Factors determining the path of digital technologies adoption of Brazilian industrial firms

Urraca-Ruiz, Ana; Torraca, Julia; Britto, Jorge; Ferraz, João Carlos

doi:10.20396/rbi.v22i00.8668448

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ARTICLE Seção Especial - Digitalização da Indústria (DIGIND) • Rev. Bras. Inov. 22 • 2023 • https://doi.org/10.20396/rbi.v22i00.8668448 copy

Factors determining the path of digital technologies adoption of Brazilian industrial firms

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

This paper aims to identify the main factors affecting the adoption of digital technologies for a panel of 299 Brazilian industrial firms surveyed in 2017 and 2019/20. A probabilistic model is used to estimate the likelihood of certain organizational, technological, and environmental characteristics of the firms affecting digital adoption in the two survey periods. The study reveals that digital adoption has advanced but still is at an infant stage in Brazil. The econometric results point out that current adoption, size, belonging to high digital intensity industries, being an exporter, and training the workforce have a significant positive effect on digital adoption. However, skills qualification has a negative effect, suggesting that qualification on previous technologies can be more a constraint than a pre-requisite for digitalization. One must interpret such findings against growth-adverse, investment-hostile economic framework conditions where firms can react in any given direction: move forward to survive, stay put to face uncertainty, and/or backtrack defensively.

KEYWORDS
Digital technologies; Technology adoption; Industrial firms; Brazil

Size	Number	Share (%)	STEM Qualification	Number	Share (%)
< 50 employees	47	15.7	Low	85	28.4
50-100 employees	107	35.8	Medium-low	57	19.1
>100 employees	60	20.1	Medium-high	78	26.1
Large	85	28.4	High	59	19.7
			N/A	20	6.7
Digital Intensity	Number	Share (%)	Perform R&D	Number	Share (%)
Low	53	17.7	Yes	174	58.2
Medium – Low	120	40.1	No	125	41.8
Medium – High	101	33.8
High	25	8.4
Perform exports	Number	Share (%)	Perform Training	Number	Share (%)
Yes	127	42.5	Yes	182	60.9
No	172	57.5	No	117	39.1
Total = 299

		Current adoption in 2019/20
		G1	G2	G3	G4	Total
Current adoption in 2017	G1	21.0	12.4	11.5	0.7	45.5
	G2	14.5	8.4	10.1	1.1	34.1
	G3	7.1	5.2	6.2	0.7	19.3
	G4	0.6	0.2	0.3	0.0	1.1
	Total	43.1	26.2	28.2	2.5	100.0

		% By the nature of firms					% By the type of movement
		Moving forward	Standing still	Moving backwards	Total		Moving forward	Standing still	Moving backwards
Size	Small-medium & small	33.8	37.7	28.6	100		47.7	54.5	52.6
Size	Medium-large & large	39.3	33.3	27.4	100		52.3	45.5	47.4
						Total	100	100	100
R&D	Engaged in	50.8	29.1	20.1	100		81.0	47.6	41.8
R&D	Not engaged in	16.5	44.5	38.9	100		19.0	52.4	58.2
						Total	100	100	100
Share of STEM qualified employees	Low	41.2	33.3	25.5	100		32.1	26.6	25.9
	Medium-low	28.7	35.1	36.3	100		15.0	18.8	24.7
	Medium-high	41.0	34.2	24.8	100		29.4	25.1	23.1
	High	29.4	40.7	29.9	100		15.9	22.6	21.1
	N/A	41.7	36.7	21.7	100		7.6	6.9	5.2
						Total	100	100	100
Training	Engaged in	50.5	29.7	19.8	100		84.4	50.8	43.0
Training	Not engaged in	14.5	44.7	40.7	100		15.6	49.2	57.0
						Total	100	100	100
Export	Engaged in	48.3	31.8	19.9	100		56.3	37.9	30.3
Export	Not engaged in	27.7	38.4	33.9	100		43.7	62.1	69.7
						Total	100	100	100
Sectoral digital intensiveness	Low	32.1	37.1	30.8	100		15.6	18.5	19.5
	Medium-low	38.3	34.2	27.5	100		42.2	38.6	39.4
	Medium-high	33.3	37.3	29.4	100		30.9	35.4	35.5
	High	49.3	32.0	18.7	100		11.3	7.5	5.6
						Total	100	100	100

Moving forward	Generation^* * Firms can move forward from G1 to G2 to G3 only. (ST) subtotals; (S-MS) Small-Medium/Small; (ML-L) Medium-Large/Large; (H) High; (M-H) Medium-High; (M-L) Medium-Low; (L) Low.	Size		Digital Intensity				R&D		Training		Export
Moving forward		S-MS	ML-L	L	M-L	M-H	H	Yes	No	Yes	No	Yes	No
327 cases or 36.3% of total cases	G1	37.0	30.0	9.0	29.0	22.0	7.0	52.9	14.4	56.0	11.3	36.7	30.6
	G2	11.0	20.0	7.0	13.0	7.0	4.0	26.6	4.3	26.9	4.0	18.0	12.8
	G3	0.0	2.0	0.0	0.0	1.0	0.0	1.5	0.3	1.5	0.3	1.5	0.3
	ST	47.7	52.3	15.6	42.2	30.9	11.3	81.0	19.0	84.4	15.6	56.3	43.7

Standing still	Generation^* * Firms can stand still in all digital generations. (ST) subtotals; (S-MS) Small-Medium/Small; (ML-L) Medium-Large/Large; (H) High; (M-H) Medium-High; (M-L) Medium-Low; (L) Low.	Size		Digital Intensity				R&D		Training		Export
Standing still		S-MS	ML-L	L	M-L	M-H	H	Yes	No	Yes	No	Yes	No
319 cases or 35.6% of total	G1	38.0	21.0	13.0	22.0	22.0	3.0	14.7	44.2	16.9	42.0	14.4	44.5
	G2	11.0	12.0	3.0	10.0	10.0	1.0	16.6	6.9	16.9	6.6	10.7	12.9
	G3	4.0	13.0	3.0	7.0	3.0	4.0	16.3	1.3	16.9	0.6	12.9	24.0
	G4	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
	ST	54.0	45.5	18.5	38.6	35.4	7.5	47.6	52.4	50.8	49.2	37.9	62.1

Moving backwards	Generation^* * Firms can move backward from G4 to G3 to G2 only. (ST) subtotals; (S-MS) Small-Medium/Small; (ML-L) Medium-Large/Large; (H) High; (M-H) Medium-High; (M-L) Medium-Low; (L) Low.	Size		Digital Intensity				R&D		Training		Export
Moving backwards		S-MS	ML-L	L	M-L	M-H	H	Yes	No	Yes	No	Yes	No
251 cases or 28.0%	G2	28.0	24.0	12.0	18.0	19.0	3.0	17.5	34.3	16.7	35.1	14.3	37.5
	G3	24.0	19.0	7.0	18.0	16.0	3.0	22.7	21.5	24.3	19.9	14.7	29.5
	G4	1.0	3.0	0.0	4.0	0.0	0.0	1.6	2.4	2.0	2.0	1.2	2.8
	ST	52.6	47.4	19.5	39.4	35.5	5.6	41.8	58.2	43.0	57.0	30.3	69.7

Variables	Odds Ratio	Std. Err.	z	P>z	[95% Conf. Interval]
Current_Adoption_2017	0,496648	0,0839501	-4,14	0.000***	.3565884	.6917198
Size	1,33808	0,2027869	1,92	0.055*	.9942185	1,800869
Digital Intensity: contrasting with low digital intensity
Medium-Low	1,174069	0,2480338	0,76	0.447	.7760122	1,776308
Medium-High	0,940225	0,2082944	-0,28	0.781	.609059	1,1451457
High	2,171465	0,6559755	2,57	0.010***	1,201197	3,925467
Skill level: contrasting with low skill
Medium-Low	0,5626376	0,1217864	-2,66	0.008***	.3681128	.8599566
Medium-High	0,9720233	0,1824165	-0,15	0.880	.672875	1,404168
High	0,630548	0,1350863	-2,15	0.031**	.4143429	.9595695
Intercept	0,0162819	0,3711691			-.7111962	.7437601

Variables	Odds Ratio	Std. Err.	z	P>z	[95% Conf. Interval]
Current Adoption_2017	0.3821444	0.0683334	-5.38	0.000***	0.2691655	0.5425448
R&D	1.588728	0.5205435	1.41	0.158	0.8359016	3.019563
Training	4.001667	1.35538	4.09	0.000***	2.060325	7.77224
Exports	1.350784	0.2389716	1.70	0.089*	0.9549864	1.910622
Intercept	0.7149326	.2601902			0.2049691	1.224896

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E-mail: rbi@unicamp.br

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[1] Conflict of interest: The authors declare that there is no conflict of interest.