How to unleash the potential of regions like São Paulo

Economic growth
Macroeconomics - Economic growth - Monetary Policy

Image: REUTERS/Paulo Whitaker

This article was previously published in the World Economic Forum Blog, on February 13, 2020.

  • São Paulo's economic success has been built on a broad spectrum of policy-making.
  • Investments in infrastructure and technology have reaped enormous benefits.
  • High standards in public services and environmental protections have also been crucial.

São Paulo is Latin America's power-house. A centre of commerce, dynamism and innovation, Brazil's largest state has a GDP bigger than Argentina. Last year its GDP grew 2.6%, twice the national average. This was not by accident. It was a result of serious policies to modernize infrastructure, promote technological innovation, expand equal opportunity and double down on preserving the environment.

The best way to unleash the potential of diverse economies like São Paulo is by enabling entrepreneurs to thrive. Less state interference and more private enterprise is a credo I have always followed. While social protection is critical, we need to trim the administrative machine, attract companies and private investment and direct resources where we need them, especially on public safety, health and education.

The country needs a bold new agenda, one that we have already tested and are implementing in São Paulo. Although the country has started moving in the right direction, we could use more course correction. In 2020, economists predict that the Brazilian economy will grow over 2%, the highest rate since 2013. Fiscal responsibility coupled with liberal reforms are essential, as is the betterment of the business environment.

Yet even more than growth, Brazil needs purpose. The world is undergoing a process of complex social and economic transformation. Political tensions and trade wars are emerging between countries and regions. Brazil needs to adapt to thrive. We believe in a change strategy based on four key pillars:

1) Accelerate the modernization of infrastructure

In São Paulo, our large privatization and concessions programme is open to all investors in the world. With 21 major projects totalling $10 billion in planned investments, we will improve and modernize infrastructure such as highways, railways, waterways, ports, airports, subways and urban trains. After years of recession, Brazil doesn’t have time to waste. The goal is evident: reduce the cost of doing business and improve people’s quality of life.

2) Invest in technological innovation and digital inclusion

The world has already entered a new technological era: the Fourth Industrial Revolution, artificial intelligence (AI) and the Internet of Things (IoT) are now a reality. Brazil cannot afford to be left behind. As a public manager, I see these changes as a double commitment: to enhance the inclusion of our state and country in this dynamic world and prepare people for change.

In São Paulo, we are redesigning the digital ecosystem. At IPT Open Experience, we encourage cooperation between private companies, government and universities to foster applied research and innovation in more science and technology-intensive sectors. In 90 days, we will open the Center for the Fourth Industrial Revolution (in partnership with the World Economic Forum) that will unite São Paulo with the most advanced global experiences in the design of public policies with a high potential for impact on society, such as AI, IoT and data usage policies.

We have a neighbourhood in São Paulo that is being entirely geared towards the digital economy: the International Center for Technology and Innovation (CITI) - an expression of a new urbanism, integrating digital services in an area of more than 1 million square metres.

We believe in the power of technology to overcome complex public and social challenges. We hope to open the largest Government Innovation Hub in Latin America in 2020, following in the footsteps of successful international models.

3) Promote equal opportunities and quality services

To prepare people for change, we have expanded vacancies in vocational education by 25%, focusing on technology and digital economy courses. We have allocated $1 billion to reforming and maintaining state public schools.

We promote digital government to provide better and more services, such as scheduling medical appointments and high-cost drug withdrawal schedules, long-distance learning and mobile ticketing for metropolitan transportation.

Furthermore, we developed specific programmes for the most vulnerable people. In the region with the lowest human development index in São Paulo, Vale do Ribeira, we expect to invest almost half a billion dollars to improve jobs and income, quality of life, sustainable management and infrastructure.

4) Preserve and protect the environment

Our agribusiness has adopted the best international practices. Our highly automated crop production system has abandoned the old practice of slash-and-burn. Restoration of the riparian zone has increased the state’s vegetation coverage, adding up to 23% of its territory. In 2019, we initiated an investment of $360 million, to be disbursed by 2022, for rehabilitating 25km of the Pinheiros River. Upholding the goals of the Paris Agreement, we encourage alternative energy and last year opened the largest solar plant in Brazil.

For 50 years, The World Economic Forum’s Annual Meeting in Davos has been critical in advancing the globalization process and acknowledging that the quality of leadership makes a difference. We are in a time of change. It is time for new leaders to build the future by considering the complex social, economic and environmental transformations underway. This is the path São Paulo has chosen to take and that’s the agenda we stand for. We are ready to give Brazil its purpose.

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