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HOW TO REINDUSTRIALIZE BRAZIL AND DECONCENTRATE,
MODERNIZE AND MAKE BRAZILIAN INDUSTRY SUSTAINABLE
Fernando Alcoforado*
This article aims to present how the Lula government will be able to reindustrialize Brazil
and deconcentrate, modernize and make Brazilian industry sustainable. The
industrialization of the Brazilian territory had five phases throughout history described
below.
Phase 1- Implementation of sugar mills (1500-1808)
Industrial activity in Brazil began in the colonial period. Agricultural activities and
extractivism absorbed the little capital and existing labor, leaving room only for the sugar
agro-industry, small industries on the coast, the shipyards where wooden boats were built
and cottage industries. The sugar mills used sugar cane as raw material, which was
transformed into sugar for the domestic and foreign markets. In this period, there were
restrictions on the existence of industries in Brazil, because, in 1785, the Portuguese
Crown published a charter prohibiting the installation of small factories and manufactures
in Brazil.
Phase 2- Opening of factories and small factories (1808-1929)
During this period, the first Brazilian industrialists faced great difficulties, because, in
addition to producing for a small domestic market, they faced competition from English
products that arrived in Brazil at low prices, due to modest import tariffs. The situation
eased when, in 1814, the future emperor Pedro I signed the decree that opened Brazilian
ports to other nations, ending the virtual monopoly of English imports with the revocation
of the charter of 1785, which prohibited the installation of small factories and
manufactures in Brazil. The opening of ports increased the presence of imported products
in the country, in addition to those from England. The industrialization process, however,
was slow and only gained momentum during the First World War, when imported
products disappeared from the market and, with that, local production was stimulated.
Small manufacturing units emerged in areas close to the city of Salvador in Bahia, in Rio
de Janeiro and in São Paulo, among them textile factories that were located close to cotton
plantations. At the end of the 19th century, there were 636 factories in Brazil, which
quintupled during the first decade of the 20th century.
Phase 3- Import-substituting industrialization (1930-1955)
With the substantial drop in coffee exports at the end of the 1920s and the rise to power
of Getúlio Vargas, a process of import-substituting industrialization was triggered.
Investments in industrial activity relied on resources from the federal government and on
the surplus of private capital resulting from the coffee activity. The period 1930-1955
became known as the period of import substitution, when certain products that until then
had been purchased on the foreign market began to be produced by industries established
in Brazil. State capital was important for the growth of industry in Brazil, as well as for
the expansion of transport infrastructure, as was the case with railroads and ports. In this
period, there was a greater diversification of the Brazilian industrial park with the
implantation of industries in other regions of Brazil, in addition to the Southeast region

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and, also, with the implantation of important state base industries (or capital goods), such
as the Companhia Siderúrgica Nacional (CSN), Companhia Vale do Rio Doce and
Petrobras. The Volta Redonda plant played an important role in the development of the
national heavy industry, providing for the creation of new industries and the expansion
of the steel industry. From World War II to the beginning of the 1960s, the pace of
industrialization in Brazil was intense. An important step towards autonomous
industrialization was the institution of the state oil monopoly, with the creation of
Petrobrás, in 1953. Brazilian industrialization can be characterized as late because it
occurred more than 200 years after the 1st Industrial Revolution in England.
Phase 4- Internationalization of import-substituting industrialization (1956-1990)
This phase is marked by the greater entry of foreign companies into the Brazilian market,
many of which are multinationals, with emphasis on car manufacturers. This movement
was the direct result of the development policies implemented during the Juscelino
Kubitschek government. The process of internationalization of Brazilian industry gained
strength from then on and the country's industrial park now has a wide variety of factories
that produce everything from non-durable consumer goods to capital goods. There were
large investments of foreign capital that were added to national private capital, in addition
to investments by the federal government, which was responsible for offering tax and
financial incentives for new industries, in addition to creating the necessary infrastructure
for the development of production and circulation of goods and merchandise. It was
during this period that the federal government invested in the country's road
infrastructure, promoting greater national economic integration. The expansion of the
Brazilian industrial park, which began with the consumer goods industries, sought, from
the 1970s onwards, to reach a more advanced stage, that of the production of capital goods
and basic materials indispensable for accelerating the pace of general growth. One of the
most thriving industrial sectors, however, continued to be the automobile industry.
Phase 5- Deindustrialization of the Brazilian economy (1990-present)
After showing high growth from 1930 to 1987, the Brazilian industrial sector showed a
decline in its share in the formation of Brazil's GDP, which reached 27.3% share in 1987
and 11% in 2019, thus characterizing the deindustrialization of the Brazilian economy
(Figure 1). This was because, from the 1990s, the neoliberal economic model was adopted
with the opening of the Brazilian economy that facilitated the entry of international capital
into the country, intensified internal competition with the greater presence of foreign
companies and the invasion of low-cost imported products that are more competitive than
those manufactured in Brazil. This period is marked by a wave of privatization of state-
owned companies acquired, above all, by foreign companies, as well as the closure of
several national industries. It is important to note that, initially, the industry was
concentrated in the Southeast region. Afterwards, there was a process of industrial
deconcentration with the implantation of industries in other regions of Brazil.
Despite the great importance of the industry for the Brazilian economy, there have been
some losses in the last 36 years that have caused the Brazilian participation in world
industrial production to leave the top 10 and move to 16th place. Until 2014, Brazil was
among the top 10 countries in the Industry Performance ranking made by CNI, but
between 2015 and 2019, countries like Mexico, Indonesia, Russia, Taiwan, Turkey and

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Spain surpassed Brazilian production, one of the reasons being the crisis economy that
Brazil faced between 2014 and 2016. Among the main world producers, China is the
absolute leader, followed by the United States, Japan, Germany, India and South Korea.
In addition to this decline in industrial production, consequently Brazil also lost some
positions in the world ranking of exports. In 2018, Brazil was the 30th largest exporter of
manufacturing industry products, contrary to the world pace, in which most countries
increased their exports. China is the leader in exports in this sector, followed by Germany,
the United States, Japan and South Korea. Data indicate that in the last 10 years, Brazil
stopped exporting 38 million dollars [1].
Figure 1- Participation of industry in the formation of Brazil's GDP (1947 to 2019)
(% GDP)
Source: https://valoradicionado.wordpress.com/tag/pib/
Depending on the pace of production, industrial processes can be continuous, that is,
without stops in production, as is the case with oil refining, electricity supply and the
manufacture of steel products, pulp and paper and cement, or they can be discontinuous,
that is, with production stops, as is the case in the civil construction industry, shipyards,
assembly of different parts on an assembly line, the manufacture of medicines and food,
among others. Basic industries manufacture the intermediate products that transform
them into products for consumption. The main base or heavy industries are mineral
extraction, chemistry and metallurgy. Almost all other industrial activities constitute what
is called light industry. From the point of view of the destination of the product, there is
still another classification. When it comes to the production of machines, tools or means
of industrial transport, it is said that the industry is dedicated to the manufacture of capital
goods, that is, goods not intended for immediate human consumption, but to produce
other goods. Consumer goods industries are the most numerous and varied. They include
the manufacture of food, furniture, textiles, printed matter, household appliances and
electronic products, among others.

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Brazil currently has a very broad and diversified industrial park, operating in at least 33
different productive branches [2]. According to data from the National Confederation of
Industry (CNI), the transformation industry in Brazil has the following productive
branches: 1) automotive; 2) metallurgy and steelworks; 3) petrochemicals; 4) paper and
cellulose; and, 5) food. The extractive industry is also of great importance to the economy,
being responsible for part of Brazilian exports and for the destination of raw materials for
other productive branches, many of which are listed above. In this segment, the extraction
of metallic minerals and oil exploration stand out.
Figure 2 shows the map with the spatial distribution of Brazilian industry in 2015.
Figure 2- Spatial distribution of Brazilian industry
Source: https://blogdoenem.com.br/distribuicao-espacial-das-industrias-brasileiras-geografia-enem/
Figure 2 shows that there is excessive concentration of Brazilian industry in the Southeast
and South regions of Brazil. We will need, more than ever, for the Lula government to be
able to plan the deconcentration of industry in Brazil, encouraging the implementation of
new industries in the North, Northeast and Midwest of Brazil.

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The consensus among specialists is that Brazilian industry is quite behind schedule and
is still largely in the transition from what would be Industry 2.0 of the 2nd Industrial
Revolution, characterized by the use of assembly lines and electricity, to Industry 3.0 of
the 3rd Industrial Revolution that applies automation through electronics, robotics and
programming [5]. This technological backwardness of the Brazilian industry is one of the
factors that contribute to the deindustrialization of Brazil. To have an idea of Brazil's lag,
it would be necessary to install around 165,000 industrial robots to approach the current
robotic density in Germany. At the current pace, with around 1,500 robots installed per
year in the country, Brazil will take more than 100 years to reach the level of Germany.
We will need, more than ever, for the Lula government to be able to plan the
modernization of Brazil's industry, and of the country's academic and research institutions
to modernize Brazilian industry with the development of industry 4.0 [6]. We will also
need relevant levels of investment and intensive training of managers, engineers, systems
analysts and technicians in these new technologies, in addition to partnerships and
strategic alliances with entities from other countries that are more advanced in industry
4.0. One of the necessary measures for Brazil's inclusion in the 4th Industrial Revolution
consists of massive investments in the education system to qualify people with a focus on
technology [5].
In addition to facing the process of de-industrialization, the excessive concentration of
Brazilian industry in the Southeast and South regions of Brazil and the Brazilian industry
being very technologically backward, environmental sustainability is not adopted by the
vast majority of industries in the country. Industrial sustainability is the set of practices
applicable to the industry that prioritizes the intelligent use of renewable natural
resources, promoting their development without compromising the future of the next
generations. Industrial sustainability brings a series of benefits, such as protecting the
environment, improving the population's quality of life, improving the industry's image
before consumers and the market, and saving resources due to the reduction of production
costs with the adoption of energy efficiency, reuse of water and products, among other
measures. According to a survey released in 2020 by the IBGE, most Brazilian companies
that currently invest in environmental sustainability only do so to achieve a certain
institutional image [3]. Conducted between 2015 and 2017, the study points out that,
among 117 thousand companies, 33.6% were considered innovative, and among them
less than half (15.9 thousand) invested in environmental sustainability.
Knowing what are the main impacts of the industry on the environment is essential for
the industry to achieve environmental sustainability by implementing sustainable
development practices [4]. But what is sustainable development? Sustainable
development is characterized by the search for ways to meet the needs of today's society
without compromising future generations. The industry is in constant conflict with nature
in search of resources, which generates numerous impacts or environmental damage.
There are several environmental impacts of the industry in Brazil, highlighting, among
them, the contamination of water courses due to the incorrect disposal of industrial
sewage, the devastation of forests, global warming, the imbalance of the food chain, soil
degradation mainly caused by mining, air pollution, destruction of flora and fauna and
incorrect waste disposal, among others.
The main environmental impacts of the industry [3] are described below:
Contamination of water courses

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The large Brazilian industries are the main causes of pollution in our water bodies, as they
dump tons of toxic waste into rivers, lakes and oceans, which directly harms the
ecosystem and makes the water in rivers and lakes unfit for consumption and that of
oceans unsuitable for swimming and fishing. Consequently, in addition to the obvious
environmental imbalance, this practice also causes serious damage to the health of the
population living close to these contaminated sites.
Devastation of forests
Brazilian industrialization has been contributing to urban growth, which has been largely
responsible for the devastation of forests in Brazil, as is the case of the timber industry,
among others, generating imbalance throughout the environment. With the reduction of
the native forest, many animals and plants became extinct over the years. There are still
endangered species that may disappear in the near future with the continued devastation
of forests.
Air pollution
Air pollution has been a constant issue in the clash between Brazilian industry and the
environment, since tons of toxic gases are released into the atmosphere every day, such
as sulfur oxide, nitrogen oxide, carbon monoxide and carbon dioxide, among other gases.
These gases worsen the quality of the air we breathe and are also responsible for numerous
respiratory diseases, such as bronchitis and asthma. According to data revealed by the
Ministry of Health, deaths caused by air pollution in Brazil have increased by 14% in the
last decade alone.
Global warming
Brazilian industries cause the greenhouse effect as a result of human activity that has a
direct impact on global temperature warming. The main cause of this problem is the
release of toxic gases into the atmosphere by industry and means of transport using fossil
fuels (oil, gas and coal). Deforestation and burning of tropical forests in Brazil to serve
the timber industry also contribute to this negative picture. All these transformations
generate increasingly intense heat, acid rain and climate change.
Alteration of fauna and flora
The pollution caused by the production of ores to meet industry demand causes damage
to animals and native vegetation. Proof of this is the tragedy involving the rupture of a
tailings dam from the mineral activity of the Córrego do Feijão Mine, in the city of
Brumadinho, in Minas Gerais, which is considered the second biggest industrial disaster
of the century. The episode happened due to the accumulation of tailings from an iron
mine. The tragedy caused the death of 270 people, 10 of them missing, and Brazil became
the country with the highest number of fatalities in this type of accident, adding human
losses to serious (and permanent) environmental damage. An example of this are the
various plants that died because of the mud and have no guarantee that they will grow
again in the landscape. The same applies to animals that have been killed and deformed
by the mud. Tests carried out in the region proved that the spillage of waste caused the
death of several species and also caused mutations and anomalies in fish embryos in
streams and in the Rio Doce. The animal mortality rate was 100% near the mine.
Food chain imbalance

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In Brumadinho, for example, many species of vegetation were extinct in the region due
to the environmental disaster. This represents the inevitable lack of food for the animals,
which will be forced to migrate to other regions, which unbalances the entire ecosystem.
The great migration of birds, for example, generates an increase in the number of insects,
which, in turn, brings about the rise of epidemics, since many of these insects are disease
transmitters. Thus, each region in which the industries operate suffers the imminent risk
of an imbalance in the food chain and an impact on the environmental balance because,
when there is no vegetation to feed the animals, they may cease to exist.
In order to make industries sustainable and face the environmental impacts [4] described
above, the following measures must be adopted:
• Recycling of chemical and solid waste
• Water reuse
• Hiring sustainable suppliers and partners.
• Use and manufacture of products with a production process that is less harmful to the
ecosystem
• Adoption of “green transport” with logistics that are less harmful to the environment.
• Saving natural resources.
• Rational use of solar, wind, biomass, forests and water energy.
• Conscious use of water, paper and energy.
• Use of electronic signature to avoid paper printing, reducing the use of physical files.
• Shutdown of equipment and lamps at the end of the working day.
• Solid waste recycling.
• Reduction in the consumption of raw materials and the emission of polluting gases in
the air and water.
• Use of recycled raw materials.
• Correct disposal of chemical waste, especially those that need special treatment before
being sent to the sanitary landfill.
• Water reuse.
• Use of renewable energy sources.
• Preventive and predictive maintenance of equipment and machines.
• Partnerships with good suppliers.
• Encouragement of the circular economy, which is the transformation of manufacturing
into a cyclical chain of reuse, reuse and recycling.
Conclusions
In the industrial sector, the Lula government is faced with the fourfold challenge of: 1)
reversing the process of deindustrialization that Brazil has suffered from 1990 to the
present moment after the introduction of the neoliberal economic model that devastated

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the Brazilian economy; 2) deconcentrate industry in Brazil with the implementation of
new industries in the North, Northeast and Midwest of Brazil; 3) promote the
development of Industry 4.0 in the country, and, 4) make Brazilian industry
environmentally sustainable. The reindustrialization of Brazil must therefore be
accompanied by actions that also contribute to the deconcentration of industry in Brazil
with the implementation of new industries in the North, Northeast and Midwest of Brazil,
the modernization of Brazilian industry with its insertion in industry 4.0 and the
environmental sustainability of Brazilian industry.
The reindustrialization of Brazil requires the adoption of the following strategies [5]:
1) Abandon the neoliberal economic model with its replacement by the national
development model with the Brazilian State acting in the planning of the national
economy and as an inducer of the process of economic and social development.
2) Encourage the implementation of import-substituting industries for inputs and products
with financing and the granting of tax incentives to ensure national self-sufficiency.
3) Promote the selective opening of the Brazilian economy to protect the national industry
from predatory competition from imported inputs and products.
4) Promote the strengthening of the existing national industry in Brazil by offering
financing and granting tax incentives.
5) Promote the development of the national capital goods industry to make it permanently
competitive in the international market.
6) Put an end to the country's economic and technological dependence on foreign
countries by promoting autonomous scientific and technological progress, the only one
capable of making national companies permanently competitive in the international
market, with the strengthening of universities and research centers in Brazil.
The deconcentration of industry in Brazil requires the adoption of the following
strategies:
1) Strengthen SUDAM, SUDENE and SUDECO to put into practice a governmental
industrial development plan for the North, Northeast and Midwest of Brazil.
2) Grant tax incentives for setting up new industries in the North, Northeast and Midwest
regions of Brazil.
3) Grant public financing facilities to industrial investments for the implementation of
new industries in the North, Northeast and Midwest regions of Brazil.
The modernization of Brazilian industry with its insertion in Industry 4.0 requires the
adoption of the following strategies [5]:
1) Study the main problems that Brazilian industry faces to eliminate its backwardness,
given that it is still largely in the transition from what would be Industry 2.0 of the 2nd
Industrial Revolution, characterized by the use of assembly lines and electricity, to the
Industry 3.0 of the 3rd Industrial Revolution that applies automation through electronics,
robotics and programming.
2) Promote intensive training in Industry 4.0 for managers, engineers, systems analysts
and technicians in new technologies.

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3) Make massive investments in the education system in Brazil to qualify people with a
focus on technology.
4) Investigate the different technologies that can be adopted and make a long-term plan
to gradually modernize the entire national industry towards Industry 4.0, which is
characterized by the integration of so-called cyber-physical production systems, in which
intelligent sensors inform machines how they should operate in their production
processes.
5) Establish strategic alliances with entities from other countries that are more advanced
in industry 4.0.
6) Grant tax and financial incentives to industries that seek to modernize towards Industry
4.0.
The environmental sustainability of Brazilian industry requires the adoption of the
following strategies [3]:
1) Grant tax incentives and financing to industries that adopt environmentally sustainable
actions.
2) Seek the establishment by industries of environmental sustainability goals to be
pursued.
3) Establish with industries environmental sustainability goals related to the use of
renewable natural resources and the adoption of intelligent practices that promote
economic and social development without compromising the future of the next
generations.
4) Establish with the industries environmental sustainability goals related to non-pollution
or the minimum possible pollution of the environment, the proper disposal of waste using
reverse logistics, the use of renewable energy whenever possible, the reuse of water to
the maximum in industrial processes and the implementation of a culture of sustainable
development.
5) Establish environmental sustainability goals with industries related to non-pollution of
air, water and soil, non-disposal of waste in seas and rivers, non-destruction of fauna and
flora, non-invasion of the habitat of animals wild animals, the non-imbalance of the food
chain and the non-contribution to global warming with the emission of greenhouse gases.
6) Establish environmental sustainability goals with the industries related to the adoption
of the circular economy or reverse logistics to avoid the exhaustion of Brazil's natural
resources.
REFERENCES
[1] UX COMEX. A importância das indústrias na economia brasileira. Disponível no
website <https://uxcomex.com.br/2021/05/a-importancia-das-industrias-na-economia-
brasileira/>.
[2] BRASIL ESCOLA. Industrialização do Brasil. Disponível no website
<https://brasilescola.uol.com.br/brasil/industrializacao-do-brasil.htm>.
[3] SILVA, Luciana. Conheça os principais impactos da indústria no meio ambiente.
Disponível no website <https://blog-pt.checklistfacil.com/impactos-da-industria-no-
meio-ambiente/>.

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[4] ON SAFETY. Indústria E Meio Ambiente: A Importância Do Desenvolvimento
Sustentável. Disponível no website <https://onsafety.com.br/industria-e-meio-ambiente-
a-importancia-do-desenvolvimento-sustentavel/>.
[5] ALCOFORADO, Fernando. Como o governo Lula poderá reindustrializar o Brasil.
Disponível no website
<https://www.academia.edu/94807861/COMO_O_GOVERNO_LULA_PODER%C3%
81_REINDUSTRIALIZAR_O_BRASIL>.
[6] ALCOFORADO, Fernando. The future of the industry. Disponível no website
<https://www.academia.edu/45626607/THE_FUTURE_OF_THE_INDUSTRY>, 2021.
* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member
of the Bahia Academy of Education, of the SBPC- Brazilian Society for the Progress of Science and of
IPB- Polytechnic Institute of Bahia, engineer and doctor in Territorial Planning and Regional Development
from the University of Barcelona, university professor (Engineering, Economy and Administration) and
consultant in the areas of strategic planning, business planning, regional planning, urban planning and
energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric
power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia
Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning
of Salvador, is the author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC-
O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil
(Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de
doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização
e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século
XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions
of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária
(Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o
progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo,
São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV,
Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI
(Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o
Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba,
2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018), Como
inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019), A humanidade ameaçada e as
estratégias para sua sobrevivência (Editora Dialética, São Paulo, 2021), A escalada da ciência e da
tecnologia e sua contribuição ao progresso e à sobrevivência da humanidade(Editora CRV, Curitiba,
2022)and a chapter in the book Flood Handbook (CRC Press, Boca Raton, Florida, United States, 2022).