Business Modeling and Public Policy in High-Tech Industries: Exploratory Evidences from Two Brazilian Semiconductor Support Programs

Abstract

This paper adopts an exploratory analysis based on a multiple case study to investigate the interplay of Small and Medium Enterprises (SMEs) business modeling strategies and Science, Technology and Innovation (STI) policies in a mid-income country efforts to develop a national semiconductor industry. Specifically, we analyze how 22 Brazilian SMEs supported by two comprehensive federal programs designed and implemented business models and strategies in an attempt to, on the one hand, meet the scope and timing of public funding resources and, on the other hand, develop capabilities to enter the industry’s global value chain. Drawing on a wide body of literature and on the evidence collected, we identified and categorized the firms’ business models into five groups: Pure Play IP, Pure Play Design, Fabless, Fabless Plus and Captive. We then analysed the firms’ within the specificities of each group. The paper shows that, in addition to business models and strategies oriented to meet short-term survival needs, the financial benefits for firms were low and unstable, with recurrent and unresolved frictions between policy-makers, planners and firms.