How the Pre-Salt Layer Can Help Brazil Enter a New Era of Economic Growth

It has taken decades for Brazil to build a dynamic and integrated industrial sector that has helped it to grow and become one of the largest economies in the world. More recently, however, its manufacturing sector has shown signs of losing momentum. In fact, basic indicators, such as output, exports and employment, show that industry is growing more slowly than other sectors and is falling behind. At a time when the manufacturing sector is losing ground and the economy is concentrating on the production and exports of basic commodities, the world is experiencing a profound transition toward a new geography of production and innovation that is already redesigning the global economy. How does Brazil feature in the new economic geography? Does Brazil have opportunities for investments in innovation and increase productivity and competitiveness, so that it can compete globally and participate in global high value added chains? The aim of this paper is to shed some light on these issues. In particular, it explores the case of the pre-salt layer project, the one that has all the characteristics and potential to become the most promising frontier for technological and industrial development and become a gateway to the new geography of production and innovation.

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