is also the BRICS country which outsources research the least (7% of innovative firms), compared to one in ten in India and one in five in the other BRICS. Brazil also trails other Latin American countries. A much higher percentage of firms report in-house research and development in Costa Rica (76%), Argentina (72%), Mexico (43%), El Salvador (42%), Ecuador (35%) and Colombia (22%). Only 6% of Brazilian manufacturing firms collaborate with universities to develop innovative products and processes, a lower ratio than in Mexico (7%), Colombia (11%), Argentina and Cuba (15%) and, above all, Costa Rica (35%). The tendency for research to flow from the public to the private sector is confirmed by Ruben Sinisterra, a researcher at the Federal University of Minas Gerais who has been developing drugs to alleviate hypertension. Brazilian universities now have the capacity to develop nanoscale materials for drug delivery, he says, but ‘our domestic pharmaceutical companies don’t have internal capabilities in research and development, so we have to work with them to push new products and processes out to market’. Innovation activity ebbed in Brazil between 2008 and 2013, according to a survey of firms by the Brazilian Institute of Geography and Statistics (IBGE). The 2013 survey covered all public and private firms in the extractive and transformative sectors, as well as firms in the services sector involving technology. The drop in innovation was most noticeable in telecommunications, both as regards the production of goods (-18.2%) and services (-16.9%). It is the larger companies which seem to have reduced their innovative activities by the biggest margin between 2008 and 2011. Among companies with 500 or more employees, the share of those involved in developing new products declined from 54.9% to 43.0% over this period. A comparison of IBGE's innovation surveys over the periods 2004–2008 and 2009–2011 reveals that the 2008 crisis has had a negative impact on the innovative activities of most Brazilian firms. ‘Since 2011, the economic situation in Brazil has further deteriorated, especially in the industrial sector. Thus, it can be expected that the next innovation survey [in 2018] will show even lower levels of innovative activity in Brazil. One reason for the drop in public and private investment in research is the economic slowdown. After peaking at 7.5% annual growth in 2010, the economy slowed before dipping into recession in 2015 (-3.7% growth). The government has been forced to adopt austerity