Brazil needs to be more innovative

Brazil needs to be more innovative: The excellent Schumpeter column drives home the point that not all BRICs are equal.

“Can their country become an innovator in its own right, or is its recent growth little more than a by-product of China’s appetite for commodities?” “Yet Brazil suffers from two huge blocks to growth: red tape and gaping inequality. For all its recent commitment to liberalisation the Brazilian government is still a rule-spewing, incumbent-protecting monster.” “Brazilian companies are also doing far less than their rivals in India and China to master the art of producing frugal goods for the masses.”

My correspondents in Brazil from the Harvard Career Network tend to be among the top few percent that are benefitting hugely from the recent boom, but such a filtered source of information via SKYPE and email can produce a skewed view: not all Brazilians are participating in the boom. Many of India’s strengths (frugal innovation, a culture which produced half of Silicon Valley’s start ups) may be Brazil’s weaknesses. Another scenario which could cause a BRIC-wide pullback in the Emerging Markets Index would be an economic bust in China, which in turn affected Brazil — two of the four BRIC nations. In its Cover Leader on Brazil a year ago, The Economist warned that the biggest risk for Brazil is hubris.

Published by Janar Wasito

Janar Wasito is the manager of Magis Capital in San Diego, CA. He is a graduate of Harvard and Stanford Law School, and a former Marine Officer.

3 thoughts on “Brazil needs to be more innovative

  1. In my opinion: lack of government policy + lack of education + lack of international competition for a long period = low innovation and R&D
    Not to forget that there are niches of excellence, namely: oil exploitation in the sea; some medical areas (plastic surgery, heart surgery).


    1. From my observations, over the last maybe 3 years almost, Brazil has reduced its “inferiority complex” with respect to the United States, and views it as more of an equal, which is a good thing for both parties. Brazil seems to be aware of its issues, including managing inflation for long-term growth. The emphasis seems to be on moving its citizens up the income scale, whether that is from very poor to lower middle class, or lower middle class to middle class (D to C, C do B?). This implies innovation at different economic levels: innovation for a very poor person looking to move to lower middle class will look very different from the Eike Batista level of innovation. I particularly like The Economist’s coverage because their correspondents seem to get out into the Favelas and comment on the lowest level of innovation.


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