What makes a state, developed?
Large oil reserves, large ore reserves,
large areas for agriculture or livestock?
I think not.
If that were so, then Santa Catarina would not be one of the states
the country.
And I have a theory.
And to tell you,
I’ll tell you a bit about the history of a city called Palhoça.
For those who do not know, imagine a city with a little more than 170 thousand inhabitants.
A city that, over the last ten years, has experienced
far above the average of most Brazilian cities
driven mainly by civil construction.
But this growth did not
in better living conditions for people,
that is, the city grew, but it did not develop.
Even today, the municipality, despite this growth in recent years,
presents very antagonistic data.
For example,
the municipality occupies the tenth place in the ranking
of the state’s largest economies,
but ranks 79th in the HDI ranking.
If, on the one hand, the municipality is the one that has grown the most
in the region of the great Florianópolis,
on the other, it has the lowest average income of all municipalities in the region.
The largest favela in the state is in Palhoça.
There live about 6 thousand people.
Sixty percent of these people live on less than one minimum wage
and 50 families have no income.
This was the scenario I found when I arrived in the city to take over
the Secretariat of Sustainable Economic Development of the municipality.
I came to the conclusion, then, that to ensure that the city
continued to grow and this growth became
in better living conditions for people,
it was fundamental to change the economic axis of the municipality:
to move it from a labor-intensive economy
for an economy intensive in knowledge and innovation.
For three reasons: First, because in today’s world,
what truly generates wealth is knowledge and innovation.
A survey by Global Entrepreneurship Monitor, for example,
reveals that entrepreneurs intensive in innovation and knowledge
generate much more wealth
than enterprises of the so-called old economy.
Knowledge-intensive ventures
are the focus of so-called opportunity entrepreneurs.
Entrepreneurs are those people who according to Joseph Schumpeter
drive capitalism, generating new products, new processes,
creating new markets and more efficient and economical methods.
Entrepreneurs by Opportunity
are those people who decide to undertake,
although they already have a way to support the family.
They identify an opportunity in the market and plan a lot.
Therefore, the chance of an enterprise of these successes is always greater.
Entrepreneur by necessity, in turn,
is that person who has no more how to support the family.
Usually unemployed,
ends up getting their last reservations to put on a deal.
Fifty percent of these entrepreneurs by necessity
will close the doors before they are three years old.
The same GEM research indicates that while in Brazil
55% of entrepreneurs are motivated by opportunity,
in the United States that number is 80%.
To get an idea of the capacity to generate wealth
of an economy intensive in knowledge and innovation,
suffice it to say that 95% of the current wealth of the United States
was generated in the last 40 years
by a legion of entrepreneurs by opportunity.
From where icons of modern capitalism emerged,
such as Apple, Google, Facebook, Microsoft.
By the way, just so you know,
the market value of Apple and Microsoft together is virtually the GDP of Brazil.
The second reason to bet on this change in the economic axis
is related to the cost of financing production in Brazil.
Labor-intensive economies require large amounts of money
financing of its production.
As the Brazilian saves very little,
the cost of financing in Brazil is very expensive.
This means that even a raw material
in the production line of a Brazilian company
and we are already less competitive than any other country in the world.
The third reason to bet on this change in the economic axis
is related to a characteristic of the people of Santa Catarina.
To tell this characteristic to you,
to illustrate this characteristic for you,
I’m going to tell the story of a great company called Catar Consul.
Who of you here has a Consul home appliance?
By chance do you know why the name of Consul is Consul?
Well then I’ll tell you.
This story begins in the 1950s.
with an entrepreneur named Wittich Freitag
and his two partners, Rudolfo and Guilherme.
At that time, refrigerator was a luxury item.
Only very rich people had one.
Rudolfo and Guilherme had a workshop that repaired everything.
One day, a kerosene refrigerator came in for them to fix.
Together with Wittich Freitag, they decided to disassemble the entire refrigerator
and came to the conclusion that they could manufacture one themselves.
But they did not have the money for it.
They decided to borrow money from a wealthy businessman in the area,
called consul Carlos Renaux,
who was a great businessman in the textile industry of Brusque.
Consul Carlos Renaux lent the money they needed.
In honor, they put the name of the company of Consul.
But that’s not the prettiest part of the story.
In the 70’s, one of the main parts suppliers for Consul
was experiencing a severe economic crisis in Germany
and had to suspend the supply of a part to a series of customers
and Consul was one of those companies chosen.
Wittich Freitag did not have Facebook, did not have WhatsApp,
so he could not stand behind a computer,
posting on social networks or on a site such as the Claim Here.
He decided to take a plane and go to Germany.
Getting there,
the company receptionist reported
which, as he had no timetable, would not be attended to.
The receptionist certainly did not know a legitimate descendant of Germans
who faced so much trouble to start a life away from home.
As I am a descendant of Germans, my last name is Fett, which means lard,
any similarity to my physical type
it is mere coincidence,
I can hear Wittich say to her:
“I’m not leaving here until I get it.
I did not come from Brazil here at all. “
Then Wittich saw a group of
walking through the lobby of the company
and deduced that one of those people was the owner of the company.
He went to that group and asked which one was the owner of the company.
One introduced himself, and then Wittich asked him.
because he had determined the suspension of the supply of the piece.
The German businessman replied that because of the economic crisis,
he had to choose some clients to stop providing
and Consul had unfortunately been one of those companies.
The story goes that Wittich Freitag turned to the German and replied:
“Well, you know that during the war there in Santa Catarina,
thousands of our families took what we had to eat
and to get dressed to send the pros hit by the war
here in Germany and now you condemn these same people
suspending the supply of this part, which means the end of the company
and thousands of jobs.
The German, then, turns to one of his advisors
and states: “I wish I would never be suspended again
the supply of the piece for Consul “.
This story well portrays what I want to tell you
about this characteristic of the people of Santa Catarina.
We are entrepreneurs, innovators and restless by nature.
We did not wait for the solution to fall from the sky.
If so, maybe we were still waiting for the help to come
after the flood of 83 in Blumenau.
Instead, what did these people do?
He invested in creating a party to help rebuild the city.
which proved to be the second biggest party
of the world’s German culture.
That’s the characteristic I want to tell you.
We are an entrepreneurial people by nature.
And this is a characteristic that gave me courage
in betting on the change of the economic axis of Palhoça.
Let’s go back to Palhoça.
How to make this change of economic axis in the municipality?
The public power,
When it does not get in the way, it’s been a long time.
But such a change can be accelerated.
when the public power does more than not disturb.
When he decides to be the protagonist of this process.
And how can he do that?
Creating a favorable business environment for innovative entrepreneurs.
Innovative companies are exponential.
They go from zero to a billion at a much faster rate than companies
of traditional sectors and pay much higher wages.
And that was exactly what I wanted for Palhoça.
One of the most rewarding things about working in the public service
is that you can effectively influence people’s lives.
Maybe nowhere else is possible
influence both the lives of people and the public service.
The first challenge was to convince the mayor.
Make it see that only by generating more wealth will it be possible
have money for investments in areas such as health, education,
safety and sanitation.
I introduced him to the diagnosis.
We had a city that grew but did not develop;
a people that brings entrepreneurship in its essence
the need to stimulate Schumpeter’s creative destruction;
and a very clear goal, to change the economic axis of the municipality.
And one more detail, we had the White Stone.
For those who do not know, Pedra Branca is a planned neighborhood that is a reference
in sustainable urbanism in the world.
Pedra Branca offers the infrastructure
with the type of economic development
that we wanted.
Convinced the mayor, we identified the fundamental pillars of the program.
Financing, economic incentives, investment attraction
and talent training.
We set up what was the prototype of the program,
which brought together a set of bills.
The plan also included a program to qualify entrepreneurs,
with courses, consultancies, workshops.
We created a credit line with subsidized interest
and no guarantee for local entrepreneurs.
We set up an investment attraction platform
with the objective of promoting the city as an investment destination
and facilitate the life of the investor.
And lastly, we started an approximation with the local universities
to ensure the training of the talents necessary for the success of the plan.
We gave this plan the name of Inova Palhoça
and then we bring together the main actors of innovation in the state
to validate this prototype, especially its adherence
to the demands of the market.
If there were no adhesion, surely this program
would become another PowerPoint.
The plan brought a number of innovations from the point of view of
of public policies, such as an innovation fund
which does not depend on budget allocation.
All the innovation funds we analyze
depend on budgetary allocation.
The mayor, when preparing the budget for the subsequent year,
establishes a value for the innovation fund.
As innovation is never a priority for mayors,
when the envisaged budget does not materialize,
the mayor needs to contingency the budget
and always ends up contingent on the resources of the innovation fund.
Our challenge, then, was how to set up an innovation fund
which does not depend on budget allocation
and that, therefore, it was not subject to the contingencies.
Another innovative Inova Palhoça program
is what provides for the financing of working capital for companies,
from the tax generation of these same companies.
In a short time, this plan began to show signs of
that it would be working.
Numerous companies began to transfer to the municipality,
extremely innovative companies,
such as a company that produces laser marking machines
and that it was the company that according to Deloitte
most grew in Brazil between the years of 2011 and 2014.
It has grown incredible 1800%.
Or, the company that produces the first 100% Brazilian robot,
or the company that is considered
the largest pharmaceutical handling industry in the world.
This company, in only three months of operation,
has already become one of the largest taxpayers in the county.
Entrepreneurship also seems to start
to respond to the stimulus of these public policies.
In 2015, 1,5 thousand new companies were opened in the municipality.
Our incubator already has more than 30 incubated companies.
At Pedra Branca, there are already more than 500 active CNPJs
which together make more than R $ 1 billion.
A region that until recently was only a cattle ranch
has become the destination of some of the most innovative companies in the country.
We have collected some acknowledgments.
In 2015, we ranked sixth in the Connected Smart Cities ranking,
which takes into account the quality of public policies
economic development.
I know that a change like this takes a longer time
than the time of a term.
Certainly, I will not be in the Secretariat of Economic Development
when this cycle is completed, but it comforts me to know
which, in some way, contributed to stimulating
innovative entrepreneurship in the city.
I still arrive at the door of the Secretariat and I come across horses
in front of the door.
When I do not have to shake them off to get into the Secretariat.
But it comforts me to know that, in some way, I
this innovative entrepreneurship in the city.
So when you ask me what makes a developed state?
I answer: the ability to be entrepreneurs, resilient
and always innovative,
whether in the public service or in the private sector.
Thank you very much.
(Applause)
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