Introduction

Context and objective
After two years of deep recession, Brazil’s economy is currently on a path to recovery as a result of higher
commodity prices and rising consumption and investment (IMF, 2018). However, the severity of the recent
recession and the modest growth of the past decades have highlighted the need to enhance productivity and
competitiveness.
As it is generally easier to fix the roof while the sun is shining, the current rebound provides a window of opportunity to propose forward-looking solutions to strengthen Brazil’s competitiveness in the world economy. Such improvements would not only help to pave a sustainable and inclusive path to prosperity, but also to build resilience to future economic shocks. This will depend mainly on the proper functioning of its institutions, the quality of its infrastructure, the allocation of production factors, a coherent regulatory environment, a thriving workforce and a healthy innovation environment.
The World Economic Forum’s region-wide Competitiveness and Inclusive Growth Lab initiative in Latin America was launched in 2014. With the help of the experts and leaders from the Forum’s multistakeholder communities in Latin America, the initiative aimed to identify the underlying factors behind the gaps in competitiveness in the region in comparison to higher-income countries and to develop a set of recommendations to bridge these gaps. Moving beyond diagnosis, the Forum spearheaded country-level lab initiatives in Colombia and Mexico to develop and implement agendas to improve the innovation environment through public-private collaboration, based on regional-level findings.
While the findings and recommendations from the Latin America lab remain relevant, Brazil’s priorities extended
beyond the scope of those established regions. To address the country’s needs, Brazil’s Ministry of Industry, Foreign
Trade and Services (MDIC) and the World Economic Forum collaborated on the Lab initiative to shape the country’s
competitiveness agenda.
The objective of the Competitiveness and Inclusive Growth Lab – Brazil and this report is to support the design, launch and implementation of an achievable agenda to increase competitiveness by addressing some of the vital challenges identified by the stakeholders participating in this initiative.
Structure of the report
Section 2 of this report presents an in-depth analysis of the current state of competitiveness challenges in Brazil. Section 3 details the methodology and the prioritization process used to determine the scope of the lab.
Section 4 highlights the findings and policy recommendations elaborated by the Working Group
within the topics prioritized by the Steering Committee – innovation and trade for global value chain (GVC) integration, promoting a new generation of policies and addressing Brazil’s institutional, legal and regulatory framework. For each proposal, a detailed implementation plan is presented to guide policy-makers forward. Lastly, section 5 provides concluding remarks.
Expected outcome
Implementing the proposals presented in the Lab has the potential to further narrow Brazil’s competitiveness gaps
with higher-income countries. Promoting innovation and increasing trade flows to support technology spillovers
and create skilled job opportunities, enhancing policy effectiveness and accountability, and simplifying regulations
for businesses are all viable strategies to achieve sustainable increases in productivity growth rates. These
recommendations are part of a continuous effort to make tangible progress in addressing critical issues affecting
productivity in Brazil.