Abstract

Over the last 40 years, Brazil has developed a strong ethanol fuel industry. Brazilian ethanol industry has pioneered clean technologies and has currently the most economical technology. The country’s ethanol competitive advantages accrue from natural advantages, as well as technological advances resulting from a Sectoral Innovation System (SIS). However, the country’s leadership in sugarcane ethanol comprises a roughly mature technology, which has been seriously threatened by huge global investments in next generation technologies. These emerging global trends have imposed unprecedented challenges to the Brazilian ethanol industry and have attracted to the country many foreign companies from a wide range of sectors. These trends and changes have been shaping a new SIS and represent challenges and threats to the Brazilian technological leadership. The main purpose of this chapter is to analyze these recent trends on ethanol industry and innovation and to highlight their possible effects on Brazilian sugarcane ethanol innovation system.

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