CERTI Foundation: Technology and Innovation in Brazil

Interview with Carlos Alberto Schneider, General Superintendent of CERTI (Reference Centers for Innovative Technologies Foundation)

We will start by introducing the CERTI foundation. I would like you to describe the work that the foundation does, and also tell us a little bit about its history. What were the reasons for the creation of this private foundation?

CERTI was created in 1984, with the support of a group of companies, as an organization to support technological development – to assist companies in the development of new products and processes, using advanced technology. In fact, this is what we today understand innovation to be. At the time we were focused solely on the use of IT in the modernization of the products; robotics, automation, quality control, automation of production methods. This was the initial focus of the CERTI foundation, which was mainly working in the automotive sector. CERTI was actually created with the support of Volkswagen, Mercedes Brazil, Metal Leve, and also companies from Santa Catarina, like Embraco and WEG. Over time, and in harmony with the demands of the industrial sector, we began to work on other sectors as well, like banking automation, for instance; in the early 1990s, we verified there was a great demand in the banking industry, and we helped Procomp, a company from São Paulo become leader in banking automation in the Brazilian banking sector. Procomp was then acquired by Diebold, an American company, about five years ago. Brazil has actually become a world leader in banking automation technology.

Nowadays, we are providing our services in the industrial sector, mainly in the manufacturing of digital television solutions. Thanks to cooperation agreements we have made with some European institutions, we have evolved considerably in terms of digital television technology. In this field, Phillips was our biggest client, and we helped Phillips create the solutions for the Brazilian digital television system. Currently, besides Phillips, we are also working with other companies that are adopting the Brazilian digital television standard and expanding our R&D on digital convergent solutions that are applied worldwide.

In what way have you contributed to the digital television solutions in Brazil?

Initially, our focus was on the concept of the set-top box, which receives the digital signal and converts it into a format that can be interpreted by the old equipment, so it can present the image on the screen, using the old technology. Nowadays we expand that to media centers, home gateways and one-chip integrated digital TV, in which the reception and signal processing, and the displaying on the screen are all digital. So this is our focus on this field. We assist European and Asian companies in the development of solutions for the Brazilian market. Brazil has basically adopted the Japanese digital television system with some adaptations and a specific middleware called Ginga that is able to run interactive applications broadcasted with the digital TV content. CERTI is one of three organizations that have developed a commercial Ginga. We master all of this technology, so if a European company comes to operate in Brazil – they will not be able to use the European system, they have to adapt to the Brazilian standard – they can come to us and we will help such companies to develop and manufacture the solution for the Brazilian market, and also for the Latin American market, as the Brazilian system is being adopted by practically all of the Latin American countries.

In this case, your client would be Phillips, or the Chinese TV set manufacturer, correct?

Exactly. TPV-Envision, a Taiwanese company with manufacturing plant in China and in Brazil, is one of our most important partner at the moment.

So there are only a few clients.

Exactly. In the digital TV market, product development is a very specific and focalized activity. And we have to be very careful. If I develop a solution to one company, I cannot use that same solution when working with another company. All these matters of confidentiality and intellectual property are regarded very seriously at CERTI.

You gave the example of digital television. Is this the best example of the work you are developing, or are there other good examples?

We help many companies, larger and medium size ones, in the modernization of their products, in a more generic way; mainly in the development of electronics. An interesting example is Stara, a big company that makes agricultural machines and equipment. They have a partnership with the CERTI foundation, in which we help them develop all the electronics – including the production of the prototypes and small series – for these big agricultural implements.

What kind of equipment are we talking about?

Harvesters, seeders, all the systems that are automated, with GPS navigation, management of several machines, etc.

Another good example is a company with which we are working in the modernization of their dental chair equipment. It is an international company that operates in Brazil. They want to do an upgrade on their dental practice automation equipment. So we are assisting them in the development of solutions. In this case, we are working on all the electronic solutions, from designing to prototyping, and through a so-called factory-lab, we are actually manufacturing small series of those electronics components. The case of this company allows us to work this way because they do not need to manufacture hundreds of thousands of dental practice offices, they only need 100, or 1000; so these are manufacturing jobs that are very small, that have to be extremely reliable, with highly advanced technology. This is something that they could only find at CERTI, they would not be able to do it anywhere else in the country.

You also mentioned some examples of international cooperation. Can you tell us a bit about this aspect?

Well, it is our principle at CERTI to work in the creation of innovative solutions and, whenever possible, to do it through partnerships. So we have a basic team that leads the project, who has a certain set of technologies available, but when we require some special knowledge, we collaborate with a partner. Our number one partner is the Federal University of Santa Catarina. Actually, our facilities are inside the University campus, although we are an independent organization. So, what happens today is: if we want to develop a piece of medical equipment for Phillips, or any other client, our team has experts to create the mechatronics, electronics, and software and to manage the project. But regarding the medical aspects, we do not have experts in this field, so we would ask for support from the best experts at the UFSC. If one of the academics has an interest and is qualified, he will become a consultant, contributing with his knowledge, adding value to the project and generating the solution.

Now, our partnerships are not exclusively with the UFSC. They are our main partner, but we have other partnerships with other Brazilian institutions, and we also have a strong collaboration with the Fraunhofer Institute in Germany, with which we actually have a formal agreement for cooperation. This organization acts in a similar way to CERTI, it also develops solutions for companies, but it is of a much bigger dimension, and makes huge investments in technology development. So if we have a specific need that they can supply, we will get them involved as our partners in the project, so we can speed up the process of developing the solution for our customers, which are mostly based here in Brazil.

What are the great challenges that the CERTI foundation is facing at the moment?

Well, our greatest challenge is to get the funding to invest on infrastructure and knowledge pushing innovation forward. We need to get ahead on the work on new technologies and to be proactive proposing innovative solutions and to be ready to meet the industry demands for competitive and time to market products. To generate technological innovation, that is, to actually create differentiated solutions requires a great investment. The Brazilian government is currently providing many opportunities, be it for Brazilian companies or for foreign companies operating in Brazil. But having access to these resources, and operating with them is complex. There are some initiatives that are striving to solve this problem, which is new to our country, but, at the moment, it is very complicated. The Brazilian medium sized, and even the large Brazilian companies are very afraid to make very large investments in developments. So, the biggest challenge we must overcome in order to be able to work in the development of solutions with peace of mind is still the financial aspect.

We at CERTI have not been afraid of taking on any projects, no matter how complex they may be. Firstly, because we have good professionals in Brazil; we have smart and creative young minds and we work hard to select the best talents. So, we have a good team, and with a little courage, we will take on some rather complex problems, but sometimes we need to rely on cooperation. So we have these partnerships with the UFSC, with the Fraunhofer Institute, the MIT – There were a few projects that required that we actually went to the MIT and discuss matters with the academics there. This is something that is enjoyed by the members of the team, and that generates solutions. Throughout the years we have done some pretty interesting stuff there, like the electronic ballot box, banking automation systems, especially automatic tellers and fiscal printers where there is manipulation of papers, which requires complex mechanics. Of course we always develop these projects in collaboration with the client company.

So this can only be done by big companies like that banking company, for instance, which was a large company that could afford the investment, correct?

Yes, this was Bematech, actually the largest company in Brazil, in the field of commercial automation, which is today the main producer of fiscal printers. No question about it, to embark on these innovation projects, a company needs to invest a lot and if it the project is being funded solely by the company, we’re talking about a big, solid company, for sure.

Of course. But wouldn’t you also be interested in attracting investors that might want to be your partners by providing the funding? Maybe an investment fund?

Well, there is a possibility to receive some resources from the federal government or from the government of Santa Catarina. The only problem is that these resources usually take too long to be distributed, which is detrimental for the innovation process – once you have the idea, you must work fast to get it produced and delivered to the market.

So, a situation in which there is an investment fund financing CERTI and holding a share of the capital is not something you would consider.

No, because all the work that we do is done for a client. Of course, if the client wishes to do so, he can try to get funding from the government, he can ask for a loan; there are very interesting lines of credit made available by the BNDES and by FINEP. BADESC can also provide funding, in this case, to the client that is hiring us. There is also a possibility of venture capital, especially for small and medium-sized enterprises, of which there are a few, very innovative ones here in Florianópolis. So if one of the companies here has a really good idea and is in need of technological assistance like the one we provide, the funding solution may be this venture capital. So we are looking into that as well.

The CERTI foundation – nowadays, works in close cooperation with associated institutions. CERTI Amazonia Institute in Manaus, which works especially with companies from the Manaus Technology Pole and Sapientia Institute, which is headquartered in Brasília and has a branch at the Sapiens Park. So these groups of people, in these organizations, are what constitute a network of competences to help Brazilian or foreign companies create solutions. And that is the primary mission of the CERTI foundation.

Now, within our organization, we have two more work fronts, which are quite different: One of them concerns the field of metrology, all aspects related to quality, testing etc. These are what we call technological services. We currently have a very wide range of services available. We have the widest spectrum of services in the field of geometric metrology. For instance, if a company from the Brazilian Northeast is faced with the challenge of calibrating a master part, or measuring a complex component, they will have to take the part, put it on an airplane and send it to our facilities, so we can make these measurements with accredited instruments, etc. We do this kind of work continuously, for about 1000 companies from all over the country. So this is another focus point that we have – we provide a whole set of technological services, regarding geometry, mass, force, pressure, temperature, etc.

And then there is the third field, which is innovative entrepreneurship. When CERTI was created, it also aimed to promote regional development. At a point, there was some criticism directed at us because we were developing products for companies from São Paulo, from Joinville, and what about Florianópolis? And what we answered was: well, these companies do not exist in Florianópolis! This was back in the 1980s, and it was when the state government decided to create the business incubator. So CERTI actually created the first business incubator in Brazil. We did this with a great commitment and dedication and it ended up becoming a national reference for incubators. But the most important aspect is that it changed Florianópolis’ economic profile. Back then, all we had was public service, administration and tourism. Nowadays, the mayor will state anywhere that the primary source of income for Florianópolis is the technology industry. He has actually given Florianópolis the title of “capital of innovation”, because it is, in fact one of the cities with the largest number of innovative companies. Those innovative companies have grown quite quickly, and today we can see the Estado de São Paulo newspaper announcing that, in 2012 Florianópolis attained the record figure of R$1 billion in revenue from these companies. When we started out, 25 years ago, we were having trouble getting investors to build one company. So we started out small, but 25 years later, here we are, at the R$1 billion milestone.

Now, we are indeed in a privileged situation – we have a university that is quite well renowned, competent and with a history of technological research. The talent pool, where all the knowledge and all the entrepreneurs come from, is the university, which is still as strong as ever. But none of this could have happened if we had not created the mechanisms for it, the incubator, the technology park, etc.; now we are launching another program, which is a rather enticing one, called “Sinapse da Inovação” [Innovation Synapse]. It aims to call out for entrepreneurs with the best ideas. This work used to depend on personal initiative, but we have created this system to channel this talent. It is being very successful so far, and the Santa Catarina State government has hired the CERTI foundation to do this in the whole state. They have cleverly adopted a development strategy based on innovation, on the work made in universities; so, it is very interesting for companies to come here, especially companies that are technologically advanced and that wish to develop new products, because they will find the right atmosphere here.

What is your vision for the future of CERTI in two years or so. What are the big projects in the medium term?

Well, the CERTI foundation has systematically created quality and productivity programs. We draw up a Strategic Development Plan for each decade. We have just concluded the strategic plan for the 2011 – 2020 period. Our mission, or what we propose to accomplish, is to triple the dimension of our institution and to triple our capacity to provide assistance to the industrial sector, and also the government sector. We see this as absolutely necessary, because the country and the companies will need solutions. Of course we are not the only ones working on this, there are other initiatives; but we understand that the way we work causes a definite impact. CERTI delivers innovative solutions that give a competitive edge to the companies. So, it is necessary that Brazil has powerful institutions, as is the case in Korea, in Taiwan, where they have this kind of institutions that push development forward.

So, in terms of our objectives, we need to triple in 10 years what we have accomplished in 30.

Is there anything else you would like to add?

I forgot to mention a project that we are currently working on with Phillips in the field of OLED lighting. And this project has a very interesting aspect. Phillips is, nowadays, a world leader in the OLED technology, which involves organic-based semiconductors. Phillips is introducing this technology into the world market. They are developing highly sophisticated solutions for the Unites States, Europe, Asia, etc. But what we are currently working on with them – in continuation of our long lasting partnership – is a project, which we are leading, to create solutions for emerging markets. We will develop, together with Phillips, lighting systems that might be an interesting solution for a country like Brazil, which, regarding lighting, is in a different situation than Europe or the United States. We are involved in all the stages of this project, from the semi-conductor technology, electronics, which is one of our strongest areas of knowledge, and even in the design of these new solutions. This project is funded by BNDES, our development bank. It intends to introduce this technology in Brazil, with solutions designed for the Brazilian market but also applied overseas. So the idea is that we work on solutions that are adequate to our market, Phillips expands the OLED business on this market, to the point that could justify a factory to produce OLEDs in Brazil. So this is an example of the sort of projects we get involved in, together with world leading companies that want to enter the market and offer customized solutions for the Brazilian market. For instance, we are now just starting a partnership in the field of solar power.

So, all the examples we have discussed show that our institution always works together with the client company itself, with the federal university, with great technology centers, etc. and, this way, we can carry out projects to develop great solutions, with reduced costs and most of all, we can do it quickly. Agility is primordial.