Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Brazil Diary Day 2: The World Is Flatly The Same...Is Sao Paulo A City From The Future?

Posted by Tom Foremski - June 10, 2010

"So how do you like Brazil," I was asked by one of the hard working organizers of the Brasscom IT Forum conference.

"I hope to see some of it before I go back to San Francisco," I replied.

The world is flat, flatly the same when viewed as a business traveller. All hotel rooms, airports, restaurants, and conference centers look the same. And the people look the same too, same dress, same culture...same.

I went for a walk but there wasn't much in the area around the Sheraton World Trade Center in Sao Paulo, where I was staying, just highways, and light industry, it could have been Newark, New Jersey, it looked like Newark. Surely Brazil should feel differently.

Next to the hotel I found a large design center with dozens of showrooms focused on high-end designer goods: furniture, electronics, interior decor, bathrooms, and more. Beautiful designs, very chic, and ultra-modern. I could have been in Milan, Italy rather than Brazil, where the average income is about $5,000.

. . . Brazil's fast growing consumer class

Sao Paulo is a massive city with about 23 million population, the third largest in the world. And it has a massive economic divide between its residents. It doesn't have the 750 favelas (shanty towns) that Rio de Janeiro has, but it has the same contrast between wealth and poverty, side by side.

But change is happening. Just half-a-block from a Lamborghini dealership with its hugely expensive, shiny cars, I saw a KIA dealership - the middle class is growing quickly thanks to Brazil's excellent economic growth. And that's drawing a lot of firms to Brazil's increasingly propserous consumers.

I spoke with Julia Santos, Head of Worldwide Strategic Outsourcing at Johnson & Johnson. She said that J&J has been in Brazil since 1933, which helps now that the markets for J&J products are growing because the company understands the culture.

"What sells here wouldn't sell in say, India or China," she says. "There's different scents, and other preferences. We also use Brazilian names for our brands."

She also works with Brazilian companies producing products for J&J and she says the cultural aspects of working with Brazilians are very good. "There is a can-do attitude here. The people work well together and they will do whatever needs to be done to get the job done."

. . . A city from the future?

Maybe Sao Paulo is a city from the future, because the way the economic divide is widening in the US, it won't be long before we get our own favelas and underclass.

In the same way that developing countries can vault ahead of the developed world with its legacy infrastructures, maybe Sao Paulo is ahead of us as a city blueprint -- we have yet to build our favelas and disenfranchise our lower economic classes but we're working on it.

The economic divide provides Sao Paulo's businesses with a lot of economic advantages: the city has a young, very well educated class that is as dynamic and ambitious as any in the world; and it also has a large and cheap workforce it can tap from its underclass.

Living costs are low, that means this workforce can compete with the best. And health and safety issues aren't much of an issue -- a further competitive advantage.


. . . Steak again

In the evening we visit one of the most famous restaurants in Sao Paulo, Figueira Rubayat. It is built around a huge fig tree that looks more like a banyan tree with multiple trunks.

The steaks here are world famous and I can taste why. Perfectly grilled, slight char with a very rare, melt-in-your-mouth center.

At dinner some of the attendees of the Gartner portion of the conference are keen to tell me how they very strongly disagree with the presentation of the Gartner analysts on outsourcing. And these are CIOs at large companies.


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