Abstract for: A Systemic Analysis of the Effects of Public Investment on Innovation Ecosystems Using System Dynamics

Public investment policies in science, technology and innovation (STI) generate dynamic, non-linear effects on innovation ecosystems. Understanding how investment decisions shape capacity accumulation and innovation outputs over time is critical for evidence-based policymaking, yet few studies apply formal simulation methods to this problem in the Brazilian context. A System Dynamics model was built in STELLA® using historical data from Brazil’s FNDCT fund (2010–2024). The model represents infrastructure and human capacity stocks, interconnected through investment flows and structural delays, feeding a sequential innovation pipeline. Three policy scenarios were simulated: status quo, investment increase, and investment cut. No empirical calibration was performed; the focus is on relative behavioral patterns. Investment effects materialize with a structural delay of approximately three years. Increased investment leads to progressive capacity expansion and higher patent output over the medium term. Investment cuts produce temporary inertia sustained by accumulated stocks, followed by systemic stagnation. The minimum capacity constraint between infrastructure and human capital consistently acts as the binding bottleneck across all scenarios. Findings suggest that STI policies require long-horizon planning, as short-term cuts may mask structural erosion of innovation capacity. The complementarity between infrastructure and human capital implies that unbalanced allocation reduces system effectiveness. The study contributes by formalizing the complementarity between infrastructure and human capital as a limiting mechanism of innovation within a simulation structure, offering a replicable framework for the analysis of STI public policies. Use of AI: Text assistance for drafting and revision.