This article examines how public policies to foster innovation affect companies' behavior. Based on the case study research method, the article identifies how firms operating in the Brazilian electric power and IT sectors of the Manaus industrial district have responded to public efforts to stimulate technological innovation in both sectors. In general, the results suggest that these policies have increased private interest for innovation. However, this interest is greater among state controlled and multinational corporations than among domestic private companies. This finding is particularly relevant because domestic companies operate in deregulated markets with increasing competitive pressures. The limited interest of domestic companies for innovation suggests that innovation policies should not be limited to supply side factors and cannot be dissociated from policies aimed at strengthening the institutional environment.
innovation; technological learning; public policies
