Entrepreneurial Engines of Economic Growth around the World
Edited by Jerome S. Engel
Chapter 12: Brazil: good governance in the tropics–the rise of the Porto Digital Cluster of Innovation
This chapter tells the compelling story of the rise of the Porto Digital (‘Digital Port’) technology cluster in Recife, Northeast Brazil, now recognized as one of the foremost innovation regions in the country. What forces gave rise to the Porto Digital? What is unique about the cluster and how does it fit within the Cluster of Innovation (COI) Framework? And what are the lessons and implications for public policy in other developing regions? The chapter is based on the author’s experience in Recife in the 1990s, his ongoing experience directing cluster development initiatives in Brazil and other countries, and a recent return trip to Recife, almost 15 years later, to observe the progress of the Porto Digital. Public and private sector leaders in developing countries increasingly recognize the importance of innovation and entrepreneurship in promoting economic development. Nevertheless, developing countries face significant institutional challenges for the development of entrepreneurial companies and COI–these challenges relate to finance, infrastructure, human capital, innovation systems, the regulatory environment, as well as cultural barriers to entrepreneurship. As a result of these institutional constraints, developing countries often struggle to create the types of entrepreneurial and innovation ecosystems found in many industrialized nations, and particularly to create COI, which are characterized by mobility of assets and entrepreneurial dynamism (Engel and del-Palacio, 2009 and 2011).
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