SXSWorld
Issue link: https://sxsw.uberflip.com/i/250660
Despite Barriers, Brazil's Creative Industries Becoming Economic Force by Lissette Corsa T hough athletic prowess and the spirit of competition will be on display in Brazil both during this summer's FIFA World Cup and at the 2016 Olympics in Rio de Janeiro, a new generation of techsavvy consumers and emerging creative industries will also demonstrate the unique demands for creative goods and services in 21st century Brazil. Whether they represent the long heralded promise of economic progress in a nation of nearly 200 million remains to be seen, but access to technology and the promotion of creative industries by both the government and private sector will be key to its success. No longer a sleeping giant, Brazil has catapulted to the international forefront with the world's sixth largest economy. Unemployment has sunk from 13.5% to 5.6% over the past 10 years, with 40 million Brazilians entering the middle class. With Internet connectivity in Brazil almost doubling over the last five years, the potential of a social media market is starting to impact the economy. The nation is now the second largest market after the U.S. for Facebook use, with some 40 million people regularly engaged with social media, and in 2012 the country saw a 73% increase in smartphone ownership, with 15.4 million devices purchased. "We love to connect and that is something very important for the creative economy," affirms Pedro Waengertner, founder of São Paulobased, startup accelerator Aceleratech. "Our mission is to drive them more and more to the creative side of business." Part of Start-Up Brasil, a public program that provides up to $100,000 in funding to up-and-coming entrepreneurs, Aceleratech offers mentoring, education and structure to innovative new businesses. During its first year, Aceleratech helped fund 100 new companies and currently has 23 companies on its portfolio, of which 30% are profitable. Still, Brazil's consumption of technology continues to outpace its production, representing roughly 5% of the country's GDP. "When we speak about the creative economy, we still have a long way to go in 28 SXSWORLD / FEBRUARY 2014 terms of tax policies and bureaucracy," Waengertner asserts. "But we are heading in a very positive direction." André Sturm, president of Cinema do Brasil, agrees, pointing to the government's significant role in partnerships with the private sector. Created to promote Brazilian films abroad, Cinema do Brasil's main partner is Apex-Brasil, the Brazilian Trade and Investment Promotion Agency that also supports programs in other creative industry areas. "With more exposure than ever, Brazilian cinema is represented in more international festivals and events, and our movies are distributed and shown everywhere," Sturm boasts. The music industry is increasingly becoming more global, as Brazilian indie bands blend local traditions with international influences. David McLoughlin, of Brasil Music Exchange, is focused on stimulating and promoting this new wave of artists. "Whereas previously the music industry was focused on the Rio / São Paulo axis, we're increasingly seeing a rise in innovative participation from the rest of the country," McLoughlin explains. He says that music professionals are also entering other creative industry areas (fashion, marketing, etc. ...) rather than solely seeking revenue through the live circuit. "This can be in part due to financial necessity but also because the public discussions on the creative economy have shifted the focus from music being a cultural manifestation to being an economic force." Across Brazil, local governments are investing in shows at trade fairs and helping bands embark on international tours. A very recent development, McLoughlin says, is the rise of Brazilian companies investing in developing software and apps specifically for the music industry. Indeed, the viability of a high-tech economy is one of the driving forces behind the push for a nationally sustainable and globally significant creative industry. "We are, by nature, a very creative nation," Waengertner says. "But we still fall behind in terms of entrepreneurship culture." Though this may be changing at a rapid pace, certain obstacles stand in the way. "Our main challenge is to develop companies amidst the bureaucracy and be able to focus on the business side without killing the creative part of it," Waengertner explains. Although the creative economy has been a topic of discussion in Brazil since 2004, when São Paulo hosted the United Nations Conference on Trade and Development (UNCTAD), it wasn't until 2011 that the government created a special agency, the Secretariat of Creative Economy, with goals of promotion, training, infrastructure and regulation. Last year, the Brazilian government invested $4.3 million towards the growth of creative industries within Recife's Porto Digital, one of the largest tech parks in the country housing 150 IT firms that generated approximately $488 million in 2012. Other projects include the Seed (Startups and Entrepreneurship Ecosystem Development) program, an initiative launched by the state of Minas Gerais, and the Brazilian Service of Support for Micro and Small Enterprises (SEBRAE), which has regional projects in Rio, Bahia and Minas Gerais that support the development of small-sized business activity. Still, banks and venture capitalists in Brazil are stuck in the dark ages when it comes to placing value on idea-driven ventures. "We still do not have investors in Brazil who will bet on a company that has a very cool idea but no clue on how to make money," Waengertner affirms. "We have to adapt … It's all about creating a sustainable ecosystem." n