The diffusion of technological innovation in the Brazilian ethanol industry

Rogers (1995) defines the diffusion of an innovation as a process by which an innovation increases its acceptation by the market and the evolution of its employment becomes irreversible to an economic sector or to the whole economy. This process presents several determinant factors, where the most important are the amount of initial investments, operation cost, quality, productivity and the movements of the earlier and later adopters of the innovation. This study focuses on the analysis of the technological changing process in the Brazilian ethanol industry. The objective is to achieve a better understanding of the dynamic of the technological evolution and its diffusion among the Brazilian mills and distilleries, considering the most important incremental innovations exploited in the ethanol production process, their productivity improvements, flexibility to convert or change, the consequent cost benefit relations and their diffusion characteristics in the last four decades. The most important result and contribution of the study is the development of a mapping of the diffusion of the most important technological changing in the Brazilian ethanol that presents the evolution of productivities. The model is able to support the investment decisions in the sector, considering its prediction potential regarding the productivity improvements and stagnation cycles.