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.”
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.
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).
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.
- 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.
- 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.
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.