**4. Results**

The design of armored vehicles requires complex innovation, since it aims to integrate and balance firepower, mobility, and armored protection in the same vehicular platform [38]. By focusing on the interactions between the involved actors, this section describes the Cascavel and Osorio ecosystems developed by Engesa and the Guarani ecosystem built by Iveco.

### **4.1 The Cascavel ecosystem**

In 1952, after the Second World War (WWII), Brazil and the United States signed a military agreement aiming at a common defense for both countries [39]. The negotiation allowed the provision of military vehicles from the United States to Brazil, such as tanks, wheeled armored vehicles, trucks, jeeps, and tractors. However, during the 1960s, the United States began to restrict sales of military equipment to Latin American countries [40]. As a result, at the end of the 1960s, the Brazilian auto industry started substituting, adapting, and refurbishing many of those vehicles. For example, working on adapting gearboxes and suspensions, Engesa developed a new suspension system called Boomerang, which was used to adapt more than a hundred military trucks used by the Brazilian Army and Marines [41].

In 1970, the Brazilian Army and Engesa also completed the prototype for Brazil's first wheeled armored vehicle. It was a 4 4 vehicle named VBB-1. Ladeira Jr. [42] listed Engesa among the leading suppliers for the gearbox and traction, Mercedes-Benz for the diesel engine, and Trivellaco for the armor. Although the prototype was approved in tests, the Brazilian Army was willing to use a 6 6 vehicle [43]. Then, a new model was designed and developed. It was a 6 6 wheeled armored vehicle for reconnaissance named EE-9 Cascavel. Another vehicle was also developed by Engesa using the Cascavel platform: a 6 6 wheeled amphibious armored personnel carrier. It was named EE-11 Urutu. Later, using 4 4 traction, Engesa developed a lighter vehicle for reconnaissance, the EE-3 Jararaca [40].

In 1970, Engesa delivered the Cascavel prototypes to the Brazilian Army and Urutu to the Marines. Serial production started in 1974. However, Engesa realized the internal market was insufficient to promote the company's business expansion [41]. Thus, Engesa's salespeople went abroad and offered their vehicles, including two newly developed trucks, to recently independent African countries looking for new business options apart from their former colonizers. At the same time, the oil crisis in 1973 made oil-producing countries in Africa and the Middle East rich overnight, thus increasing their need for defense equipment. As a result, Engesa found a favorable environment for its military vehicles in the international market [42].

Over time, Engesa improved Cascavel to deliver a better product to the external market. The US 37-mm cannon was substituted by a French 90-mm cannon, improving the range and aim. However, after selling the first lot of 200 cannons, the French company raised prices and made the business unfeasible. To get around this situation, Engesa acquired licenses from the Belgium company Cockerill and started producing the 90-mm cannon and its ammunition in Brazil. In addition, Engesa increased the vehicle dimensions and adapted a Mercedes-Benz engine. As a result, Cascavel became a more suitable product for the external market [42].

Several countries ordered Engesa's vehicles in the following years. Qatar is regarded as one of Engesa's first international contracts [41]. Libya ordered 200 Cascavels initially, and even before receiving them, it ordered another lot of 200 vehicles. At the same time, Engesa sold about a hundred Cascavels to Chile. New sales were also made to other African and South American countries. Regarding the Iran-Iraq War in 1980, Iraq emerged as another relevant importer of Engesa's armored vehicles [42]. **Table 2** summarizes Engesa's international orders from 1970 to 1990. Comparing these purchases with the Brazilian internal market, the Brazilian armed forces ordered 409 Cascavels and 223 Urutus [44].


*Dynamics of Innovation Ecosystems: Orchestrating Actors and Interactions in Emerging… DOI: http://dx.doi.org/10.5772/intechopen.111629*

*Source: The author, according to the Stockholm International Peace Research Institute (SIPRI) Arms Transfers Database. Information in brackets indicates that the accuracy of the data is uncertain.*

### **Table 2.**

*Engesa's international orders for wheeled armored vehicles (1970–1990).*

### **4.2 The Osorio ecosystem**

At the beginning of the 1980s, Engesa realized that the market niche of main battle tanks might be another opportunity to diversify its armored vehicle portfolio [41].

Therefore, the company started developing the tank EE-T1 Osorio in 1982, intended to reach both internal and external markets. Due to the need for a more sophisticated embarked technology, Engesa adopted a different approach to suppliers and complementors. While the previous wheeled vehicles relied mainly on the Brazilian auto industry, the Osorio tank became widely dependent on European companies [42]. Engesa also faced retaliation from international competitors. They warned European suppliers and complementors about the inconvenience of cooperating in Engesa's new development [42]. **Table 3** presents Osorio's leading suppliers and complementors according to Conca [45].

During the 1980s, Saudi Arabia negotiated with Germany to substitute the German tank Leopard-1 with the new version, Leopard-2. However, the German government refused to sell the tanks to countries outside the North Atlantic Treaty Organization (NATO). Aiming to occupy this new market, Engesa sent a prototype of Osorio to Saudi Arabia in 1987 to compete in international bidding against tanks from the United Kingdom, France, and the United States. Although Osorio was declared feasible in the bidding, Saudi Arabia decided on the US M-1 Abrams in 1990 [40]. At that time, Engesa's exports had also deeply declined, and some customers could not pay for their orders [46]. For example, Iraq stopped paying the contracts in 1987 as the oil price had decreased and the Iran-Iraq War (1980–1988) had depleted its financial resources [42]. These facts led Engesa to declare bankruptcy in 1993 [40].
