Etzkowitz and Leydesdorff (1995).

Subsequent regulatory developments, including Decree No. 9.283/2018, further reinforced this framework, providing greater flexibility for partnerships and emphasizing the strategic role of innovation in national development. In addition, fiscal incentives such as the “Law of Good” (Law No. 11.196/2005) were introduced to stimulate private-sector investment in research and development.

More recently, the Brazilian National Innovation Policy (NIP), established by Decree No. 10.537 in 2020, represents a significant effort to strengthen innovation and competitiveness at the national level. Developed by the Ministry of Science, Technology and Innovation (MCTI) in coordination with actors from the Brazilian National System of Science, Technology and Innovation (SNCTI), the policy explicitly addresses structural weaknesses in the articulation between research, higher education, and innovation performance.

In addition to institutional frameworks, Brazil has implemented several national programs aimed at fostering entrepreneurship and innovation (Aranha, 2016). Initiatives such as the Entrepreneurial Brazil Program and Startup Brazil have provided financial support, training, and ecosystem development mechanisms. For instance, Startup Brazil, launched in 2013, supported more than 180 companies through a public-private partnership model, highlighting the government’s efforts to stimulate technology-based ventures (Roncaratti, 2017). Recent federal initiatives, such as the Embrapii-Sebrae Program and Conecta Startup, combine financial support, acceleration services, and network-building mechanisms, illustrating a shift toward more systemic and integrated policy instruments designed to foster interaction among firms, research institutions, and other actors within the innovation ecosystem (Roncaratti, 2017; Borges et al., 2021). In parallel, innovation habitats such as business incubators have played an important role in supporting entrepreneurial activity. Evidence suggests that incubators integrated with science and technology institutions contribute significantly to the development of IE (Carmo & Costa, 2016)¹.

Despite these advances, the Brazilian innovation system continues to face significant structural challenges. While the country has developed a relatively robust institutional framework for STI policies (CGEE, 2016), innovation outputs remain limited, and university–industry linkages are still weak (Fernandes et al., 2010).

In addition, bureaucratic barriers, high operational costs, and limitations in entrepreneurship education continue to hinder the development of innovation-driven ventures (Degen & Harkiolakis, 2018; Sela, 2006). These challenges are explicitly recognized in national strategies such as the National Strategy of Science, Technology, and Innovation (ENCTI) (2016–2022), which outlines key priorities including improving institutional conditions for innovation, reducing regional inequalities, and promoting sustainable development (MCTIC, 2016).

Taken together, this context reveals a paradox: despite the existence of a comprehensive policy framework and a growing entrepreneurial ecosystem, the interaction between academia and the productive sector in Brazil remains limited, which continues to constrain the effectiveness of innovation policies and knowledge transfer processes (Borges et al., 2021). It is precisely within this gap that the IEP emerges as a relevant policy instrument, seeking to integrate innovation and entrepreneurship within the Federal Network institutions.

Objectives

The IEP was designed as a public policy instrument aimed at fostering innovation and entrepreneurship within institutions of the RFEPCT. The initiative was structured through a public call for proposals, allowing eligible institutions to submit projects focused on applied research and entrepreneurial development.

The primary objective of the program was to support the creation and development of innovative ventures aligned with the so-called Economy 4.0. This included technological domains such as the Internet of Things (IoT), Big Data, Artificial Intelligence, and digital transformation processes. In doing so, the policy sought not only to stimulate technological innovation but also to promote an entrepreneurial mindset within educational institutions.

More specifically, the initiative aimed to: (i) strengthen research and innovation capabilities within the Federal Network; (ii) encourage the development of technology-based solutions with market potential; (iii) foster the emergence of startups and innovative businesses; and (iv) integrate education, research, and entrepreneurship within a unified policy framework.

Structure and governance

The IEP was implemented through a governance structure involving multiple institutional actors, reflecting a systemic approach to innovation policy. Financial support was provided in the form of Research, Development, and Innovation (RD&I) grants, as well as resources for infrastructure, equipment, and operational activities.

The Secretariat of Professional and Technological Education (Setec/MEC) played a central role in coordinating the initiative, overseeing its implementation, articulating the program across participating institutions, and ensuring alignment with national education and innovation policies.

The RFEPCT itself represents a key component of the policy’s institutional framework. Established in 2008, it comprises a nationwide network of institutions dedicated to professional and technological education, with a strong emphasis on applied research and regional development. Its decentralized structure allows for the dissemination of innovation activities across diverse territorial contexts².

In addition to governmental actors, the project involved important partner organizations. The Brazilian Support Service for Micro and Small Enterprises (SEBRAE) played a crucial role in providing training, mentoring, and consultancy services, particularly in areas related to business development and market orientation. This contribution was fundamental in bridging the gap between academic research and entrepreneurial practice.

The National Association of Entities Promoting Innovative Ventures (Anprotec) also contributed by supporting the development and management of innovation environments. Its activities included maturity assessments and training programs aimed at strengthening institutional capacities for innovation management.

Furthermore, the Science and Technology Development Support Foundation (Facto) was responsible for providing administrative and financial support, ensuring the efficient allocation and management of resources.

Overall, the governance model is characterized by a multi-actor arrangement involving government agencies, educational institutions, and intermediary organizations. This configuration reflects a Triple Helix logic, emphasizing coordination between academia, government, and support entities, and highlights the importance of institutional articulation for the effective implementation of innovation policies (see Figure 1).

Source: prepared by the authors.

Approved projects and participants

The IEP funded a total of 60 projects distributed across 31 institutions within the Federal Network, covering all five Brazilian macro-regions. As shown in Figure 2, there is a concentration of projects in the Southeast region, which accounted for 18 projects (30% of the total), with a particular emphasis on the state of Minas Gerais, responsible for 9 projects (15%). This distribution reflects both the higher density of institutions in this region and its relatively stronger research and innovation capacity.

Source: prepared by the authors.

The Northeast region also presented significant participation, with 17 projects (28%), indicating that the initiative was able to reach less economically developed areas and contribute to regional diversification. Overall, the geographical distribution suggests that, while existing institutional capacity influenced project concentration, the policy also achieved a certain degree of territorial diffusion.

In addition to their geographical distribution, the projects were aligned with different domains of Economy 4.0. Of the total, 23 projects (38.3%) were related to Agriculture 4.0, 17 (28.3%) to Industry 4.0, and 20 (33.4%) to Services 4.0. This distribution highlights the diversity of application areas and the relevance of digital and data-driven technologies across multiple sectors.

Importantly, all approved projects were required to develop both a research component and a business plan. The initiatives were designed for a 24-month implementation period and involved students and faculty members in the development of solutions oriented toward the creation of innovative products, services, or business models. These solutions were expected to be aligned with local demands while simultaneously contributing to technological advancement within the scope of Economy 4.0.

As illustrated in Figure 3, the program mobilized 1,127 individuals, with a strong presence of high school and undergraduate students, alongside faculty and staff.

Source: prepared by the authors.

R&D infrastructure

Survey data indicate that approximately 91% of respondents perceived a positive impact on research infrastructure. As illustrated in Figure 5, most coordinators evaluated the adequacy of infrastructure, human resources, and technological resources as either “adequate” or “completely adequate”, both for research projects and business plan development.

Source: prepared by the authors.

This perception suggests that the IEP was successful in providing the necessary conditions for the execution of RD&I activities. In particular, the high levels of satisfaction with technological and infrastructure resources indicate that the financial support effectively addressed critical bottlenecks that previously limited innovation activities within the institutions.

Beyond this overall assessment, qualitative evidence reveals that the development of R&D infrastructure occurred in three distinct ways. First, the funding enabled the establishment of previously nonexistent or deficient research environments, in some cases resulting in the creation of new laboratories. These spaces often became important institutional assets and, in some cases, were recognized as regional references in Economy 4.0-related research.

Second, the resources supported the acquisition of project-specific materials and equipment, such as data servers, sensors, and digital tools, enabling the continuity and consolidation of research activities.

Third, more advanced technological resources were incorporated, including 3D printers and high-performance computing equipment, significantly enhancing the material capacity of institutions to support research and develop new projects and partnerships.

However, despite these positive assessments, qualitative evidence from interviews highlights challenges related to procurement processes and administrative constraints. Delays in acquiring equipment and bureaucratic procedures were identified as factors that partially affected project execution, suggesting the need for more agile operational mechanisms in future policy designs.

Development of competencies and entrepreneurial culture

The IEP contributed significantly to the development of a wide range of competencies among participants, encompassing technical, intellectual, and behavioral dimensions. Beyond the acquisition of knowledge directly related to project domains (such as industry, agriculture, and services), the initiative generated indirect benefits associated with personal development, problem-solving abilities, and innovation-oriented skills.

Among student, participation in the projects enabled engagement in entrepreneurship and innovation activities that are rarely addressed in traditional curricula. Through hands-on experiences, students developed the ability to identify real-world problems and design practical solutions, strengthening their analytical and creative capacities. In addition, several respondents highlighted improvements in self-confidence, communication skills, and critical thinking.

Participation in the IEP also influenced students’ career perspectives. Exposure to innovation and entrepreneurial practices led many participants to consider alternative professional paths beyond traditional employment, including entrepreneurship and research-based careers. In many cases, interaction among team members also fostered the development of social and emotional competencies, such as collaboration, empathy, and the exchange of cultural experiences, further enriching the learning process.

Among faculty members, the project contributed to the development of managerial and organizational competencies. Coordinators were required to engage in planning, organizing, and leading multidisciplinary teams, often managing financial and human resources on a scale that exceeded their previous experience. For many, this represented their first opportunity to lead projects of this magnitude.

The involvement of external partners, particularly SEBRAE, also played a key role in competency development. Continuous support from these institutions contributed to enhancing participants’ knowledge of entrepreneurship, innovation management, and intellectual property. Researchers reported that this experience enabled them to better understand business models, market dynamics, and the broader context in which innovations are developed and applied.

Moreover, participation in the project led to a shift in how researchers perceive their own work. Beyond traditional academic outputs, such as publications, participants reported a growing awareness of the potential for transforming research results into market-oriented products and services.

In addition to individual learning outcomes, the project also contributed to the dissemination of an entrepreneurial and innovation-oriented culture within participating institutions. Training activities, mentoring sessions, and especially the organization and participation in events (such as workshops, seminars, and conferences) played an important role in promoting knowledge exchange and engagement with innovation practices. More than 60% of respondents reported involvement in organizing such events, indicating an active role in spreading these practices within their institutional environments.

The project also stimulated closer collaboration among different actors in the innovation ecosystem, including universities, firms, cooperatives, public agencies, and support organizations. These partnerships facilitated the exchange of knowledge and experiences, while increasing exposure to real-world challenges and opportunities.

Participation in external events further reinforced this process, allowing project teams to interact with startups, investors, and funding agencies. These experiences contributed to broadening participants’ perspectives and strengthening their understanding of how innovation operates in practice, beyond the academic context.

Overall, the IEP contributed to the development of both hard and soft skills, while simultaneously fostering a cultural shift toward innovation and entrepreneurship. This combined effect highlights the importance of experiential and collaborative environments in shaping not only individual capabilities but also institutional orientations toward innovation.

Knowledge production and intellectual property

The IEP also contributed to scientific production and knowledge dissemination. Approximately 36.7% of the projects reported the generation of outputs such as journal articles, conference papers, and technical reports. These outputs increased academic visibility and contributed to the diffusion of knowledge generated within the projects, although their distribution was uneven across institutions, reflecting differences in research capacity and institutional priorities.

Despite this progress in knowledge production, the results related to intellectual property were more limited. The majority of innovations (63%) were not protected at the time of this research. According to interview data, some innovations were still in the process of protection, while others were not submitted due to strategic decisions, such as the preference for industrial secrecy or the perception that protection was not relevant. In some cases, innovations did not meet the necessary criteria for formal protection.

These findings suggest a gap between knowledge generation and its formal appropriation, reinforcing the idea that the transformation of research outputs into protected or commercializable assets remains a challenge.

At the same time, it is important to note that, beyond formal intellectual property outcomes, participation in protection processes contributed to the development of relevant competencies. Researchers reported gains in areas such as intellectual property management, legal procedures, and strategic decision-making regarding protection and commercialization. In addition, several projects resulted in the development of trademarks, fostering capabilities related to branding strategies, brand positioning, and market-oriented thinking.

New products, processes, and services

More than half of the projects (57%) reported the development of new products, processes, or services. These innovations spanned a wide range of applications, including digital platforms, agricultural technologies, and industrial solutions, many of which incorporated elements associated with Economy 4.0, such as artificial intelligence, IoT (Internet of Things), and data analytics.

However, as illustrated in Figure 6, the majority of these innovations can be characterized as incremental or adapted solutions, with a significant proportion presenting similarities to existing products or processes in the market. Only a smaller share of the innovations was considered disruptive or difficult to imitate.

Source: prepared by the authors.

This pattern suggests that, although the IEP was effective in stimulating innovation activities, the level of technological novelty remained limited. The predominance of incremental innovation reflects both the institutional context of the participating organizations and the early stage of development of many projects.

Furthermore, the results indicate that the innovations were primarily oriented toward local and regional markets, with fewer initiatives demonstrating potential for global competitiveness. This reinforces the idea that, in emerging economies, innovation policies often generate important learning and capability-building effects, even when high-impact or disruptive outcomes are less frequent (see Figure 6).

To provide a more concrete illustration of the types of innovations generated within the IEP, Table A1 (see Appendix) presents a summarized account of selected outputs across different sectors, including agriculture, industry, and services.

New ventures

The creation of new ventures was relatively limited. Only four startups were formally established as a result of the project, while others remained in early stages of development.

Survey data indicate that startup creation was not the primary motivation for most project coordinators. As illustrated in Figure 7, the main drivers for participation in the IEP were related to research development, infrastructure improvement, and access to funding, rather than the explicit goal of creating new businesses.

Source: prepared by the authors.

This finding provides important insight into the dynamics of the initiative. Although the policy was designed to foster innovative entrepreneurship, participants were primarily oriented toward strengthening research capabilities and institutional infrastructure. This mismatch between policy objectives and participant motivations helps explain the limited number of startups generated and reinforces the argument that institutional context plays a critical role in shaping policy outcomes.