From Vale da Rapadura to Silicon Island, cities compete for the title of Brazilian technology hub

Travelers from the early 1940s driving along the roads adjacent to the city of Santa Clara, California, reveled in the region’s bucolic landscape. A view full of apricot orchards and fruit trees was what those who ventured on the west coast of the country found, opposite the one that housed the financial center of the world power.

“It was an agricultural region that had specialized in fruit production and processing,” says American historian Margaret O’Mara. “It was very, very rural.”

Santa Clara is the heart of iconic Silicon Valley, as the southern San Francisco Bay region became known after tech journalist Don Hoefler named it in a series of articles published in the Electronic News in 1971.

The former rural town is now home to Intel, the world’s most famous microchip maker, neighboring Cupertino, where Apple’s headquarters are located, and nearly 30 km from Menlo Park, home to the giant Meta, owner of Facebook. , WhatsApp and Instagram.

Decades after California’s transformation, regions of Brazil are trying to repeat the feat. In at least 21 cities, there are communities of entrepreneurs or public managers who claim to be Brazilian silicon valleys. The list includes unlikely locations and curious proposals, such as Sandwich Valley, in Bauru, in the interior of São Paulo, and Vale da Rapadura, in Fortaleza.

Vale da Eletrônica, in the municipality of Santa Rita do Sapucaí, Minas Gerais, was one of the pioneers in the comparison, in 1985.

The city’s fame dates back to the late 1950s, when it started to have a Technical School of Electronics — a great novelty at the time. In 1965, even before the region began to concentrate microelectronic industries, the municipality inaugurated Inatel (National Institute of Telecommunications).

The most recent onslaught took place in Rio de Janeiro. The idea of ​​Eduardo Paes (PSD) is to rehabilitate the city’s port area, a project that had been put on hold after the euphoria of the 2016 Olympics.

The plan for the so-called Porto Maravalley, a 2,800-meter branch capable of housing 144 startups who will receive mentorships there, was announced in 2019, and since the middle of last year has been touted by the Secretary of Economic Development and Innovation, Francisco Bulhões . The space will have a coworking and will host events.

The old promise of a Silicon Valley in the Amazon Rainforest was also revived by statements by the Minister of Economy, Paulo Guedes. During his participation in COP26 (26th World Climate Conference), last year, the minister defended tax exemption for big techs, such as Google, Amazon and Tesla, and said it was necessary to transform the vocation of the region, so that it becomes the ” world capital of the green and digital economy”.

The proposal revisits the idea of ​​the Manaus Free Trade Zone, an industrial park in the Amazon that gives tax advantages to companies located there —​​and threatened by Guedes since 2018. The bulk of production is items such as computers and tablets, although the factories are essentially assemblers. , and not technology producers.

In 2021, the state concentrated only 0.11% of venture capital contributions, responsible for financing innovation.

In addition to promises and projects, Brazil already has some cities that deliver a robust technological innovation ecosystem. Some examples are Florianópolis, with an innovation network distributed throughout the city; Porto Alegre, with a university technology park; Recife, with a space for innovation in the old port area of ​​the city; and São José dos Campos, with some of the main technology institutes in the country.

The race for the title of “silicon valley” has caused a flurry of legislation in the sector to be passed in city councils across Brazil. The report found that at least 11 laws related to the sector were passed in ten large cities in the last five years.

There are also managers who plan new legislation, such as the Federal District, which according to its Innovation Department is working to “pass legislation that reduces the tax paid by startups”.

“We’re not kidding when we say that we want to turn the Federal District into the next Silicon Valley,” says the folder by email.

In the award-winning book The Code (Alta Books, 2021), American historian and University of Washington professor Margaret O’Mara unravels the pivotal role the US Department of Defense played in the rise of Silicon Valley.

“The main factor was US investment in military technology during the Cold War,” says O’Mara.

“It was the beginning of the electronics industry in Silicon Valley, because there were military installations in the area, and Stanford University was very focused on building its science and engineering programs to get some of the money that came in from Washington.”

Microelectronics, a type of technology developed there, perfectly suited the military: it allowed computers to become smaller and more powerful, the basis of the digital revolution that the world would witness decades later.

The conditions created there opened the door to a very specific business culture. Being far from the country’s major financial center on the east coast, the entire region has become highly specialized in this type of business. Most establishments focused on the sector, from law firms to venture capital funds – which, supported by investment and the interest of the State, had more confidence in the investment.

“I hate the phrase: ‘When the government doesn’t get in the way, it helps a lot’. This is completely wrong”, says Curitiba’s Secretary of Innovation, Cris Alessi. The city, which stood out in the early 2000s for initiatives in the field of technology, has been trying to regain its space.

“Only the government has the power to legislate. If we didn’t have a tax incentive program, Curitiba wouldn’t have half of the important startups it has today, because these startups would be in other places”, defends the secretary.

In 2017, during the first term of the current management, Vale do Pinhão was created, a project that wants to put Curitiba back on the innovation map. In 2018, they revised a 2006 tax incentive law, which only covered a part of the city, to cover the entire territory.

The path is opposite to that taken by Porto Digital, a technology park that 22 years ago restored the old port area of ​​Recife through tax reductions.

The idea of ​​such a park was quite innovative for the time. “Technological parks, which are gears for transferring knowledge through entrepreneurship, were born closely linked to the university”, says Francisco Saboya, one of the academics who requested the park in Recife.

“[Ficavam] in a place relatively far from urban centers, that most idyllic place, where the birds sing, where there is a pond, because the geniuses are at work.”

In the 1990s, Saboya and other leaders wanted to stop the brain drain that was occurring in the state with the country’s crisis, recovering the technological pioneering that Pernambuco had experienced in the 1950s and 1960s.

“In the 1990s there was a paradox of those that either you face to solve or you lose the wave”, he says. “At the same time that the traditional Pernambuco economy really declined, the foundations of a new economic asset called knowledge were born. Qualified human capital, especially in the area of ​​information technology.”

Highlighted for its size, São Paulo does not have technology parks as recognized as other cities in the country — cities in the interior of the state, such as São José dos Campos and Piracicaba, remembered as the Agtech Valley, take the laurels.

More timid attempts to unite entrepreneurs in a single place, such as Praça do Silício, in República, and Potato Valley, in Largo da Batata, appear in the metropolis from time to time.

Luciano da Silveira Araújo, director of Conecta.Hub.SP —an agency in the capital that aims to integrate innovation initiatives—, says he would classify the São Paulo ecosystem as a cluster, a concentration of companies that have similar characteristics. “São Paulo needs to have this structure more decentralized as an organism, an urban fabric”, he says.

“São Paulo has an incredible capacity to create intellectual property. For the development of a company, São Paulo has absolutely everything to do this human part in an exponential way”, says Araújo, referring to the diversity of the population and the amount of professionals in the city. “What makes an innovative environment is multidisciplinarity.”

Despite the publicity power that a Brazilian “valley” can have, most respondents reject the idea of ​​copying the Silicon Valley model, which gave birth to the richest companies in history — but currently in crisis.

Mark Zuckerberg, owner of Meta, has testified in Congress four times in four years, under criticism of harming the health of young people to democracy with his business model. Google and Twitter, also fruits of the region, have already been in the same position. There are still the threats of regulation, especially in the European Union, and the phenomenon of Chinese big tech.

The valley itself is no longer the same, says historian Margaret O’Mara.

“You have to be very rich to buy a house there and live comfortably. There is huge economic inequality, many people homeless or living in trailers parked on the street,” he says. “The region doesn’t work the way it used to, it’s harder for small companies to gain scale.”

“Building a technology hub should be about building a dynamic region that offers opportunities for a large number of people. That’s where Silicon Valley failed. It has its economic benefits, but they haven’t been shared widely enough,” says the historian. .