How emerging economies are changing the landscape of global energy innovation
As China and Brazil step up their energy innovation efforts and foreign direct investment, they create new avenues for technology co-operation
16 September 2013
The landscape of global energy innovation and technology transfer is in flux: emerging economies have not only stepped up their energy innovation efforts, but also increasingly invest in each other’s energy sectors. The intensification of these investment flows has the potential to increase technology transfer, be it in the form of increased trade in components and equipment or through technology transfers between companies. Governments both facilitate and complement investments through sponsored co-operation programmes, which develop frameworks to broaden investment flows in technology co-operation in the academic and institutional realm.
The bilateral relationship between Brazil and China is a case in point: from 2005 to 2012, China invested USD 18.2 billion in the Brazilian energy sector. Until recently, Brazil represented the single largest destination for Chinese energy investments. In parallel with this surge in Chinese investments, Sino-Brazilian trade and political relations have intensified rapidly over the past decade: China became Brazil's largest trading partner in 2009. The two governments set up the China-Brazil High-Level Co-ordination and Co-operation Committee (CBHCCC), including a subcommittee on energy and mining. National oil and energy companies from Brazil and China have signed several technology co-operation agreements in recent years, as have universities from the two countries.
The new IEA Partner Country Series paper Energy Investments and Technology Transfer Across Emerging Economies: The Case of Brazil and China takes a close look at these trends, focusing on three main questions:
- What are the drivers of Chinese investments in the Brazilian energy sector?
- What is the potential for inter-firm technology transfer among the main Chinese and Brazilian companies involved?
- Are government-sponsored activities and academic exchanges complementing inter-firm technology transfer?
Overall, the paper’s findings point towards an increasing potential for the application of jointly generated knowledge not only in the two countries’ bilateral relationship, but also for the deployment of innovations in third countries and, more generally, for intensifying global energy R&D co-operation. However, making use of areas of potential synergies is not straightforward. In some areas such as oil and gas, the objectives of high-level political agreements on increasing technology transfers have yet to be achieved given the absence of immediate commercial interests at the corporate level. In other areas, such as wind energy and power transmission, technology co-operation will develop more rapidly because not only are there synergies between the corporate actors but also commercial interests already drive co-operation.
To download Energy Investments and Technology Transfer Across Emerging Economies: The Case of Brazil and China, please click here.
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