São Paulo Shows Greatest Innovative Potential in Brazil, Says Survey

By Richard Mann, Contributing Reporter

SÃO PAULO, BRAZIL – The startup and innovation environment of the city of São Paulo is one of the greatest in Brazil, in addition to being the municipality with the most significant number of emerging companies in the country. According to the Brazilian Startups Association (Abstartups), there are approximately 2,600.

The capital city of São Paulo also stands out as one of the 30 ecosystems with the highest growth potential in the global mapping of the international organization Startup Genome, the Global Startup Ecosystem Report (GSER) 2019, published in May this year.

This study shows that the metropolis provides a fertile ground for the development of new businesses in the financial and scientific fields (biotechnology and health), as well as ranking among the ten best in the area of affordable talent procurement.

According to GSER 2019, revenue generated by startups in São Paulo reaches US$5.1 (R$20) billion.

In addition, the report also outlines two grounds for creating or developing a business focused on technology in the city: a number of universities with a scientific and technological nature, including the University of São Paulo (USP) as a prominent source for the survey; and exemptions on revenue and on import and export taxes.

To Arnobio Morelix, research director of Startup Genome, the São Paulo capital, when compared to other Brazilian cities with robust innovation ecosystems, such as Rio de Janeiro, (RJ), Belo Horizonte (MG), Florianópolis (SC), Curitiba (PR) and Recife (PE), shows a differentiator that offers a more significant potential for development. “São Paulo is one of Brazil’s most interconnected poles with the world,” he says. “In the international startups market, one is competing and cooperating with the entire world, not only with national companies.”

For the research director, there is a lack of focus on the global requirements to develop networks of international contacts by companies emerging from other Brazilian cities.

“Companies that consider building global products and services grow 2.1 times more than those focusing exclusively on domestic markets.”

Contrary to what one might think, the development of startups ecosystem in São Paulo does not depend on the size of its economy or number of inhabitants.

“San Francisco, where Silicon Valley is located, is not the largest city in the U.S. in population, but it is the birthplace of the largest technology companies.”

For Morelix, the innovation ecosystem gains momentum through various incentives: the creation of training programs in technology; establishment of coworking; and organizations focused on sharing knowledge.

For the full picture, see our Brazil Tax Reform: Complete Guide.