Managing technological and social uncertainties of innovation: The evolution of Brazilian energy and agriculture

This paper explores how technological, commercial and social uncertainties shaped the development of Brazilian biofuels. Technological innovation allowed the country to emerge as a global leader, but Brazil continues to struggle with major social uncertainties due to poverty and environmental concerns common in many emerging economies. Contemporary approaches to development within the innovation literature focus primarily on overcoming technological and commercial uncertainties, but only peripherally explore social uncertainties. To fill this void, we draw on Martin and Hall's framework for managing innovative uncertainties, which is based on Kuhn and Popper's approaches to the evolution and methodology of science, and extend it with Aldrich and Fiol's concept of cognitive versus socio-political legitimacy. Based on qualitative data collected in Brazil, we outline the evolution of automotive fuel ethanol and flex-fuel technology, the development of Brazilian soybean production, and castor for socially inclusive biodiesel production. We show how innovation solved some technological and commercial uncertainties and generated new opportunities, but also created additional social uncertainties that are now being addressed. Through this process, Brazil has acquired capabilities in alternative energy technologies and more sustainable agriculture, becoming an exemplar for other emerging economies. We conclude with implications for policy and industry.