São Paulo – Productivity is the magic word when speaking about the future of industry, according to analysts. To become more competitive, Brazil needs to seek greater productivity, or greater quality, with lower costs, while generating more jobs.
In this area, the government has enormous responsibility, as the lower tax burden, lower interest rates, education for qualified labour and much of the investment in infrastructure depends on the government. But private companies also need to play their part and they are doing little.
"We need productivity, not just in industry, but in the economy as a whole. We need to produce more, earn more, be more dynamic,” said Julio Gomes de Almeida, from Iedi. "It is the state’s job to improve infrastructure, qualify labour, etc., but the private sector must invest more, in technology, new machinery, efficiency,” he added.
In this respect innovation is seen as essential, but in Brazil investment in research and development is low, at around 0.6% of Gross Domestic Product (GDP). There are funds for the area in agencies like the Brazilian Development Bank (BNDES) and the Studies and Projects Funding Body (Finep), a state-owned organisation belonging to the Ministry of Science and Technology, but they are underused.
Flávio Castelo Branco, from CNI, pointed out that investment varies much from sector to sector and from company to company, but that, in general, large companies are “more daring” in this matter, while small and medium organisations turn fewer funds to innovation, also due to lack of information regarding the offer of lines of credit.
This is also the opinion of Clayton Campanhola, from ABDI. "No country has got there without investment in science and technology,” he said. "But having funds does not mean that the problem is solved,” he added.
According to him, among small and medium companies there is even "lack of knowledge of processes” to get credit from the BNDES and Finep. In an attempt to teach companies, the agency is going to produce an electronic guide on the existing credit instruments. "This is a great bottleneck, the lack of information,” he said. To Evaldo Alves, from FGV, it is also necessary to “use universities more”.
Management
But it is not only in production that there must be growth. Alves, from FGV, said that this includes the adoption of new forms of company management and qualification of the entire productive chain. "Sometimes the company may be losing space due to matters not connected to the product. For example: a client being treated badly at a car dealership. A salesman may damage the entire effort of the chain,” he pointed out.
In this line, Castelo Branco pointed out that companies that offer some differential against competition, be it in design or even in marketing, have an advantage. "Alpargatas, for example, has capacity for innovation and differentiation,” he said, referring to the producer of Havaianas sandals. "People accept to pay more for them than they would pay for a similar product [made by another brand],” he added.
To him, more successful companies have been working on this “mixture of design focussed on the client and marketing strategy.” “This is a less sectorial phenomenon, but one more related to each company’s strategy,” he said. That is, no matter what the economic scenery, the business model makes the difference.
Apart from innovation and management, another competitive differential is the area of operation itself. The choice of an activity in which the country itself has a competitive advantage, be that due to the availability of raw material, market characteristics or other factors, is a good start.
Among these sectors, according to analysts, are the pharmaceutical, food and beverage, durable consumer goods – including areas which are currently down, like the textile and garment sectors, and furniture -, “intelligent” fabric, banking automation, biotechnology, biofuel, oil and gas, energy and mining products, alcohol and chemicals, and nanotechnology, like, for example, that already used in the cosmetics sector. “You have to bet on where the country may be a leader,” said Campanhola.
Read more about prominent areas in "The highlight is the domestic market".
*Translated by Mark Ament
