International Competition in High Technology: The Brazilian Aircraft Industry

Abstract

This paper reviews the growth of the Brazilian aircraft industry, and evaluates the strategic choices and government policies that have influenced its development. Brazil's goals of military independence, technological development and improvement of its balance of payments have influenced the development path chosen and the requirements for success. Brazil's attempts to overcome the barriers to achieving technological competence, cost competitiveness, market acceptance and financial sustainability are described. It is argued that the government has played a crucial role in providing financial resources and a protected domestic market, but that it has allowed the key enterprise, Embraer, to maintain an emphasis on commercial viability and international competitiveness. Embraer's emphasis on product niches where it has potential competitive advantages has been a key to its success. It is argued that a clear competitive strategy, based on a thorough analysis to the key success factors in the industry, is a vital link between government goals and support and international competitive success.

A comparative study of technological learning and organizational capability development in complex products systems: Distinctive paths of three latecomers in military aircraft industry

“…In a consistent manner, whereas "make" is available for latecomers with significant resources invested in research and development, "buy" is preferred by production-oriented latecomers with relatively low technological resources. In general, "buy" is the most preferred mode of initial acquisition, as most latecomer countries' begin with maintenance shops, move next to the assembly of imported planes, and to the manufacture under license of military planes for the local market with some eventually doing subcontract work for major aircraft producers' (Moxon, 1987;Frischtak, 1994). These initial acquisition strategies lead us to the subsequent stage of acquisition.…”

“…In a consistent manner, Moxon, one of the first scholars to argue the features special to Embraer's development paradigm, held that "Embraer had focused on the design and manufacture of airframes, and systems integration and testing. Not that it was never involved in pure assembly operations of both military and civilian planes, or in subcontract work, but these were never the company's main concern" (Moxon, 1987). Likewise, Brazil's acquisition mode was based on "make" approach with their focus on technological knowledge.…”

Measuring success: the search for assessment criteria in determining the impact of deregulation in regional aviation

“…The second aspect of technological innovation is a measure of integration which the industry generates. In a flourishing aviation industry with access to innovative ideas, government commitment, appropriate taxation policies and access to skilled labor markets, technological integration can assist in deregulation strategies (Moxon 1987, Goldstein 2002.…”

Interrupted innovation: emerging economies in the structure of the global aerospace industry

“…In addition, insights from the management literature were used to explain firm strategies. The export success of Brazil made it one of the benchmark cases (Sarathy 1985;Moxon 1987;Ramamurti 1987;Frischtak 1992Frischtak , 1994Goldstein 2002aGoldstein , 2002bGoldstein and McGuire 2004). Other countries and companies studied included Indonesia (McKendrick 1992;Eriksson 2003), China (Nolan and Zhang 2002;Goldstein 2006), and Argentina (Hira and Oliveira 2007).…”

“…But no Brazilian enterprise had experience in producing and selling commuter planes to airlines. Frischtak (1992, p.17) and Moxon (1987) note that Embraer chose a unique development trajectory as it skipped the step of locally assembling planes under license. This is true to the extent that Embraer and the government of Brazil did cooperate when it came to targeting capabilities required to fill gaps in the capabilities.…”