Does the state have a role in innovation? – 05/09/2021 – Ronaldo Lemos

One of the most impressive crises of today is the scarcity of microchips for the manufacture of electronic equipment, computers, cell phones and more. This crisis stems mainly from the battle between the United States and China over technological advancement.

Last year, the US banned Huawei and other Chinese companies from having access to any chip made with American equipment or intellectual property.

The result of this policy was a frenzy on the part of Chinese companies purchasing and storing chips aggressively, while gaining time to develop their own industrial park capable of autonomously manufacturing these components.

This fight has had unusual developments. For example, the Boris Johnson government decided a few days ago to stop the acquisition of the gigantic British chip company Arm by the American Nvidia.

Arm’s story is incredible.

The company emerged in the city of Cambridge driven by an effort by the BBC to promote digital education in the 1980s. This effort not only formed a huge contingent of people capable of working with technology, but created a hugely successful state home computer at the time, BBC Micro, with chips manufactured by the company.

This first effort led to greater innovations. Following that, Arm designed the revolutionary Risc chip. The architecture of this chip is now present in the components of virtually all smartphones. It is worth mentioning that it was designed by Sophie Wilson, a transgender computer scientist – barely remembered – who literally created the foundation for the contemporary world.

Arm is today the crown jewel of the chip world. That’s because he specialized in designing chips, which are then manufactured by companies worldwide. Boris Johnson’s government – mainly liberal – has not only prevented the acquisition by Nvidia but is considering a possible state-owned acquisition of the company, that is, to re-statate it.

This movement in England, which symbolizes national states entering heavily into investments in innovation, became a trend. China was already reaping success after success derived from its national technological development plans, visible in the Tik Tok or Clubhouse.

The United States has now entered the same game heavily. President Joe Biden’s plan goes along the same lines, envisaging massive state investments in technology and innovation. It is as if in addition to the efforts of GovTech (the use of technology by governments) the world is moving towards a TechGov, the massive promotion of technologies by governments, as happened in the 1980s.

In Brazil, the news is diametrically opposite. The federal government simply decided to liquidate Cietec, a state-owned company that is the only chip company in the country and in all of Latin America.

Does it make sense for Brazil to give up making chips entirely when this market is enormously heated? Does it make sense to give up the know-how and logistics developed by Cietec? Does it make sense to give up a manufacturing plant capable of being an embryo for bigger leaps, as other companies like Arm have done in the past?

I really hope these questions were asked before deciding to liquidate the country’s only chip company.

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