Brazil Trip Report: Optimism Fuels a Rising Partnership

The delegation at work: Rick Sullivan (Secretary of Energy & Environment ), Pamela Randhawa (President, AgroGreen Biofuels) & Steve Papa (CEO, Endeca) (L to R).

Massachusetts Governor Deval Patrick arriving in Sao Paulo, Brazil with the delegation 

I recently had a chance to sit down with Andy Tarsy, President and Executive Director of PBLN, to discuss his recent trip to Brazil with Massachusetts Governor Deval Patrick as part of a December 2011 trade mission. As a local entrepreneur, Brazil’s recent economic growth and its close ties to Massachusetts are topics of great interest to me. The pre-trip blog post by PBLN had some good data points and the generally supportive media coverage was a good start but I began hounding Andy for a more detailed trip report upon his return.

The first big question: what did the trip accomplish? Andy described the mission’s main objective by quoting Governor Patrick. “As the Governor told the delegates in preparation for the visit, ‘In Massachusetts, our door faces the street.’ What I think he means by that is that our economy is directly integrated into the global economy and we have to actively maintain those connecting points to protect our own strategy for sustainable growth.”

Andy described success on several levels. In the most tangible sense, there were deals made and agreements reached. In what areas? Agriculture, oceanography and higher education for starters. There were strong leads on new investors, partners, customers and distributors for some Massachusetts companies, and reciprocal dividends for their Brazilian counterparts. Perhaps more important for the long term, there was a deepening of the awareness in Brazil of opportunities to partner with US and specifically Massachusetts entities in business, government and higher education. Andy said, “to the extent we measure success by fruitful relationships that will get meaningful follow-up in the next 3 to 6 months, the trip was an unqualified success. The world is in Brazil and Brazil is looking to the world for the expertise and partnerships that will sustain its growth. Our timing was perfect.”

Two Massachusetts CEOs present at a Sao Paulo forum on entrepreneurship. Marcia Fournier (CEO, BIOARRAY Therapeutics) and Priyanka Bakaya (CEO, PK Clean) (L to R).

Rio de Janeiro seen from the Tavares Bastos Favela, one of several low-income areas where increased safety and opportunity for the chronically poor is apparent. Its young residents are the workforce and the engineers of Brazil's future.

Palpable optimism – that was what Andy reported encountering more than anything else in Brazil. It is a country experiencing well-documented high growth at a time when many others are going through unprecedented economic challenges. Andy relayed a strong impression that entrepreneurs, government leaders, and big business types in Brazil universally seemed to believe anything is possible. In the US we complain about the strong partisan dynamic that dominates Washington where everything is see as either Republican or Democrat. We also see too often a dynamic in American business of seeing a sharp dichotomy of only cost centers and profit opportunities. If Brazil is any model, it may be because of the country’s readiness to leverage collaboration between the public and private sectors for shared goals.

Just a few of the technology start-ups participating in an incubator at a major Rio university

Brazil was Governor Patrick’s fourth trade mission and the third where PBLN has been asked to participate.  PBLN members represented five of the participants on the trip.  The Governor opened three slots directly to PBLN which was represented by Andy along with Florian Hunziker (COO of Harmonix Music Systems) and Linda Moulton (CEO of Ceralta Technologies). Other PBLN members on the trip included Kirk Sykes (President of the USA Fund) and Winston Henderson (VP and General Counsel of NanoTerra).

PBLN members Winston Henderson (left) and Linda Moulton (right) with fellow delegate Helene Solomon

 

 

The timing for the Brazil mission could not have been better.  Brazil has become an economic powerhouse.  It has almost full employment, very little debt, a balanced budget and is projected by PriceWaterhouse Coopers to surpass both the U.K. and France in GDP by 2013, putting it in the top five economies in the world.  Brazil is considered a model for the modern energy economy.  Through innovations in deep water drilling, it became oil independent in 2006, it gets 90% of its electricity from hydroelectric plants and is a pioneer in ethanol, so much so that ethanol powered vehicles don’t advertise that fact anywhere on the cars; it’s simply a given.

Other key learnings: Healthcare? It is a fundamental constitutional right in Brazil although there is ongoing debate and litigation around whether that right has any clear limits. The economy? Brazil’s central bank has been critical to its growth managing a steady but low rate of inflation and that along with a progressive income tax structure has helped lower the income gap and grow the middle class.

There are enormous challenges, too, but challenges mean opportunity and with collaboration from its global trade partners, the opportunities are large for Brazil. Here are some more takeaways:

  • Brazil has a growing middle class but one where workforce skills and even basic education is far behind some countries with similar economic power. Much of the country still has a 4-hour school day if kids are present at all, and learning in many of the school systems is limited.

    Mass Challenge co-founder and CEO John Harthorne with PBLN's Andy Tarsy

  • Brazil’s government is committed to funding 100,000 university students to study abroad over the next few years.  This presents a huge opportunity for US universities.
  • Brazil has produced a huge amount of research with 2.7% of the world’s scientific publications originating in Brazil but it lags significantly in technology transfer. Brazil has less than 0.1% of the world’s patents.

    Governor Patrick with American Well CEO Ido Schoenberg at the residence of the US Ambassador to Brazil in Brasilia

  • Brazilian innovations in energy could have dramatic improvement in the US through collaboration.  Our entrepreneurs and universities are innovating at a rapid rate in the energy sector but the U.S. has been slow to deploy these innovations at scale.  The Brazilian market is ripe for our energy technologies and some of their proven technologies could bring immediate impact to our energy challenges.
  • The large middle class in Brazil represents a huge buying power. There were companies represented on the trade mission making serious moves toward reaching new customers in Brazil.
  • Massachusetts has the largest population of Brazilians in the U.S. and so there are natural ties and opportunities to create new relationships to bring Massachusetts products and services to Brazil.

    Massachusetts Secretary of Education Paul Reville, Secretary of Labor and Workforce Development Joanne Goldstein and Bridgewater State University President Dana Mohler-Faria visit a Rio de Janeiro primary school

Andy and PBLN are doing great work to foster collaboration between the public and private sector here in Massachusetts, to create meaningful conversation around healthcare, energy and job creation and most importantly to turn that conversation and collaboration into action.  This trip revealed that in Brazil, similar conversations and action planning are well underway. If we can harness the same kind of optimism and commit to growing via collaboration and partnership, anything is possible.

  • AndyTarsy

    Thanks Jon for your encouragement and for taking the time to put that piece together. I sent a few questions out to some of our friends who were on the delegation and here is what I got back so far:

    Kirk Sykes, CEO USA Fund (looking at a range of potential projects in Brazil):

    "Brazil is doing a great job advancing as a world power through harnessing its natural resources without military might or cost."

    "We were promoting our most unique and valuable resource, innovation, and the world wants it badly."

    Helene Solomon, CEO Solomon McCown (helping healthcare and technology clients think about strategy for their own growth):

    "35 million people moving out of poverty – there’s a lot of opportunity there and a lot to do!"

    "Brazil is wide open for business and collaboration. Friendly, innovative and eager. Businesses of any size should be looking south – not just east!"

    Aaron Ain, CEO and President, Kronos Software (which now has a growing presence in Brazil for its workforce management solutions software):

    Impressed with "how much Brazil has advanced since my last trip there ten years ago, specifically Sao Paolo. More modern, sophisticated, energetic, and on the move."

    You "need to be on the ground to make progress. Can’t make connections and advance your interests from far away."

  • AndyTarsy

    Thanks Jon for your encouragement and for taking the time to put that piece together. I sent a few questions out to some of our friends who were on the delegation and here is what I got back so far:

    Kirk Sykes, CEO USA Fund (looking at a range of potential projects in Brazil):

    "Brazil is doing a great job advancing as a world power through harnessing its natural resources without military might or cost."

    "We were promoting our most unique and valuable resource, innovation, and the world wants it badly."

    Helene Solomon, CEO Solomon McCown (helping healthcare and technology clients think about strategy for their own growth):

    "35 million people moving out of poverty – there’s a lot of opportunity there and a lot to do!"

    "Brazil is wide open for business and collaboration. Friendly, innovative and eager. Businesses of any size should be looking south – not just east!"

    Aaron Ain, CEO and President, Kronos Software (which now has a growing presence in Brazil for its workforce management solutions software):

    Impressed with "how much Brazil has advanced since my last trip there ten years ago, specifically Sao Paolo. More modern, sophisticated, energetic, and on the move."

    You "need to be on the ground to make progress. Can’t make connections and advance your interests from far away."

  • Linda A. Moulton

    The level of engagement between the MA delegation and the representatives of Brazilian government and industry was very impressive. There is recognition by all parties involved that the potential for future benefit on both sides is substantial. It is important to acknowledge that the visit by the MA delegation was just the first step in a future process, not an end in itself. On many levels, the engagement will now continue, and benefit to the Commonwealth and to Brazil will become evident over time. I was honored to be a part of it.

  • Linda A. Moulton

    The level of engagement between the MA delegation and the representatives of Brazilian government and industry was very impressive. There is recognition by all parties involved that the potential for future benefit on both sides is substantial. It is important to acknowledge that the visit by the MA delegation was just the first step in a future process, not an end in itself. On many levels, the engagement will now continue, and benefit to the Commonwealth and to Brazil will become evident over time. I was honored to be a part of it.

  • http://pbln.org Andy Tarsy

    Here is a link to an excellent trip report from our colleague Kristen Rupert, Executive Director of the International Business Council of the Associated Industries of Massachusetts:

    http://www.aimnet.org/AM/Template.cfm?Template=/C

  • http://pbln.org Andy Tarsy

    Here is a link to an excellent trip report from our colleague Kristen Rupert, Executive Director of the International Business Council of the Associated Industries of Massachusetts:

    http://www.aimnet.org/AM/Template.cfm?Template=/C