National competitiveness is key for development and the ability to produce innovation and improve quality of business held in a country. A competitive environment will make it possible for companies not only to develop new products and processes, but also will generate the capability of employment building a modern place for business and generation of prosperity in a nation.
To develop this complex scenario for competitiveness, it is necessary to promote some major changes. Our focus in this analysis is the identification of public policies that should be part of the government strategy to achieve innovation and employment of the workforce.
Diagnosis of competitiveness can be realized in many ways like: research with individuals and companies, direct communication tools managed by the government, councils, and other strategies. Sao Paulo State has chosen the development of a Competitiveness Council, following the path of other countries and federations.
Analyzing sub-national initiatives, it is necessary to consider aspects of the federal government's responsibility and prerogative like monetary policies, federal legislations definition of interest, and exchange rate. The diagnosis regarding federal responsibility might not be used to promote projects unless it is a national need that will promote employment and innovation in the country.
SAO PAULO STATE ECONOMIC CONTEXT
Sao Paulo is the most relevant state in Brazil. By itself, it represents 21% of the country's population and approximately 30% of its GDP. Due to its importance, it is mandatory to consider policies that impact economic and social development for the state. (The Federal Government has a role to develop every state in the country. There are policies that have been implemented to attend to this need. However, until those policies produce a real impact reducing the importance of Sao Paulo state in its productivity and inside the country immigration process, policy makers consider carefully the impact of unemployment and reduction of industrial activities in the State.) The image below summarizes the main information of the state.
Sao Paulo's manufacturing industry represents 37.42% of total national production (Table 1). In 15 out of 24 analyzed sectors, the state represents 1/3 of Brazil's total production. This evidence proves the importance of the state to the Brazilian economy due to its productive chain. Manufacturing has a global impact in other economic sectors; it generates jobs not only at the state level but also affects external suppliers, services, and commerce.
Many defend that the promotion of competitiveness generates a sustainable cycle in an economy and promotes welfare that addresses the foundational reasons and goals of competitiveness development. This development demands that policy makers...