Technology Competitiveness in Emerging Markets: The Case of the Brazilian Polymer Industry Carlos A. Hemais Henrique M. Barros Elizabeth O.R. Rosa ABSTRACT. The Brazilian polymer industry (plastics, rub- bers, fibers, adhesives, paints, and varnishes) is the fastest growing segment of the Petrochemical Chain. Since the poly- mer industry is characterized as science based, the capacity to create technology is vital for its long-range survival in the market. This paper analyzes how Brazilian polymer firms maintain their technological competitiveness, explains the main modes of technology transfer, and evaluates the degree of technological dependence of this industry. The methodol- ogy consisted of a database built with data from the Brazilian Patent Office. To confirm the findings, interviews were con- ducted with staff members from seven Brazilian polymer firms. The data base analysis and the interviews reveal that, in spite of the fact that Research and Development (R&D) and technological innovation have a fundamental role in their competitiveness, the firms are technologically dependent upon foreign suppliers. Key words: competitiveness, innovation, polymer industry, R&D, technology transfer. JEL Classification: O32—Management of Technological Inno- vations and R&D 1. Introduction Technology has become a central element for firms in order to get competitive advantage, in particular for those located in industries which demand constant improvements from their prod- ucts/processes. It may be even more important when considering a global world, where competi- tion for a market share is severe. Technology can be not only acquired from external sources but also generated internally (in house). Although companies may not be able to develop all neces- sary technology by themselves, and therefore need external sources, a constant and strong dependency on third parties may weaken their competitive position. Thus, Research and Devel- opment (R&D) efforts are crucial both to strengthen and to keep a company’s competitive position. The polymer industry (plastics, rubber, and fibers) is, perhaps, the branch of the chemical industry, which has grown faster in Brazil. The reason for that lies in the progressive replacement of traditional materials such as glass, wood, paper and metal, by those synthetic materials. According to Pavitt (1984), the polymer industry can be characterized as a science based industry, that is, an industry where firms are strongly dependent on technological innovations to be competitive. Therefore, their capacity of generat- ing technology is central for surviving in the long-term. The present paper addresses: (i) how Brazil- ian polymer companies maintain their techno- logical competitiveness; (ii) explains the main modes of technology transfer adopted by Brazil- ian polymer companies; (iii) evaluates the degree of technological dependence of those firms. So, we first raise some issues regarding the impact of technological innovations on a firm’s compet- itive position. In Section 2, we briefly describe how the polymer industry was set up in Brazil and the sources of technology used. Then, we report how the current investigation was under- taken. In Section 4, we outline the use of tech- nology transfer contracts by the polymer industry in Brazil. In Section 5, we present our findings with respect to the focus of technologi- cal activities in Brazilian polymer companies. Technology Management Group IMA/COPPEAD-UFRJ PO Box 68545 21945-970 Rio de Janeiro, Brazil E-mail: hemais@ima.ufrj.br Journal of Technology Transfer, 30: 303–314, 2005. Ó 2005 Springer Science+Business Media, Inc. Manufactured in The Netherlands.