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Diplomacy in Action

Remarks at the 2nd U.S.-Brazil Innovation Summit


Remarks
James B. Steinberg
Deputy Secretary of State
Brazilian Agency for Industrial Development, Georgetown University
Washington, DC
September 21, 2010

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DEPUTY SECRETARY STEINBERG: Well, thank you, Lee. It is a great pleasure to be here and I really – this is a beautiful place to have a luncheon and a discussion, and I’m looking forward to having a chance to talk to you and getting your thoughts and comments as well today.

As Lee said, it’s been an important part of our Administration to make sure that, although many of the crises of the world do look East and West, that many of the opportunities that the United States has, in partnership with our friends in this hemisphere, are in the North and South. And really from the beginning of the Administration, we’ve tried to put an emphasis on hemispheric relations.

One of the President’s first meetings was with the president of Mexico. And as you know, one of his earliest trips was to the Summit of the Americas, which reflected the strong commitment that we have to building hemispheric cooperation. And the Secretary of State herself has made several trips and been involved both in bilateral and multilateral initiatives throughout the hemisphere and this has been a big priority for her.

We understand the opportunities and the real dynamic of this hemisphere in areas of not only economics, but politics, security, health and the like. And so there is so much that we can do together, and that’s why it’s so important and I’m so appreciative of you pulling together this remarkable group of people from government, the private sector, NGOs, and others to talk about how we can cooperate together and how we can innovate together, because the great strengths of vibrant democracies like ours comes through innovation.

And I’m also grateful to Georgetown for helping to make this happen. I know that universities have an increasingly important role to facilitate these dialogues, and I tried to do that when I was at the University of Texas. And so I applaud the work that you’re doing here, because I think it’s a great opportunity to talk about the challenges and opportunities facing our two societies.

And I want to pay a particular tribute to our very, very distinguished Ambassador to Brazil, Tom Shannon, a good friend and colleague who is really doing an enormous amount to build and strengthen U.S.-Brazilian relations not only on a government-to-government basis, but on a people-to-people and business-to-business and community-to-community basis. So you’re very fortunate to have Tom, and we’re glad to have him here for this meeting.

I don’t think I need to emphasize to this group how important the – more important than ever, innovation as a key to economic growth, long-term competiveness and broad-based development in our societies. There’s really a simple formula for success: Economies that innovate grow faster over the long term, and just as important, they do better job of delivering economic opportunity to their people and sustaining support for those policies.

What’s more, it’s hard to think of any major challenge faced by our two societies or by the world as a whole that doesn’t require a new commitment to innovation. Whether it’s climate change or energy security, pandemics or famine, violent extremism or the proliferation of weapons of mass destruction, innovation is crucial to overcoming these common challenges.

As the Western Hemisphere’s two largest economies, Brazil and the United States, share both a responsibility and an enormous opportunity to work together to promote and protect innovation. And that requires cooperation not just between our two governments, but between our universities and our corporations and our entrepreneurs and NGOs.

In your discussions and exchanges --and I saw the remarkable program that you’ve developed, which touches on so many of the fundamental challenges our societies face today -- all of you are doing important work in advancing that common objective.

But before you get back to those detailed discussions, I want to use my time with you today to highlight what this summit says about our hemisphere’s enormous opportunity about Brazil’s extraordinary achievements in that respect and about the historic potential of the partnership between our two nations.

Now of course, in this hemisphere it’s not just Brazil that’s come far in recent years. More than ever before, and as much as any other region in the world, Latin America has embraced democracy and has been a model of democratic development that combines markets with a broad societal commitment to expanding opportunity for all of our citizens. In stark contrast to other periods in recent history, a large number of the region’s governments have demonstrated sound economic leadership through the economic crisis that we are all working to face, and managed to return to growth much more quickly than most critics had expected.

Brazil played an important role in restoring regional and global growth, and as a result, large numbers of people are emerging from poverty. Yet despite how far it has come, our hemisphere still has not fully grasped many of the key ingredients of competitiveness and long-term development. In this hemisphere in many places, productivity growth lags, school systems are weak, investment in science and technology is low. Economists note that much of today’s growth in this region is thanks to high commodity prices and that the region must find ways to translate resource wealth into value-added industry.

So that, as we see it, is the key challenge for our hemisphere – unlocking the potential of our people and our economies by expanding opportunity, raising productivity, and encouraging investment in economic sectors that drive innovation and add real value. In addressing this challenge, we’re at a moment of historic opportunity that we can’t afford to squander. Both of our countries can and must be engines of these advances.

One crucial task for governments is creating an environment that favors and fosters innovation. Individual countries need to get a range of policies right, whether it’s in education, R&D funding, good governance, transparent regulatory policies, and competitive markets. The specifics in the mix may differ from country to country. But at bottom, there are basic elements and shared experiences that we can all share and benefit from.

It takes the right incentives, such as tax credits to spur research in promising sectors. It takes effective protection of intellectual property so that we adequately reward risk and expedite products from the lab to the marketplace. It takes industry, academia, and government coming together to foster networks of innovation and cultures of innovation. This summit and the learning laboratories established under the auspices of the U.S. Council on Competitiveness, the Brazilian Competitiveness Movement, and the Brazilian Agency for Industrial Development are powerful examples of how the right networks and culture can be promoted.

Also important is working to maintain and strengthen an open rules-based global economy. It’s worth remembering that less than two years ago when we first took office, many people were predicting a Great Depression-scale collapse in trade and foreign investment and a universal withdrawal from our increasingly interconnected global economy. But thanks to a concerted and coordinated global response led by groups like the G-20 – which was effective, in part, because it brought to the table emerging powerful economies like Brazil – that collapse never came.

And now our challenge is to make sure that we don’t face that risk again, because given how essential foreign investment and globalized networks are to innovation and technological development, such a collapse would have catastrophic consequences for all of us.

The United States has embraced foreign investment in our own economy as a key engine of growth in job creation. Foreign direct investment in the United States supports more than 5 million American jobs, accounts– for nearly 15 percent of R&D, and contributes to the production of nearly 20 percent of our exports. A welcoming environment for foreign investment with fairness and transparency in international business practices can drive innovation and job creation not just here but all over the world. Given the realities of a single global market, we need to level playing fields and ensure equal market access across not just one nation but all of us.

Brazil’s own trajectory over recent decades illustrates clearly the points I’ve just been discussing. Brazil has committed itself to democratic development as much as any nation, and in doing so has defined a successful model that brings growth and the increasing global clout of its society, its businesses, and its government – all in the context of democracy and social justice.

The story, of course, has benefitted – most importantly – the Brazilian people. Tens of millions have risen into the middle class. With continued success and further refinement of this model, Brazilian parents today can look forward to a future in which their children and grandchildren will enjoy even more opportunity, prosperity, and security.

And what’s been notable is that Brazil is not just building a democratic state in its government institutions, it is also building a democratic society. Social innovation such as Brazil’s pioneering use of conditional cash transfer programs has played a key role in this. As I’ve noted already, unlocking the potential of young people is crucial to achieving the potential of any economy. Brazilian companies and investors are now world-spanning and world-class as many Americans recognize when they notice that two of our most iconic American brands, Budweiser and Burger King, are now partly Brazilian-owned.

And innovative agricultural research in Brazil involving both public and the private sectors, often working together in pioneering ways, has made it a world leader in global food production and a model for other developing countries looking to strengthen their agriculture sectors as engines of growth.

From the United States perspective, Brazil’s experience carries significance far beyond Brazil’s borders. And that’s why we see such potential for a more global partnership between the United States and Brazil as well as other likeminded nations in our hemisphere, one that brings our unique experiences together to benefit not only our own societies but the global system as a whole. This is an extraordinary opportunity for both of our countries and much of our diplomacy with Brazil, like the summit, focuses on how we can start seizing that opportunity.

Now, as you know, President Obama has made innovation a priority as part of his economic policy. This innovation strategy, supported through tens of billions of dollars in the Recovery Act as well as a range of other initiatives, is focused not just on investing in the building blocks of American innovation, the right mix of incentives, infrastructure, and investments in human and technological development; it’s also about developing markets that encourage and support innovation and catalyzing breakthroughs in key areas.

Above all, the President has shown that while a commitment to innovation begins at home, in today’s world, building of the innovation of the economy of the future is a global task, one that must infuse our diplomacy and development efforts.

That’s why it’s so important that this commitment to innovation is shared by our partners in Brazil and why the potential of our partnership so vast. Brazil is a priority market under President Obama’s National Export Initiative, and Brazil surely sees a similar opportunity when it looks towards the United States, one of its largest trading partners. And increasingly, the expansion of our bilateral relationship reflects a shared recognition of this potential.

It can be seen in the U.S.-Brazil commercial dialogue, also taking place in Washington this week, which will, among other things, consider new bilateral cooperation on green technology, intelligent transportation standards, and customs modernization. It can be seen in the joint committee meeting on science and technology, which recently examined the connection between innovation and entrepreneurship and the role of small and medium enterprises in cooperative research and development projects.

It can be seen in the corporate social responsibility efforts of U.S. companies in Brazil, working in partnership with Tom Shannon and the people in our embassy, and in the U.S.-Brazil CEO Forum, whose recent meeting in Denver also focused on the importance of innovation and fueling economic growth. It can be seen in the rapid growth of bilateral scientific collaboration, much of it funded by grants from the National Science Foundation and the National Institutes here on everything from health and aeronautics to space technology and deep sea oil exploration. And it can also be seen in initiatives like our joint action plan to eliminate racial and ethnic discrimination and promote economic equality in our two countries.

The concrete benefits of this partnership are becoming clear. For example, on our cooperation on biofuels, ratified by a bilateral agreement on energy matters signed earlier this year, we, together, are leading the world. We account for almost three-quarters of the global biofuels production, and together we can develop new technologies in a global market for biofuels that will drive green growth and help advance our shared interests in combating global warming.

In our cooperation on fuel security, an area where Brazil is a global leader, which we will be discussing in the coming days in New York, we are jointly supporting research projects like the one in Mozambique that brings together the expertise and resources of the Brazilian Cooperation Agency and USAID. And we’re exploring ways to encourage value-added manufacturing and technological innovation in both of our economies, recognizing that working together, we can achieve much more than just working alone. One powerful example of this win-win potential is the fact that Brazil’s largest exporter, Embraer, claims the United States both as its major supplier of parts and its major buyer. By collaborating on the smart systems needed to support sustained prosperity in this century, in areas ranging from civil aviation and telecommunications to agriculture and health, we will be able to have even more success stories to recount in the years to come.

But finally, as I observed earlier, we must recognize that social inclusion must be an integral part of any innovation agenda. An economy can’t take off if important parts of its members are being left behind. Citizens can’t become innovators and productive contributors to growth if they don’t have access to good education or the financial system or opportunities to lift themselves up. Secretary Clinton often says that while talent is universal, opportunity is not. Social inclusion is about giving all of society’s members the ability to contribute to long-term development and growth. And I might add, for the Secretary, an important component of that, of course, is the role of women.

And the importance of social inclusion is another reason why our partnership with Brazil is so crucial to promoting innovation; because of Brazil’s own record and commitment to advancing social inclusion at home and the expertise and resources we can share with others in this hemisphere and elsewhere to advancing inclusion everywhere. Now, I’ve obviously focused today on the role of Brazil and our bilateral cooperation, but these same challenges and opportunities permeate our region as a whole -- the policy progress, the strong growth, the commitment to democratic development, and the increasingly global and worldwide companies, the potential that we have to play such a critical role together.

Governments across the hemisphere have begun to explore new ways to promote opportunity so that all citizens can contribute to their development to create a climate that encourages productivity and innovation and to improve their policies, like taxes and budget practices, to strengthen their fiscal footing, and to show all of their citizens the direct benefits of their hard-earned contributions, whether it’s using copper resources to fund scholarships in Chile or improving fiscal practices to support domestic security in Colombia. That’s why so many of our most important initiatives are focused on building networks in which we can share practices for advancing both inclusion and innovation.

Our Energy and Climate Partnership of the Americas does so on issues of clean energy and climate change. Pathways to Prosperity pools together the expertise and experiences of countries in this hemisphere to commonly advance our interest in development. In so many of these places, we have worked together to help people in indigenous and Afro-Caribbean communities. The Inter-American Social Protection Network that Secretary Clinton launched last year has convened leaders and experts to learn about innovative social protection programs such as the Bolsa Familia in Brazil. And we are starting something called the E-Mentor Corps, so that small businesses who want advice can get it from comparable businesses in the United States.

I’ve had a chance just to touch on a few of the many exciting aspects of our partnership with Brazil and our other partners in the hemisphere this morning, but I think it demonstrates both the potential that we have together and the importance that the United States attaches to working with Brazil and our other partners in the hemisphere to achieve these important results, to provide the kind of opportunities that will drive the expansion of our economies and deliver broad-based opportunity to our people.

So I’m very much appreciative of the work that you’re doing here, the kind of practical discussions and shared conversational exchange of experience and best practices, which I think can help propel our relationship even further forward in the future. Thanks for your time and I’m happy to take a few of your questions or comments.

(Applause.)

There – I know you’re all – I stand between you and lunch, and I know that’s always – (laughter) – a good reason. Please.

QUESTION: Mr. Secretary, today we’re going to be talking about the agenda going forward, and if you can think of some of the grand challenges that you mentioned, what would you recommend as one of the most important areas for us to really concentrate through our partnerships with Brazil?

DEPUTY SECRETARY STEINBERG: Well, I think if you think about some of the big issues on our global agenda, I think you can see the potential here in the bilateral relationship. One of the things that the Secretary and I like to talk about a lot is the fact that we live in a world today where, among most of the nations of the world, we no longer face conflicts, but rather shared opportunities and dangers, and that one of the big challenges that we face is the need to find ways to enhance cooperation to deal with these transnational problems, whether it’s food security, whether it’s global health issues, whether it’s clean and affordable and secure sources of energy.

And I think just to touch on those things shows how – what the potential is for U.S. and Brazil, because in all of those issues, whether it is food security, whether it is global public health, whether it is climate and energy, these are areas where both countries have great strengths. And our ability to harness not just the public sector, but the private sector and the academic and research communities are all areas where Brazil’s strengths complement ours and where we have a lot to contribute to the world. So it’s looking at that global agenda and recognizing that these are two countries which are uniquely well-placed to provide leadership; not that we will solve it on our own, but that we can provide a kind of a spearhead in thinking about innovative ways to use technology, collaboration, and innovative approaches to contribute to these great global challenges.

I think you’re going to let me get off easy. Right in the back.

QUESTION: Mr. Secretary, when do we expect a visit of President Obama in Brazil?

DEPUTY SECRETARY STEINBERG: One of the things I’ve learned, as you heard from my bio, is I used to work at the White House and that the White House likes to reserve the prerogative of deciding the President’s own scheduling. But I’ve been pleased that the Secretary has been able to have such an extended engagement and, as I mentioned, I had a chance to have a brief meeting with the foreign minister just last week at a conference we were both attending in Geneva. So there is a robust set of exchanges between our two countries, and I’m confident that this is an issue that the White House will be looking at carefully as we look at the President’s agenda in the months to come.

There you go. All right. (Laughter.) Thank you all very much. (Applause.)

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