On the ground in the Brazilian growth engine

On the ground in the Brazilian growth engine
Much like China over the last 20 years, Brazil is experiencing an economic boom. But while a lot of the attraction has been focused on Rio de Janerio and Sao Paulo, you probably have to go off the beaten track to see the real story. Places like Campos, Quissama and Barra do Furado is where the future is happening – today.

I recently had the privilege to spend a few days in the area, seeing events unfold first hand. Meeting with Brazilian firms gives an opportunity to understand the challenges and opportunities from the Brazilian side of things. To understand business possibilities in Brazil, you need to go out and get your shoes dirty, off the beaten path of the big cities. Here are some of my reflections.

Think bigger – and execute
20.000 inhabitants, 1.800 employees in the municipality; yet the ambition is to build an offshore supply and logistics base four to six times the size of Dusavik, Stavanger, Norway. Complete with Heliports, training facilities and shipyards. And while you’re at it, the housing and hotels to influx of workers
That’s the kind of thinking I find. This is the kind of “Think Bigger”, that’s happening in Brazil today. But it is more than just thinking. It’s already being executed.

Today, Zones are regulated. Zoning regulation is something that can take 4 – 6 years in Brazil, due to highly complicated environmental laws and bureaucratic procedures. That’s done.

What used to be beach huts and kiosk, are now seeing the first buildings go up. Petrobras’ engineering arm is hard at work on phase one of the construction plan. And the first four firms are already signed on. (See also our previous post Port O’hoy)

Using Youtube to attract foreign investments
As a small municipality, the economic development team could easily blame scare resources. They don’t. Instead they are using a series of innovative strategies to attract foreign investments. Youtube, being one of them. Asking if we could get a copy of the well produced movie, the reply was “Claro, na Youtube”. (You can watch the two clips here and here)

Meeting with the local press

During our meetings, we were joined by local press. More than just reporting, they were obviously curious to learn more. The kind of questions they were fielding, indicated a desire to gain more knowledge into how to construct the solutions for Brazil’s future growth. My experiences from working with the Norwegian oil & gas industry proven interesting to them, as we dwelled into similarities and differences between the two countries on-going economic development. Special attention was given to the historical development of the entire oil industry in Norway and the growth of supply bases along the coast.

Some of my meetings centered on a small prefeitura some hours outside of Rio. Coming from a history of sugarcane farming, slavery, coconuts and pineapple, today it is located in the middle of the oil adventure that is Brazil. But with a lack of experience, expertise and training, they were learning on-the-go, as the economic development was shooting up around them.

Massive management education
As we describe in our upcoming blog post “A growth model for Brazil”, this preifetura is in the middle of stage one; Infrastructure, infrastructure, infrastructure. Roads, airports, harbors, rail, electricity, sewage, water supply, Internet, 3G, 4G and housing are just the top of the list. But to get this right, long term perspective and good management is required. And this often requires education. The next decade is ripe for corruption, mismanagement and wasted resources. Education, in particular executive education on a massive scale could be the key to successfully sustain Brazil boom.

A significant challenge
Brazil’s human capital challenge is significant. But the country is progressing quickly in the right direction. Foreign firms considering a Brazil strategy, should get on the ground to understand both the political, economic and social aspects of developing your business model for Brazil. Few places gives you this kind of insight as learning from these rapidly evolving prefeituras in the south of Brazil.

On the ground in the Brazilian growth engine

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