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21STCENTURYLEAPFROGECONOMICSTRATEGY:RIOGRANDEDOSULBECOMESTHEMOSTSUSTAINABLEANDINNOVATIVE

PLACEINLATINAMERICABY2030

AReporttotheRioGrandedoSulStateGovernment(AGDI)andthe

WorldBank,byGlobalUrbanDevelopment(GUD)andUnisinos,applyingGUDsMetropolitanEconomicStrategy,SustainableInnovation,and

InclusiveProsperityFramework

Dr.MarcA.Weiss,NancyJ.SedmakWeiss,andDr.ElaineYamashitaRodriguez

PortoAlegre,Brazil

March24,2015

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TABLEOFCONTENTS

EXECUTIVESUMMARY 3ACKNOWLEDGEMENTS 7INTRODUCTION 9OverviewoftheRioGrandedoSul21stCenturyLeapfrogEconomicStrategy 14

FirstKeyRSEconomicChallenge:GROWTH 15SecondKeyRSEconomicChallenge:PRODUCTIVITY 16ThirdKeyRSEconomicChallenge:DEMOGRAPHICS 16FourthKeyRSEconomicChallenge:COMPETITIVENESS 17FifthKeyRSEconomicChallenge:INFRASTRUCTUREANDEDUCATION 18WhytheLeapfrogEconomicStrategywillWorkforRioGrandedoSul 19BuildingfromStrength:Agriculture,Livestock,FoodProcessing,andMetalMechanicManufacturing 20GeneratingDynamism:PrecisionProduction,SmartMachines,andDigitalTechnology 21SustainableInnovation 22SustainableInnovationZones 22InclusiveProsperity 23MovingForward 23

RIOGRANDEDOSULLEAPFROGECONOMICSTRATEGYANDKEYRECOMMENDATIONS 25MetropolitanEconomicStrategy/SustainableInnovation/InclusiveProsperityFramework 26FundamentalAssets 33NationalGovernorsAssociation,ClintonAdministration,Baltimore,Washington&NoMa 34KeyLessonsforEconomicDevelopment 43SustainableInnovationandSustainableEconomicDevelopment 44GUD2012MinasGeraisandRioGrandedoSulReports 48

RioGrandedoSulLeapfrogEconomicStrategy:MostSustainableandInnovativePlaceinLatinAmericaby2030 53

RioGrandedoSulLeapfrogEconomicStrategy:RegionalFocus 54RioGrandedoSulFundamentalAssets 61RioGrandedoSulsTopIndustryRankingsinBrazil 62RioGrandedoSulTechnologyBusinesses 63KeyDrivers:

PrecisionProduction,SmartMachines,andDigitalTechnology 67FoodProductionValueChain 70SustainableInnovationinPrecisionAgricultureandBiotechnologyforFood,Health,andEnvironment 75StrengtheningValueChains 77AdvancedManufacturingSustainableInnovationTechnologies 79RenewableEnergyandCleanTechnologies 83PrecisionEngineeringandNaval/OffshoreIndustryValue Chain 89SustainableInnovationinChemicals,Polymers,andNewMaterials 91GlobalBrandingandMarketing:FashionandDesign,CultureandCreativity,ArtsandTourism,SportsandEntertainment 92InternationalSupport 96HigherEducation,Research,andWorkforceDevelopment 99EntrepreneurshipandStartups 113Infrastructure,Transportation,andLogistics 120SustainableInnovationZones 132Conclusion 157

Appendix 159Glossary 174

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EXECUTIVESUMMARY

SinceNovember2011,GlobalUrbanDevelopmenthasbeenworkingwiththeRioGrandedoSul(RS)stategovernmentandwiththeFederationofIndustries(FIERGS)toapplyGUDsMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperitystrategicpolicyandactionframework.ForthepastyearGUDhasbeencollaboratingwithUnisinosandAGDItoproduceastatewideeconomicstrategyforRioGrandedoSul,withfundingprovidedbytheWorldBank.Thislengthyreportrepresentsthefruitsofourefforts.RioGrandedoSulhasbeenaneconomicleaderinBrazilforalongtime.Inthe20thcenturyRSbecameoneofthefirststatestosuccessfullyindustrialize,andtodayitremainsthethirdbiggestindustrialeconomyamongBrazilsstates.MorethanadozenRSindustriesareeitherthelargestorsecondlargestinBrazilcomparedtosimilarindustriesinotherstates.YetRioGrandedoSulisfacingconsiderableeconomicchallengesinthecomingdecades:relativelysloweconomicgrowth,decreasingworkforcepopulation,modestproductivityimprovement,increasingglobalcompetition,andinsufficientresourcestoupgradeinfrastructureandeducation,amongothers.Thealternativetothisprojectedslowgrowthfutureistovigorouslypromoteamuchmoredynamic,highgrowthfuture,withbroadbasedemploymentandincomegains.ThebestwayforRioGrandedoSultoachieveanewlevelofprosperityandqualityoflifeforGachofamiliesandcommunitiesisbybecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030.Wecallthisapproachthe21stcenturyRioGrandedoSulLeapfrogEconomicStrategy,becauseitinvolvesjumpingaheadofthepresentintoamoretechnologicallyadvancedfuture.TheproposedLeapfrogEconomicStrategyforRioGrandedoSultobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030directlyaddressesfivekeyeconomicchallenges:1)theLeapfrogEconomicStrategydoublestheRSeconomicgrowthratetoanaverageof4percentannualpercapitaGDPgrowthover16years;2)theLeapfrogEconomicStrategydramaticallyincreasesproductivitybyupgradingskillsandtechnologies;3)theLeapfrogEconomicStrategyexpandstheworkingagepopulationbyretainingandattractingamoreeducatedandtalentedworkforce;4)theLeapfrogEconomicStrategystrengthensglobalcompetitivenessbyproducingtechnologicallyadvancedandinnovativegoodsandservicesthatcompetemoreeffectivelywithimportsandareingreaterdemandasexports;5)theLeapfrogEconomicStrategyimprovesinfrastructureandeducationbyattractingsubstantialinternationalandprivatesectorinvestments,andbyenhancingresourceefficiency.ThebestpartaboutthisstrategyisthatitmakesfulluseofthetraditionalstrengthsoftheRSeconomy,enablingthemtogrowevenstronger.Themainengineof

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economicgrowthoverthenext16yearswillcontinuetobethemassiveFoodProductionValueChainofRioGrandedoSul,whichrepresentsnearlyonethirdofthestateseconomyintermsofagriculture,livestock,foodprocessing,marketing,distribution,andthemanycloselyrelatedbusinessactivitiesinmanufacturingandservices.Becauseglobalfooddemandwillincrease50percentby2030,theRSFoodProductionValueChainwillhaveevenbetteropportunitiestobetherisingtidethatliftsallboats.ThecentralthrustoftheRSLeapfrogEconomicStrategywillbetobecomea21stcenturyleaderinSustainableInnovationbydeveloping,producing,andmarketingaveryadvancedgenerationofPrecisionProduction,SmartMachines,andDigitalTechnology,comprehensivelyappliedtoagriculture,industry,andservices.ThisapproachbuildsonexistingRSassetsandstrengthsinmetalmechanicsandelectricelectronics,fromagriculturalmachinery/equipment/implementsandtransportationequipment/motorvehicles/autoparts,toautomationandcontrols.ItfocusesonhigherproductivitythroughnewmethodsofPrecisionProduction,includingPrecisionAgriculture,whereRioGrandedoSulalreadyisbecominganinternationalleader,andPrecisionEngineering,currentlybeingintroducedintoRSshipyardsconstructingheavydutyoffshoreoilexplorationplatforms,vessels,andequipment.TheemphasisondigitaltechnologyputsRSbusinessesaheadofthecurvefortheinnovationsoftomorrow,includingbothhardwareandsoftwarecomponentsofgoods,services,andproductionprocesses.RScanbecomemoregloballycompetitiveindigitalsoftwarebyeducating,attracting,andretaininghighqualitytalent,whichwillfacilitatefastereconomicandtechnologicalprogressevenbeforemajorimprovementsarecompletedinmoderntransportationmobility,efficientrenewableenergy,andbroadbandtelecommunicationsinfrastructure.ThisstrategymaximizesexistingRSstrengths,evenasitbuildstowardsmuchgreatercapacityforGachostodevelopanduseadvancedtechnologiesoverthenext16years.ThefocusonSustainableInnovationisvitalforthesuccessoftheLeapfrogEconomicStrategy.Thefutureoftheworldwillbeaboutfindingwaysforbillionsofpeopletoliveandthriveinpeacewitheachotherandinpeacewithnature.Andthegoodnewsisthatinthe21stcentury,people,places,andorganizationscanliterallygetricherbybecominggreenerearningandsavingmoremoneybyconservingandreusingresourcesmuchmoreefficiently.Manyofthemajortechnologicaladvancesofthecomingdecadeswillinvolveenablingpeopletoenjoyeconomicprosperityandqualityoflifeinwaysthatconserveandreusenaturalresourcesandprotectandenhanceglobalecosystems.TheplacesintheworldthatLeapfrogintosuchafuture,assomeplacesalreadyaredoing,willhaveahugeeconomiccompetitiveadvantageovertherestoftheworld.AndthefirstplacesamongemergingeconomiesindevelopingcountriesthatcanaccomplishsuchtechnologicalbreakthroughsdefinitelywillLeapfrogintothefrontranksofglobalcompetitiveness.Thiswillhappenfortwomainreasons.First,

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becausetheirexpertiseandexperience,reflectedintheirproductsandservices,willbeofenormousvaluetotherestoftheworld,asitwillbetotheirownpeople.Second,becausemanyglobalresourceswillflowtosuchplacesfromelsewhere:talent,technologies,investors,entrepreneurs,students,scholars,traders,tourists,developers,donors,andmuchmore.TheworldhasahugeinterestinsupportingplacescommittedtoSustainableInnovation,andthisgrowinginterestandtheglobalresourcesthatcomewithitwillincreaseexponentiallyduringthecomingdecade.RioGrandedoSulnowhastheopportunity,bycommittingin2015tobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030,toachieveexemplary,highquality,andbroadbasedeconomicgrowthoverthenext16years.Thefollowingreportoutlineskeystrategiesandfeaturesmanydetailedexamplesandopportunities.OneofthemostimportantoftheseisSustainableInnovationZones.SustainableInnovationZonesareacenterpieceoftheRS2030LeapfrogEconomicStrategy.Thesemanyspecialareasinmunicipalitiesthroughoutthestatewillbeamongtheleadingcentersforresearchanddevelopmentofnewtechnologies,entrepreneurialstartupsandbusinessincubationandacceleration,stateoftheartmethodsforimprovingsustainabilityandresourceefficiencyinbusinessanddailylife,reducingburdensomerulesandregulationstocreateamorebusinessfriendlyenvironment,establishingpublicprivatecollaborationinstrategicinvestmentsandparticipatoryurbanmanagement,andmuchmore.SustainableInnovationZonesinRioGrandedoSulwillbelocatedinmixedusecommunitiesnearcollegesanduniversities,technologyparks,andtechnologybusinessincubators,withcommerce,housing,andotherkeyamenitiesandservices.Theywillbemagnetsforinternationaltalentandexperimentsin21stcenturytechnology.ThegoaloftheRSLeapfrogEconomicStrategywillbetodramaticallyimprovethestandardoflivingformanymorepeopleandplacesinRioGrandedoSul,generatinggreaterprosperityandqualityoflifeforGachosandenhancinglivelihoodsandwellbeingforfamiliesandcommunitiesthroughoutthestate.Thisgoalwillbeachievedthroughmuchmoredynamic,rapid,broadbased,andlongtermeconomicgrowthdrivenbySustainableInnovationandInclusiveProsperity.AstheRSLeapfrogEconomicStrategysuccessfullymovesforward,jobsandincomeswillgrowformillionsofpeople,andpublicandprivateresourceswillthenexpandtoenablesubstantialnewinvestmentsincleanerwater,moreeffectivesanitation,betterhousing,andmanyothervitalnecessitiesofinfrastructureandtransportation,healthandeducation,safetyandsecurity,storesandservices,forallincomelevelsstatewide.

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TheRSLeapfrogEconomicStrategymaximizeseveryoneseconomiccontributionsbyfullyutilizingtheirtalentsandexpertisethroughproductiveemploymentandcompetitivebusinessopportunities,andbyensuringthatsuchcontributionsarerewardedwithrisingincomesandassetownership.OneofthebestwaystoaccelerateeconomicgrowthinRSistodevelopahighlyproductiveworkforce,bothbyenhancingeducation,skillstraining,andadvancedtechnologiesforthestatesresidentsandinvolvingthemmoreactivelyindynamiceconomicactivities,andbyattractingandretainingenergeticentrepreneursandprofessionalsfromotherstatesandcountries.

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ACKNOWLEDGEMENTSThisreportbyGlobalUrbanDevelopment(GUD)andUnisinoswasresearchedandwrittenbyDr.MarcA.Weiss(GUDChairmanandCEO,andformerUnisinosInternationalProfessorofEconomicsandBusinessManagement),NancyJ.SedmakWeiss,Esq.(GUDSecretaryTreasurerandChiefLegalOfficer),andDr.ElaineYamashitaRodriguez(GUDVicePresident).ResearchassistancewasprovidedbythreegraduatestudentsfromUnisinos,andwedeeplyappreciatetheexcellentworkofRosangelaViegasMaraschin(ManagementAdviser,SINDUSCOMSL),VivianSebbenAdami(AssociateConsultant,Produttare),andNilsoFrancio(Professor,UNEMAT).ThisdocumentisafollowuptoaGUDreportinDecember2012forFIERGS,AGDI,andtheM.StorttiBusinessConsultingGrouponLocalandRegionalEconomicDevelopmentOpportunitiesRelatedtotheImplementationoftheSoJosdoNorteEBRShipyardinRioGrandedoSul.Dr.MarcWeissservedasInternationalProfessorofEconomicsandBusinessManagementatUnisinosfromMarchtoDecember2014.Heappreciatestheinvolvementofhisfacultycolleaguesinthisproject.MarceloMachado,Unisinosprojectcoordinator,accompaniedusonathreedaysitevisittoBag,Pelotas,RioGrande,andSoJosdoNorte;JorgeVerschooreaccompaniedusonaonedaysitevisittoCapodaCanoaandOsrio;andtheybothparticipatedinnumerousmeetings,particularlywithAGDI.AndrAzevedoorganizedtwokeymeetingswithFEDERASUL,andOscarRudyKronmeyerarrangedanimportantmeetingwithABINEE.OtherUnisinosfacultycolleaguesalsoprovidedadviceandassistance,includingTiagoWikstromAlves,JunicoAntunes,PatriciaFagundesCabral,FilipeCosta,ArturJacobus,SusanaKakuta,DoroteaKersch,TaniaCaloviPereira,EdilarPredabon,DanielPuffal,EduardoRodrigues,MiriamSchaeffer,andYedaSwirski.WearegratefultotheRectorofUnisinos,MarceloFernandesdeAquino,forstronglysupportingthisresearchproject.Manyprofessorsandadministratorsatothercolleges,universities,institutes,researchinstitutions,technologyparks,techpoles,NEPIs,APLs,andbusinessincubatorsthroughoutRioGrandedoSulfederal,state,municipal,private,andcommunityalsoplayedavitalroleinadvisingandassistingthisproject.TheGUDUnisinosteamisgratefulforextensiveinformationsources,strategicadvice,andtechnicalassistanceprovidedbyseniorRioGrandedoSul(RS)stategovernmentofficialsfromSDECT,AGDI,SDPI,SEPLAN,SEPLAG,DEPLAN,FEE,BRDE,BADESUL,CDES,SCIT,CIENTEC,FAPERGS,SESAMPE,METROPLAN,SEMA,RSSustentvel,InternationalRelations,andmanyotherdepartmentsandagencies.Weweregreatlyassistedbymanystatewideandnationalbusinessandindustryorganizations,industryfederations,andlocalbusinessgroups,includingABINEE,ABTP,AMCHAM,ASSESPRO,ASSINTECAL,CIC,CNI,FARSUL,FECOMERCIO,FEDERASUL,FIERGS,IBRAVIN,MBC,PROAMB,SEBRAE,SENAI,SINDIELICA,SINDILOJAS,SINDIMVEIS,SINDUSCOM,andnumerousothers.

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Wealsoappreciatethecooperationofawiderangeofcivicorganizations,includingAgenda2020,CITE,Agapan,andUrbsNova.Weareparticularlygratefultothe28RegionalDevelopmentCouncils(COREDESRS)forsharingideas,information,experiences,andregionalstrategieswithus.WewanttothankBrazilsfederalMinistryofDevelopment,IndustryandTrade(MDIC),theBrazilianAgencyforIndustrialDevelopment(ABDI),theRSDepartmentofDevelopmentandInvestmentPromotion(SDPI),theRSGachoAgencyforDevelopmentandInvestmentPromotion(AGDI),theRSDepartmentofEconomicDevelopment,Science,andTechnology(SDECT),andtheGlobalFederationofCompetitivenessCouncils(GFCC)forencouragingandsupportingthisproject,andwewanttoespeciallythanktheWorldBankforfundingtheproject.InadditiontoourUnisinoscolleagues,weparticularlyappreciatemanyotherpeoplewhoplayedkeyrolesinhelpingtocreatethisproject,includingRobertoAlvarez,JunicoAntunes,JorgeAudy,HelenaBackes,PedroBandeira,LucianeBergue,JorgeBoeira,EdgarBortolini,AnaBulow,CzarBusatto,ErikCamarano,OtvioCamargo,AntonioCargnin,HugoMarquesChimenes,MarcusCoester,IvanDePellegrin,JacksonDeToni,JulioCsarFerst,MarcoFranceschi,BanningGarrett,TarsoGenro,DaniloGiroldo,ThaiseGraziadio,FernandoGuimares,CarlosHenriqueHorn,SrgioKapron,ThomasKenyon,MauroKnijnik,MauroBorgesLemos,RafaelLucchesi,ErnaniMachado,lvaroMagalhes,AndriaMartins,JosCesarMartins,VanessaMarx,EberMarzulo,WalkerMassa,SebastioMelo,FranciscoMilanez,JooMotta,JamesNixon,AlosioNbrega,MoemaNunes,TarsonNez,JooPedroRoth,PhillipSingerman,ErikSoderberg,WernerTrieloff,JorgeUssan,DanielyVotto,DeborahWetzel,DeborahWinceSmith,andSimoneZerbinato.Finally,wededicatethisreporttoourdearfriend,colleague,andmentor,SirPeterHall,GlobalUrbanDevelopmentsCoFounderandViceChairsince2001,andBartlettProfessorofPlanningandRegenerationatUniversityCollegeLondon.PeterHallpassedawayinLondononJuly30,2014.Hewas82yearsold.Wegreatlymisshim.PetergraciouslyprovidedwiseandexperiencedadviceforGUDsworkinRioGrandedoSul.Hisvisionandspiritarewellreflectedinthisstrategicreport.FormoreinformationaboutSirPeterHall,pleasereviewthefollowinglinks:(http://www.globalurban.org/Peter_Hall_Tribute.pdf;http://www.globalurban.org/Built_Environment_Peter_Hall_article.pdf).

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INTRODUCTIONThisprojectbeganinearlySeptember2011,whenDr.MarcWeisswasgraciouslyinvitedbytheBrazilianAgencyforIndustrialDevelopment(ABDI),theBrazilianCompetitivenessMovement(MBC),andtheUSCouncilonCompetitivenesstoparticipateintheUSBrazilInnovationLearningLaboratorylaterthatmonthatDukeUniversityinDurham,NorthCarolina.Dr.MauroBorgesLemos,PresidentofABDI(laterhebecamefederalMinisterofDevelopment,Industry,andTrade,andnowheisPresidentofCEMIGinMinasGerais),andRobertoAlvarez,ABDIsInternationalAffairsManager(currentlyheisExecutiveDirectoroftheGlobalFederationofCompetitivenessCouncilsinWashington,DC)metwithDr.MarcWeissattheUSBrazilInnovationLearningLaboratoryandaskedhimifGUDwouldbewillingtoapplyitsMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityframeworkfortheStateofRioGrandedoSul(http://www.globalurban.org/Harvard_MES_article.pdf).AtthattimeGUDwasworkingwiththegovernmentofBrazilandtheUSgovernmentontheEnergyandClimatePartnershipoftheAmericas(ECPA).GUDhelpedorganizeforECPAaninternationalconferenceonSustainableEconomicDevelopment,hostedbythecityofCuritibainJune2011(http://www.globalurban.org/ECPA_Conference_Agenda.pdf;http://www.globalurban.org/Green_Capitalism.pdf).Inaddition,GUDwasworkingwiththeFederationofIndustriesoftheStateofMinasGerais(FIEMG)onafutureorientedSustainableInnovationeconomicstrategy,culminatinginGUDsOctober2012reportforFIEMGonAdvancedManufacturingandSustainableInnovation:TheThirdWaveofIndustrialandUrbanEconomicGrowthforMinasGerais(availableinEnglishandPortugueseonGUDswebsite):(http://www.globalurban.org/Advanced_Manufacturing_and_Sustainable_Innovation__Economic_Growth_for_Minas_Gerais.pdf;http://www.globalurban.org/Manufatura_Avancada_e_Inovacao_Sustentavel_em_Minas_Gerais.pdf).Also,GUDwasworkingwiththeSoPaulocityandstategovernments,BrazilsMinistryofCities,andtheUSDepartmentofHousingandUrbanDevelopment(HUD)ontwomajorsustainableurbandevelopment,economicregeneration,andaffordablehousinginitiatives,CidadeCompactaandCasaPaulista(http://www.globalurban.org/Sao_Paulo_2011_International_Congress_for_Housing_&_Urban_Development.pdf).GUDacceptedDr.LemosrequesttoworkwithRioGrandedoSul,andinNovember2011,Dr.WeisstraveledtoPortoAlegretospeakattheUSBrazilInnovationLearningLaboratoryhostedbyPUCRS(http://www.globalurban.org/INNOVATION_LEARNING_US

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Brazil_2011_Porto_Alegre.pdf)andtoparticipateintheannualmeetingoftheGlobalFederationofCompetitivenessCouncils(GFCC),heldatthePlazaSoRafaelHotel.AttheGFCCmeeting,Dr.LemosintroducedDr.WeisstoMauroKnijnik,RSSecretaryofDevelopmentandInvestmentPromotion(SDPI),JunicoAntunes,SDPIDeputySecretary,MarcusCoester,AGDIPresident,IvanDePellegrin,AGDIDirectorofPlanningandPrograms(hebecameAGDIPresidentin2013),andotherRSgovernmentandbusinessleaders.GUDagreedtoworkwithFIERGSandtheM.StorttiBusinessConsultingGroup,withfundingprovidedbyAGDI,toapplyourMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityframeworktothecitiesandregionofthePoloNaval(Naval/OffshoreIndustry),especiallyRioGrande,Pelotas,andSoJosdoNorte.InFebruary2012,IvanDePellegrinandMoemaNunes,AGDIsDirectorandDeputyDirectorofPlanningandPrograms,gavealectureaboutRSeconomicdevelopmentandindustrialpolicyinthegraduatecoursetaughtbyDr.MarcWeissonGlobalUrbanPolicyandDevelopmentatColumbiaUniversitysSchoolofInternationalandPublicAffairs(SIPA)inNewYorkCity(http://www.globalurban.org/GUD_Columbia_University_SIPA_Course.pdf).Dr.WeissandNancySedmakWeissreturnedtoPortoAlegreforthreeweeksfromlateOctobertomidNovember2012.Dr.WeisswasafeaturedspeakerattheFIERGSInnovationConference(http://fiergs.org.br/inovacao2012/programacao.asp?link=p7&dia=1).LaterheandMs.SedmakWeissspentseveraldays,accompaniedbyMarcoFranceschi,AGDIDirectorofInfrastructureandEnergy,conductinginterviewsandsitevisitsinRioGrande,Pelotas,andSoJosdoNorte.Dr.WeissandMs.SedmakWeissalsoconductedinterviewsandparticipatedinvariousmeetingsinPortoAlegrewithRSstategovernmentofficialsandbusinessleaders.InDecember2012,Dr.Weiss,Ms.SedmakWeiss,andDr.ElaineYamashitaRodriguezproducedareportonLocalandRegionalEconomicDevelopmentOpportunitiesRelatedtotheImplementationoftheSoJosdoNorteEBRShipyardinRioGrandedoSul(availableinEnglishandPortugueseonGUDswebsite:(http://www.globalurban.org/Local_and_Regional_Economic_Development_Opportunities_Related_to_the_Implementation_of_the_Sao_Jose_do_Norte_EBR_Shipyard_in_Rio_Grande_do_Sul.pdf;http://www.globalurban.org/Oportunidades_de_Desenvolvimento_Local_e_Regional_Relacionados_a_Implementacao_do_Estaleiro_EBR_de_Sao_Jose_do_Norte.pdf).PriortoourreturnvisittoPortoAlegreinlateOctober2012,GUDorganizedaNetworkingEventinSeptember2012attheUnitedNationsWorldUrbanForuminNaples,ItalyonMetropolitanEconomicStrategyandSustainableEconomicDevelopmentinBrazilthatincludedDr.MauroBorgesLemos,MarcusCoester,andDr.MarcWeissamongthefeaturedspeakers(http://www.globalurban.org/Metropolitan_Economic_Strategy_and_Sustainable_Economic_Development_in_Brazil.pdf;http://www.globalurban.org/UN_Rio_Grande_do_Sul_Presentation.pdf).

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During2013and2014,GUDcontinuedworkingasconsultantsforFIERGStohelpplantheir2014InnovationConference.ThisinvolvedorganizinganinternationalBrazilSustainableInnovationAdvisoryGroupandholdingamajormeetingforFIERGSinWashington,DCinAugust2013(http://www.globalurban.org/Brazil_Sustainable_Innovation_International_Advisory_Group.pdf).GUDthenrecommendedseveralinternationalspeakersfortheFIERGS2014InnovationConference,includingBanningGarrettandAlfredWatkinsfromWashington,DC,andFlorianLennertfromBerlinandLondon(http://fiergs.org.br/inovacao2014/programacao.asp?link=p7&dia=1).Also,inSeptember2013,Dr.WeisswasaLeadingSpeakeronApplyingNewTechnologiesforGreaterMobilityatthe3rdUSBrazilInnovationSummithostedbyBNDESinRiodeJaneiro(http://www.globalurban.org/USBrazil_Innovation_Summit.pdf;http://www.globalurban.org/US_Brazil_Innovation_Summit_Agenda_complete_final_version.pdf).

UponcompletionofGUDsDecember2012report,SDPIandAGDIaskedGUDtoprepareastatewideeconomicstrategyforRioGrandedoSul,andobtainedfundingfromtheWorldBankforaoneyearproject.ItwasagreedthatUnisinoswouldreceivethefundingandpayGUDtocollaborateontheproject,includinghiringDr.MarcWeissasanInternationalProfessorofEconomicsandBusinessManagement.Inpreparation,GUDorganizedseveralmeetingsforAGDIinWashington,DCwiththeUSStateDepartment,NationalGovernorsAssociation,USChamberofCommerce,AtlanticCouncil,WilsonCenter,andotherorganizations.AGDIsnewPresident,IvanDePellegrin,gaveapresentationonRStotheBrazilUSBusinessCouncilinWashingtonduringMarch2013:(http://www.globalurban.org/Rio_Grande_do_Sul_Presentation_to_BrazilUS_Business_Council.pdf).ThisRSstatewideeconomicstrategyprojectofficiallycommencedonMarch10,2014.DuetotheOctober2014elections,itwasagreedthatthelongterm(16year)LeapfrogEconomicStrategybasedonthisreportwouldbedevelopedforthenewRSstategovernmentexecutiveadministrationthatwouldtakeofficebeginningin2015.Accordingly,allofourstrategicpolicyandactionadviceandrecommendationshavebeendevelopeddirectlyforGovernorJosIvoSartoriandhisseniorleadershipteam,includingCarlosBrigo,SecretaryGeneraloftheGovernment(SGG),FbioBranco,SecretaryofEconomicDevelopment,Science,andTechnology(SDECT),CristianoTatsch,SecretaryofPlanningandRegionalDevelopment(SEPLAN),andSusanaKakuta,PresidentoftheDevelopmentBankofRioGrandedoSul(BADESUL),amongmanyothers.InconductingourresearchandanalysisofRioGrandedoSulseconomicpast,present,andpotentialfuture,wewereassistedbymanygovernment,business,andacademicsources,allofwhicharementionedintheAcknowledgementsforthis

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report.Weprofoundlyappreciatetheadviceandinformationwereceivedthroughoutthisyearlongprocess.Inparticular,wewerepleasedtouseextensiveresearchbyourUnisinoscolleagueswhocompiledsubstantialdatafortheTechnicalReporttoAGDI,EconomicandSpatialDevelopmentofRioGrandedoSul,whichprovideskeybackgroundinformationasacompaniondocumenttoourreport.Further,weobtainedconsiderableinformationandinsightsfromAGDIstaff,includingthe27businesssectorsoftheRSIndustrialPolicy,theAPLsandNEPIs,renewableenergyandstrategicinfrastructure,andmanyotherissues.Also,majorresearchbyDEPLANandFEEforSEPLAGonregionalplanningwasquitevaluable,especiallytheirexcellentthreevolume2014jointreport,RS2030:AgendaforTerritorialDevelopment.Finally,weobtainednumerousideasandstatisticsfromthe28RegionalDevelopmentCouncils,includingtheimportant2014COREDESbook,ProRSV:ProposedStrategiesforRegionalDevelopmentintheStateofRioGrandedoSul,20152018.Dr.WeissandMs.SedmakWeisshaveprimarilylivedandworkedinPortoAlegreandRioGrandedoSulforthepastyear.Dr.Rodriguez,whoisanativeofRiodeJaneiro,currentlyliveswithherhusbandandsoninNewYorkCity,andheractiveparticipationinthisprojecthasbeenthroughfrequenttelephone/SkypeconversationsandemailcorrespondencecombinedwithexcellentInternetbasedresearch.Overthepastyear,Dr.WeissandMs.SedmakWeiss,frequentlyaccompaniedbyRosangelaViegasorVivianAdami,andsometimesbyothercolleaguesfromUnisinosandAGDI,conductedinterviewsandmeetingswithhundredsofpeoplefromgovernment,business,academia,andcivilsocietythroughoutRioGrandedoSul.Duringourresearchprocesswevisited33citiesaroundRS,includingAlvorada,Bag, BentoGonalves, CachoeiradoSul, Cachoeirinha, CampoBom, Canoas,CapodaCanoa,CaxiasdoSul,CruzAlta, Erechim,Gramado,Gravata,Guaba,Iju, Lajeado,NoMeToque,NovaSantaRita, NovoHamburgo,Osrio,PassoFundo,Pelotas,PortoAlegre,RioGrande,SantaCruzdoSul,SantaMaria,SantaRosa,SoJosdoNorte,SoLeopoldo,SoMigueldasMisses,SapucaiadoSul,Triunfo,andViamo.Dr.Weisspresentedadraftofthestatewidestrategy21stCenturyLeapfrogEconomicStrategy:RioGrandedoSulBecomestheMostSustainableandInnovativePlaceinLatinAmericaby2030tothe12thAnnualMeetingofthe28RegionalDevelopmentCouncils(COREDESRS)inSantaCruzdoSulonNovember12,2014,withmorethan100leadersintheaudience,includingseniorRSstategovernmentofficials.This78slidePowerPointpresentationiscurrentlyavailableasafreedownloadablePDFfileonthePublicationspageofGUDswebsite(http://www.globalurban.org/COREDESRS_Presentation_November_2014.pdf),anditisincludedasanintegralpartofthisreport.PartofthisprojectinvolvedDr.WeissconductingfourdaysofprofessionaltrainingonGUDsMetropolitanEconomicStrategy,SustainableInnovation,andInclusive

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ProsperityresearchmethodologyandstrategicpolicyandactionframeworkforUnisinosfacultyandstudents,andforseniorofficialsfromAGDIandotherRSstategovernmentagencies.ThesetrainingsessionstookplaceonApril29andMay23atUnisinosinPortoAlegre,andduringNovember19and20atBRDEinPortoAlegre.AttheNovember1920training,mainlyforAGDIstaff,Dr.WeissspentanentiredayexplaininganddiscussinghisNovember12thCOREDESpresentationinconsiderabledetail.Dr.WeissalsomadetwootherpresentationsduringtheNovember1920training,bothofwhichareavailableonGUDswebsite:MetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperity:MethodologyandHistory(http://www.globalurban.org/AGDI_Training_Presentation_November_2014_Methodology_and_History.pdf)andNoMaandthe4thDistrict(http://www.globalurban.org/NoMa_and_the_4th_District.pdf).TheformerpresentationcoversthehistoricalevolutionandstrategicdetailsofGUDsmethodologyandframework.Thelatterpresentationisacasestudyofthesuccessful1998strategiceconomicdevelopmentplanforWashington,DC,comparingtheinternationallyrecognizedNoMa(NorthofMassachusettsAvenue)initiativetoopportunitiesforapotentialSustainableInnovationZoneinPortoAlegres4thDistrict.Dr.WeissalsopresentedNoMaandthe4thDistrictatacommunitymeetingatNsCoworkinginPortoAlegreonJune9,2014,andataconferenceonurbanplanninganddesignforPortoAlegresFlorestaneighborhood,heldatUnisinosinPortoAlegreonDecember19,2014.

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OVERVIEWOFTHERIOGRANDEDOSUL

21stCENTURYLEAPFROGECONOMICSTRATEGY

Astheglobalpaceoftechnologicalchangehasrapidlyacceleratedoverthelasthalfcentury,andespeciallyduringthepasttwodecades,expertsinbusiness,government,andacademiahaveincreasinglyadoptedtheleapfrogideaforthepotentialfuturegrowthofemergingeconomiesindevelopingcountries.Thisconceptrecognizesthatadvancedtechnologieswillenabletheserisingnationstomorerapidlycatchupandevensurpassthedevelopedworldintermsofmoderninfrastructureandinnovation.Theclassicexampleofamoderntechnologyandinfrastructureleapfrogisintelecommunications.Evenasrecentlyas10yearsagoinmanycountries,mostpeopledidnothaveaccesstotelephoneservicebecausetherewereveryfewlandlines.Today,inmanycases,landlineinfrastructureisnotmuchimproved,butthisisnolongeramajorproblem,becausethevastmajorityofpeoplenowhaveaccesstorelativelyinexpensivemobiletelephonesandwirelessservices.CombiningwirelessmobiletelecommunicationswiththeInternet,andwiththerapidlyincreasingavailabilityofmassivecloudcomputingcapacity,itisnowpossibleforbusinessesofallsizes,evenwithlimitedfinancialresources,toaffordablycompeteinmarketsonaglobalscale,producingandspreadingtechnologicalinnovationsinproducts,processes,andservices,asthecurrentexponentialexplosionofsoftwareapplications(apps)forbillionsofelectronicdevicesclearlydemonstrates.TheMcKinseyGlobalInstitutehighlightsagoodexampleforBrazil:ThegrowthofsmartphonesandthemobileInternetisstriking.Inthe2008survey,virtuallynoonementionedasmartphoneasameansofaccessingtheInternet;by2012,morethan21percentofBrazilianssurveyedciteditasoneoftheirmainmeansofgoingonline.Theexpansionof3GnetworksiscreatingaleapfrogdevelopmentfavoringthemobileInternet,especiallyinurbanareas.(emphasisadded)Similarly,placeswithoutmassiveelectricpowergenerationinfrastructurecanincreasinglyutilizerenewableenergytechnologiessuchassolarandwindpower,withmoredecentralizedandefficientdistributedgenerationandstorage,forsufficientenergytoenabletheirbusinessestocompetegloballyandforInclusiveProsperitytogrowsubstantially.OurproposedLeapfrogEconomicStrategyforRioGrandedoSulrepresentsaninternationalbreakthroughinadvancedtechnologybasedstrategicaction.ThemaingoaloftheLeapfrogEconomicStrategyisforRStodynamicallygeneratemuchhigherandmorebroadbasedeconomicgrowthbybecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030,andoneofthemostsustainableandinnovativeplacesintheentireworld.Thiscuttingedgeapproachisbyfarthebest

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way,andperhapseventheonlyway,tosuccessfullysolvefivekeyeconomicchallengesthestatecurrentlyfaces:

1)Growth2)Productivity3)Demographics4)Competitiveness5)InfrastructureandEducation.

FirstKeyRSEconomicChallenge:GROWTHBrazilranksnumbersevenintheworldinnationalGDP(GrossDomesticProduct),thoughinmeasuringGDPpercapita,Brazilranksamuchlowernumber63amongtheworldsnations,accordingtorecentWorldBankdata.SincethegoalofLeapfrogEconomicStrategyshouldbetogenerateincreasedprosperityandqualityoflifeforeveryperson,andtoimprovethelivelihoodandwellbeingofallfamiliesandcommunities,inthisreportwewilluseGDPpercapitaasakeystatisticalindicatorofeconomicgrowth.RioGrandedoSulisfacingaseriouseconomicgrowthchallenge.PercapitaGDPgrowthaveragedjust2.1percentannuallyfrom2001to2010,andithasdroppedsincethen,withreducedcommoditiesdemand(especiallyfromChina),decliningdebtdrivendomesticconsumption,andslowerworkforcegrowth.Evenduringtheyearsofmorerobusteconomicexpansionthatpeakedin2010,RSlaggedbehindnationaltrends,asBrazilsaverageGDPpercapitagrowthinthoseyearswas2.5percent(duringthosesameyears,Chinawasgrowing11percentannually,Indiamorethan6percent,andChilenearly3percent).Since2003theRSshareofnationalGDPhasdroppedfrom7percentto6.4percent.Despiteitsrecentslowereconomicgrowth,RioGrandedoSulisstilloneofthemostprosperousstatesinBrazil;GDPpercapitainRSremains15percenthigherthanthenationalrate.McKinseyGlobalInstituteforecastsfuturepercapitaGDPgrowthinBraziloverthenexttwodecadestoaveragelessthan2percentannually,basedonprojectedpopulationandproductivityincreases.AccordingtotheRSstategovernmentsFoundationforEconomicsandStatistics(FEE),RioGrandedoSulsestimatedfuturepopulationgrowthisslowerthanmostofBrazil,andthoughrecentproductivitygrowthinRSagricultureiswellaheadoftherestofBrazil,RSlagsbehindaveragenationalproductivitygrowthinindustryandservices.Thereforeitisreasonabletoassume,basedoncurrenttrends,thatRSpercapitaGDPgrowthwillbenomorethan2percentannuallyoverthenext20years.Indeed,evensuchmodesteconomicperformanceisbasedonacontinuingriseinagriculturalproductionandglobaldemand.RecessioninChina,droughtinRS,andmanyotherpotentialsetbackscouldresultinevenslowerstatewideeconomicgrowthinfutureyears.Thismeansthatunderthecurrenttrajectory,RioGrandedoSulseconomymaynotbegrowingfastenougheventostabilizeandprotectthesignificantincomeandemploymentgainssuccessfullyrealizedduringthepastdecade,letalonebeingable

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togeneratesubstantialnewopportunitiesforfutureexpansionofearningsandjobsthatwillbenefitthevastmajorityofthestatespopulation.CurrentlytheRSunemploymentrateisaround5percent,whichisrelativelygood,thoughjobgrowthcouldbemuchstrongerwithanaggressive,forwardlookingLeapfrogEconomicStrategy.TheLeapfrogEconomicStrategyforRStobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030willdoubletheGDPpercapitagrowthrateuptoanaverageof4percentannuallyoverthenext16years,andpotentiallymuchhigher.SustainableInnovationwillimprovetechnologyandresourceefficiencytomakecompaniesandworkersfarmoreproductive,generatinggrowthinwages,salaries,andprofits.Betterquality,morecompetitive,andhighervalueproductsandserviceswillreachnewmarketsandincreasesalesrevenues.TheRSworkforcewillexpandbyreceivinganinfluxofinternationaltalent,andRSinfrastructureandeducationwillattractadditionalprivatesectorandinternationalinvestmentandresources.Thebottomlineisthatthe21stCenturyLeapfrogEconomicStrategyisbyfarthebestwaytogeneratedynamic,rapid,andbroadbasedeconomicgrowthforRioGrandedoSul.Indeed,itistheonlywaythatsuchanambitiousgoalcanrealisticallybeaccomplished.SecondKeyRSEconomicChallenge:PRODUCTIVITYOutputperworker,orproductivity,inRSindustryandserviceslagsbehindBrazilasawhole(thoughRSissignificantlyhigherthanthenationalrateforagriculturalproductivity).BasedonrecentFEEdata,industrialproductivitygrowthinRSfrom2003to2012was1.3percentlowerthantheBraziliannationalaverage.Thisisnotgoodnews,becauseBrazilsproductivityhasbeengrowingonly1.2percentannuallyforthepast25years.Duringthissametimeperiod,productivitygrewannuallyby8.4percentinChina,4.4percentinIndia,and2.6percentinChile.TodayBrazilsoverallrateofproductivityisstillrelativelylowbyglobalstandards.AccordingtotheConferenceBoard,in2013productivityinMexicowasnearlytwiceashighasinBrazil.Rapidlyincreasingproductivityoverthenext16yearsisabsolutelyvitalforRioGrandedoSulspeople,businesses,andcommunitiestobecomemuchmoreprosperous.BecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030willgeneratedramaticimprovementsinoverallproductivityinagriculture,industry,andservices.ThirdKeyRSEconomicChallenge:DEMOGRAPHICSFrom1990to2012,60percentofBrazilsGDPgrowthcamefromamajorexpansionoftheworkforce,bothfromthegrowthoftheworkingagepopulationandfromwomenenteringintopaidemployment(thefemalepercentageoftheworkforce

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rosefrom31percentin1981to45percentin2011).Betweennowand2030,workforcegrowthwilldeclinebytwothirdsrelativetotheprevioustwodecades,becausethebirthrateisdeclining,thepopulationisaging,andwomensworkforceparticipationrateswillincreasemodestly,notexponentially.ThissomewhatchallengingnationalpictureisnotablyexacerbatedforRioGrandedoSul,wherethepopulationandworkforcetrendsarelessfavorable.In2014FEEandDEPLANdocumentedthatthepercentageofthestatespopulationundertheageof15hasbeenfallingsince2000andisprojectedtocontinuedecliningto2030.Theworkingagepopulationbetween15and64yearsoldwillreachitspeakwithinthenextfiveyears,andwillbegintosignificantlydropafter2025whenretirementsstartaccelerating.Further,therateofoutmigrationbyGachoandGachayoungadults(20to35yearsold)tootherBrazilianstatesandothercountrieshasmorethandoubledinthepasttwodecades,andthisdemographictrend,whilestillrelativelymodestinabsolutenumbers,isgrowingfast.TheLeapfrogEconomicStrategyforRStobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030willenableRStoreversetheoutflowoftalentedyoungprofessionals,keepingtheminthestateasproductiveandinnovativeworkersandentrepreneurs.Inaddition,thisstrategywillturnRioGrandedoSulintoaglobalmagnetfortalentedandambitiouspeople,greatlyenhancingboththesizeandqualityoftheoverallworkforce.Finally,totheextentthattheworkforcedoesnotgrowasrapidlyasintherecentpast,thistrendwillbeoffsetbysubstantiallyraisingproductivityperemployedpersonthoughadvancedtechnologies,improvedworkforceskills,andmoreefficientuseandreuseofexistingresources.FourthKeyRSEconomicChallenge:COMPETITIVENESSRioGrandedoSulwasoneofthefirststatesinBraziltoindustrialize,capitalizingonEuropeanmetalmechaniccraftsskillstogeneratemanufacturingindustriesincapitalgoods,agriculturalmachinery/equipment/implements,transportationequipment/motorvehicles/autoparts,shoesandleather,andmuchmore.RSindustrieswereabletoservelargedomesticproducerandconsumermarketsinBrazilastheygrewsubstantiallyinthe20thcentury,particularlysincethe1940s.Brazilsindustrialgrowthwasfueledinpartbythefederalgovernmentspoliciesofhightariffsonimportedgoods,domesticcontentrequirements,andmanyotherkeypolicies,whichhassomewhatdiminishedtheglobalcompetitivenessofmany(thoughnotall)ofBrazilsproducts,asevidencedbyrelativelylimitedexportactivities.Forexample,intheWorldEconomicForumsTheGlobalCompetitivenessReport20142105,Brazilranksnumber140outof144countriesinexports.Brazilstotalexportsarejust12.5percentofitsGDP.Mostofthesearecommoditiessuchassoy,rice,andothergrains,coffee,sugar,meat,fruitandjuices,ethanol,crudeoil,ironore,gold,andotherminerals.Exportsofmanufacturedproductsarefewer,withmuchofitgoingtonearbySouthAmericancountries.

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DuringthepastdecadethesituationhasbecomeevenmoredifficultformanufacturerssincethecommoditiesboomcausedthevalueofBrazilscurrencytorise,makingBrazilsindustrialandconsumergoodsrelativelymoreexpensive.From2005to2012exportsofmanufacturedgoodsfromBrazildeclinedby16percentatthesametimethatcommoditiesexportsweregrowingbynearly30percentannually.In2014BrazilsinternationalmanufacturingtradedeficitexceededUS$50billion,accordingtoFUNCEX.Inadditiontodecliningexports,manyBrazilianproducersarestrugglingwithrisingcompetitionfromagrowingnumberandrangeofimportedproducts,fromfootweartoelectronics.Brazilisgloballycompetitiveinmanyaspectsofagriculture,livestock,andfoodprocessing,andmanyRScompaniesinthesefieldsareincreasinglyactiveinnationalandglobalmarkets.Similarly,EmbraerssuccessinaircraftproductionhaspointedthewaytoglobalmanufacturingcompetitivenessforBrazil,andnumerousRSmanufacturersarethrivinginglobalmarkets,thoughbylocatingproductionfacilitiesinotherstatesandcountries,thepositiveimpactsonemploymentgrowthinRSaremorelimited.ThroughSustainableInnovation,RScanbecomeamajorproducerofadvancedtechnologiesratherthanapurchaserfromelsewhere.GachosshouldbesellingmanylocallyproducedinnovativegoodsandservicestoEurope,EastAsia,NorthAmerica,andotherplaces,insteadofbuyingfromthem.AccordingtoWorldBankdata,lessthan10percentofBrazilstotalannualmanufacturingexportsarehightechnologyproductswithsubstantialR&Dintensity,suchasaerospace,computers,pharmaceuticals,scientificinstruments,andelectricalmachinery.TheLeapfrogEconomicStrategywillenableRSgoodsandservicestobecomemuchmoretechnologicallyadvancedandgloballycompetitive,highlycapableofproducing,marketing,anddistributingproductsthatarebothmoreattractiveandlessexpensiveforpeopleinRioGrandedoSul,inBrazil,andthroughouttheentireworld.FifthKeyRSEconomicChallenge:INFRASTRUCTUREANDEDUCATIONRioGrandedoSulisfortunatetohavebuiltabetterthanaverageinfrastructureforBrazil,alongwithoneofthebesthighereducationsystemsinthecountry.TheseFundamentalAssetshaveservedtheeconomywelloverthepastdecades.However,RSwillonlybeabletoacceleratethepaceofeconomicgrowthinthefutureifbillionsofreaisareinvestedinimprovinginfrastructureandeducationoverthenextdecadeandbeyond.Beingabletoefficientlymovepeople,goods,andinformationwithinthestateaswellastoandfromtherestofBrazilandtheworldisavitaleconomicnecessity.Educatingaproductiveandinnovativeworkforce,andadvancingtechnologiesthroughcuttingedgeresearchanddevelopment,dependsonhighqualityeducationandtrainingatalllevels,fromprekindergartentopostdoctorate.

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TheLeapfrogEconomicStrategywillenableRioGrandedoSultomakemajorprogressoninfrastructureandeducationintwoways:1)becauseoftheambitiousglobalappealoftheSustainableInnovationapproach,RSwillachieveanexcellentcompetitivepositionforattractingsubstantialinternationalinvestmentsandresourcesfromtheprivatesector,fromgovernmentsandinternationalagencies,andfromdonorsandphilanthropists;2)byemphasizingSustainableInnovationbothinprocessesandinresults,RScanLeapfrogdirectlyintofarmoremodernandresourceefficientinfrastructureandeducation,withconsiderablesavingsoncapitalcostsandoperatingexpenses,includingthroughextensiveutilizationofsmartmachinesanddigitaltechnology.(RSinfrastructureandeducationarediscussedinSlides4861below.)WhytheLeapfrogEconomicStrategywillWorkforRioGrandedoSulTheproposedLeapfrogEconomicStrategyforRioGrandedoSultobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030directlyaddressesfivekeyeconomicchallenges:1)theLeapfrogEconomicStrategydoublestheRSeconomicgrowthratetoanaverageof4percentannualpercapitaGDPgrowthover16years;2)theLeapfrogEconomicStrategydramaticallyincreasesproductivitybyupgradingskillsandtechnologies;3)theLeapfrogEconomicStrategyexpandstheworkingagepopulationbyretainingandattractingamoreeducatedandtalentedworkforce;4)theLeapfrogEconomicStrategystrengthensglobalcompetitivenessbyproducingtechnologicallyadvancedandinnovativegoodsandservicesthatcompetemoreeffectivelywithimportsandareingreaterdemandasexports;5)theLeapfrogEconomicStrategyimprovesinfrastructureandeducationbyattractingsubstantialinternationalandprivatesectorinvestments,andbyenhancingresourceefficiency.ThebestpartaboutthisstrategyisthatitmakesfulluseofthetraditionalstrengthsoftheRSeconomy,enablingthemtogrowevenstronger.Themainengineofeconomicgrowthoverthenext16yearswillcontinuetobethemassiveFoodProductionValueChainofRioGrandedoSul,whichrepresentsnearlyonethirdofthestateseconomyintermsofagriculture,livestock,foodprocessing,marketing,distribution,andthemanycloselyrelatedbusinessactivitiesinmanufacturingandservices.Becauseglobalfooddemandwillincrease50percentby2030,theRSFoodProductionValueChainwillhaveevenbetteropportunitiestobetherisingtidethatliftsallboats.Further,thecontinuedgrowthoftheFoodProductionValueChaininRioGrandedoSul,givenitsvitalconnectionswithmetalmechanicandelectricelectronicmanufacturingofcapitalgoods,agriculturalmachinery/equipment/implements,andtransportationequipment/motorvehicles/autopartsinthestate,willbetheKeyDriverofSustainableInnovationinhardwareandsoftware,andinproductionprocesses,products,andservices.ThiswillenabletheRSeconomy,rapidlymodernizingbasedontheacceleratedpaceofitsFoodProductionValueChain,tobecomeaglobalcuttingedgeleaderinAdvancedManufacturing,Precision

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Production,SmartMachines,DigitalTechnology,RenewableEnergy,PrecisionAgriculture,Biotechnology,PrecisionEngineering,CleanTechnology,Polymers,andmanyotheraspectsof21stcenturySustainableInnovation.BuildingfromStrength:Agriculture,Livestock,FoodProcessing,andMetalMechanicManufacturingTheLeapfrogEconomicStrategyisnotintendedtosupplantthemanytraditionalstrengthsofRioGrandedoSulseconomy;infact,itwillbethebestwaytostrengthentheseexistingsectorsandenablethemtogrowevenmorevigorouslyinthefuture.Dr.WeisswasinvolvedfirsthandwiththegrowthofSiliconValleybeginningin1968whenhewasaStanfordUniversitystudent,andespeciallyduring198182whenheservedasDeputyDirectoroftheCaliforniaCommissiononIndustrialInnovation.In1968,agribusinesswasabigpartofCaliforniaseconomy.Today,nearlyahalfcenturylater,agribusinessstillisalargesectorofCaliforniaseconomy,representinginvaluenearly20percentoftotalUSagriculturalproduction.Informationtechnology,telecommunications,andmanyothertechnologiesinSiliconValleyandaroundthestateemergedasawelcomeadditiontoCaliforniastraditionalindustries,notasareplacementofthem.TheNewEconomygrewuptogetherwiththeolderversion,witheachonesupportingandenhancingthecontinuedgrowthoftheother.WhatwastrueforCaliforniaseveraldecadesagoisequallytrueforRioGrandedoSultoday.Agriculture,livestock,foodprocessing,anddistributionwillcontinuetobethemaindriveroftheRSeconomy,especiallybecauseglobaldemandforfoodwillrise50percentby2030.RSiswellpoisedtoprovideasignificantshareofthenecessaryworldfoodsupply,especiallybyimprovingproductivityandyieldsthroughSustainableInnovation,PrecisionAgriculture,Biotechnology,SmartMachines,andDigitalTechnology.AgribusinessinRSpullsalongmanyothermajorindustries,frommachineryandequipment,tobusinessandprofessionalservices,toretailtrade,collectivelyrepresentingnearlyonethirdofthestatesoverallGDP.Inparticular,metalmechanicmanufacturinganditsentirevaluechaininRSiscloselylinkedtoagribusiness.TheexpansionofSustainableInnovationinproductionprocessesandproductswillenabletheseindustriestobecomemuchmoreproductiveandgloballycompetitive.TheMcKinseyGlobalInstitutehighlightsthisimportanteconomicvaluechainrelationshipbetweenagricultureandindustry:Theremovalofprotection,support,andsubsidiesinitiallycauseddistressforBrazilianfarmersandagribusinesses.Buttheyeventuallyrespondedbytakingstepstoboosttheirefficiencyandproductivityandtheirimprovedperformancegeneratedpositivespillovereffectsinotherindustries,includingfertilizerproduction,foodprocessing,andretail.AsBrazilianagriculturehasincorporatedgreateruseofmodernmachinery,productionoftractorsandotheragriculturalequipmenthasquadrupledinthepastthreedecades.Brazil,previouslyanimporter,

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hasbecomeanexporterofthesemachinesinfact,itsexportsoftheseproductshaveincreased24foldsince1970.Brazilianmanufacturersnowproducetractorsthatcanharvestwiderareasandwithgreaterpowerthaneverbefore.ThisisanexampleofcapitalizingonBrazilscomparativeadvantageinresourcestobuildcapabilitiesinadjacentindustries,anareaofpotentialbroaderopportunity.(emphasisadded)GeneratingDynamism:PrecisionProduction,SmartMachines,andDigitalTechnologyThecentralthrustoftheRSLeapfrogEconomicStrategywillbetobecomea21stcenturyleaderinSustainableInnovationbydeveloping,producing,andmarketingaveryadvancedgenerationofPrecisionProduction,SmartMachines,andDigitalTechnology,comprehensivelyappliedtoagriculture,industry,andservices.ThisapproachbuildsonexistingRSassetsandstrengthsinmetalmechanicsandelectricelectronics,fromagriculturalmachinery/equipment/implementsandtransportationequipment/motorvehicles/autoparts,toautomationandcontrols.ItfocusesonhigherproductivitythroughnewmethodsofPrecisionProduction,includingPrecisionAgriculture,whereRioGrandedoSulalreadyisbecominganinternationalleader,andPrecisionEngineering,currentlybeingintroducedintoRSshipyardsconstructingheavydutyoffshoreoilexplorationplatforms,vessels,andequipment.TheemphasisondigitaltechnologyputsRSbusinessesaheadofthecurvefortheinnovationsoftomorrow,includingbothhardwareandsoftwarecomponentsofgoods,services,andproductionprocesses.RScanbecomemoregloballycompetitiveindigitalsoftwarebyeducating,attracting,andretaininghighqualitytalent,whichwillfacilitatefastereconomicandtechnologicalprogressevenbeforemajorimprovementsarecompletedinmoderntransportationmobility,efficientrenewableenergy,andbroadbandtelecommunicationsinfrastructure.ThisstrategymaximizesexistingRSstrengths,evenasitbuildstowardsmuchgreatercapacityforGachostodevelopanduseadvancedtechnologiesoverthenext16years.PrecisionProduction,SmartMachines,andDigitalTechnologyisaprimaryfocusoftheRS2030LeapfrogEconomicStrategy,whichalsoemphasizesmanyotherKeyEconomicDrivers,includingSustainableInnovationinPrecisionAgricultureandBiotechnologyforFood,Health,andEnvironment;AdvancedManufacturingSustainableInnovationTechnologies;PrecisionEngineeringandNaval/OffshoreIndustryValueChain;SustainableInnovationinChemicals,Polymers,andNewMaterials;andGlobalBrandingandMarketinginFashionandDesign,CultureandCreativity,ArtsandTourism,andSportsandEntertainment.AlloftheKeyEconomicDriversarediscussedinSlides3676.

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SustainableInnovationThefocusonSustainableInnovationisvitalforthesuccessoftheLeapfrogEconomicStrategy.Thefutureoftheworldwillbeaboutfindingwaysforbillionsofpeopletoliveandthriveinpeacewitheachotherandinpeacewithnature.Andthegoodnewsisthatinthe21stcentury,people,places,andorganizationscanliterallygetricherbybecominggreenerearningandsavingmoremoneybyconservingandreusingresourcesmuchmoreefficiently.Manyofthemajortechnologicaladvancesofthecomingdecadeswillinvolveenablingpeopletoenjoyeconomicprosperityandqualityoflifeinwaysthatconserveandreusenaturalresourcesandprotectandenhanceglobalecosystems.TheplacesintheworldthatLeapfrogintosuchafuture,assomeplacesalreadyaredoing,willhaveahugeeconomiccompetitiveadvantageovertherestoftheworld.AndthefirstplacesamongemergingeconomiesindevelopingcountriesthatcanaccomplishsuchtechnologicalbreakthroughsdefinitelywillLeapfrogintothefrontranksofglobalcompetitiveness.Thiswillhappenfortwomainreasons.First,becausetheirexpertiseandexperience,reflectedintheirproductsandservices,willbeofenormousvaluetotherestoftheworld,asitwillbetotheirownpeople.Second,becausemanyglobalresourceswillflowtosuchplacesfromelsewhere:talent,technologies,investors,entrepreneurs,students,scholars,traders,tourists,developers,donors,andmuchmore.TheworldhasahugeinterestinsupportingplacescommittedtoSustainableInnovation,andthisgrowinginterestandtheglobalresourcesthatcomewithitwillincreaseexponentiallyduringthecomingdecade.RioGrandedoSulnowhastheopportunity,bycommittingin2015tobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030,toachieveexemplary,highquality,andbroadbasedeconomicgrowthoverthenext16years.Thefollowingreportoutlineskeystrategiesandfeaturesmanydetailedexamplesandopportunities.OneofthemostimportantoftheseisSustainableInnovationZones.SustainableInnovationZones

SustainableInnovationZonesareacenterpieceoftheRS2030LeapfrogEconomicStrategy.Thesemanyspecialareasinmunicipalitiesthroughoutthestatewillbeamongtheleadingcentersforresearchanddevelopmentofnewtechnologies,entrepreneurialstartupsandbusinessincubationandacceleration,stateoftheartmethodsforimprovingsustainabilityandresourceefficiencyinbusinessanddailylife,reducingburdensomerulesandregulationstocreateamorebusinessfriendlyenvironment,establishingpublicprivatecollaborationinstrategicinvestmentsandparticipatoryurbanmanagement,andmuchmore.

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SustainableInnovationZonesinRioGrandedoSulwillbelocatedinmixedusecommunitiesnearcollegesanduniversities,technologyparks,andtechnologybusinessincubators,withcommerce,housing,andotherkeyamenitiesandservices.Theywillbemagnetsforinternationaltalentandexperimentsin21stcenturytechnology.SustainableInnovationsZonesforRSarediscussedinSlides6276.InclusiveProsperityThegoaloftheRSLeapfrogEconomicStrategywillbetodramaticallyimprovethestandardoflivingformanymorepeopleandplacesinRioGrandedoSul,generatinggreaterprosperityandqualityoflifeforGachosandenhancinglivelihoodsandwellbeingforfamiliesandcommunitiesthroughoutthestate.Thisgoalwillbeachievedthroughmuchmoredynamic,rapid,broadbased,andlongtermeconomicgrowthdrivenbySustainableInnovationandInclusiveProsperity.AstheRSLeapfrogEconomicStrategysuccessfullymovesforward,jobsandincomeswillgrowformillionsofpeople,andpublicandprivateresourceswillthenexpandtoenablesubstantialnewinvestmentsincleanerwater,moreeffectivesanitation,betterhousing,andmanyothervitalnecessitiesofinfrastructureandtransportation,healthandeducation,safetyandsecurity,storesandservices,forallincomelevelsstatewide.ThecityofCapeTown,SouthAfricaeloquentlysummarizesthistypeofinclusive,winwinapproach:ItisnotaquestionofchoosingglobalcompetitivenessorthereductionofpovertyCapeTownwillachievebothorneither.Reducingpovertywillstrengthenglobalcompetitiveness,andglobalcompetitivenesswillpermitreductionofpovertythrougheconomicgrowthandjobcreation.TheRSLeapfrogEconomicStrategymaximizeseveryoneseconomiccontributionsbyfullyutilizingtheirtalentsandexpertisethroughproductiveemploymentandcompetitivebusinessopportunities,andbyensuringthatsuchcontributionsarerewardedwithrisingincomesandassetownership.OneofthebestwaystoaccelerateeconomicgrowthinRSistodevelopahighlyproductiveworkforce,bothbyenhancingeducation,skillstraining,andadvancedtechnologiesforthestatesresidentsandinvolvingthemmoreactivelyindynamiceconomicactivities,andbyattractingandretainingenergeticentrepreneursandprofessionalsfromotherstatesandcountries.MovingForwardThisreportoutlinesthebroadconceptsofthe16yearLeapfrogEconomicStrategy,andalsorecommendsinitialkeystepsforRioGrandedoSultomoveforwardalongthepathtobecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030.AstheancientChinesephilosopher,LaoTzu,wiselyobserved,evenverylongjourneysbeginwithjustasinglestep.TheinitialstepsoftheLeapfrogEconomicStrategywillleadtomanyfutureactionsoverthenext16years,includingunexpectedsetbacksandfrequentadjustments,beforefinallyreachingthe2030

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goal.Letsbeginthejourneybytakingthefirststepstogetherin2015,andthenwewillalllearnmuchmoreabouthowthisforwardmovementcanleadRioGrandedoSulinanexcitingneweconomicdirection.

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RIOGRANDEDOSULLEAPFROGECONOMICSTRATEGY

ANDKEYRECOMMENDATIONS

NarrativeforSlide1:ThefollowingsectionextensivelydiscussestheRioGrandedoSulLeapfrogEconomicStrategyforgeneratingfarmoredynamicandbroadbasedlongtermeconomicgrowththroughbecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030.TherationaleforourproposedstrategyisexplainedintheprevioussectionentitledOverviewoftheRioGrandedoSul21stCenturyLeapfrogEconomicStrategy.Pleasereadthepriorsectionbeforeproceedingfurther.ThisnextsectionofourreportonRioGrandedoSulLeapfrogEconomicStrategyandKeyRecommendationsincludes78slidesfromaspeechandslidepresentationthatDr.MarcWeissmadeinSantaCruzdoSulonNovember12,2014totheannualmeetingofthestates28RegionalDevelopmentCouncils(COREDESRS).ThisslidepresentationisavailableonGUDswebsite:(http://www.globalurban.org/COREDESRS_Presentation_November_2014.pdf).Theformatforourreportistodisplayeachslide,followedbyanarrativeexplanationofthekeypoints.InsomecasesthewrittennarrativeismuchlengthierandmoreelaboratethantheNovember12speech,thoughstillexpressingthesamebasicideasandcontent.ThenarrativesinthissectionofthereportalsoincludeInternetlinkstokeypublicationsanddocumentsonGUDswebsiteandother

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internationalwebsitesthatarepicturedintheslidesandmentionedinthewrittennarrativediscussion.Thepresentationisorganizedintwoparts:

PartOneSlides227describesGUDsMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperitymethodologyandframework,explainingthemajorconcepts.Italsocoverstheevolutionofthisframeworksincethe1990s,withkeypublications,articles,andreports,andabriefhistoryofselectedapplicationsintheUSandglobally,includinginBrazilsince2001andinRioGrandedoSulsince2011.PartTwoSlides2876providesaverydetaileddiscussionoftheproposedRSLeapfrogEconomicStrategy.

NarrativeforSlide2:MetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityistheresearchmethodologyandstrategicpolicyandactionframeworkthatGlobalUrbanDevelopmenthasbeenapplyingthroughouttheworldsince2001.Itisoneofthemostadvancedandeffectivestrategiceconomicdevelopmentapproaches,havingproveditsvalueintheUSsincethe1970sand80sinCaliforniaandthe1990sinWashington,DCandBaltimore,Maryland,amongotherplaces.Since2001ithasbeenadoptedinvariousformsbytheUN,WorldBank,OECD,InterAmerican

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DevelopmentBank,andmanyotherinternationalorganizations,andhasbeenappliedinmanycountries,includingAustralia,Brazil,Canada,China,CzechRepublic,India,Singapore,SouthAfrica,Spain,Sweden,UK,US,andVirginIslands.Theimageinthisslideisfroma2006articlebyDr.MarcWeissintheHarvardEconomicsReview(http://www.globalurban.org/Harvard_MES_article.pdf).

NarrativeforSlide3:MetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityisdesignedtobefullyalignedwithfiveofthemostimportanteconomictrendsofthe21stcentury,thatdynamiceconomicgrowthanddevelopmentisincreasingly:1)knowledgeandinformationbased;2)technologyandcommunicationsintensive;3)urbanandpeoplecentered;4)resourceefficientandsustainable;and5)globallyoriented.ForBrazil,includingRioGrandedoSul,aligningwiththesevitaltrendswillinvolvesomewhatofaparadigmshift.Traditionally,Brazilswealthhasbeenbasedonawidevarietyofrelativelyabundantnaturalresources,andtheseresourcesgenerallyhavebeenregardedasbeingevenmorevaluablethanpeopleasproductiveworkers.RSsuccessinaccomplishingtheLeapfrogEconomicStrategywillinvolverecognizingthatinthe21stcentury,peoplearebecomingtheworldsmostvaluableeconomicasset.

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Also,becauseBrazilissorichinmultipleresources,theseresourcesoftenhavebeenusedwithconsiderableinefficiencyandwaste.Inthefuture,itwillbenecessaryforRStobecomemorefrugalandefficientinconservingandreusingresources,astherecentwatershortageinmanypartsofBrazilpainfullyremindsus.Finally,thoughBrazilhasbeensignificantlyinwardfocusedformuchofitshistory,throughtheLeapfrogEconomicStrategyRSwillbecomeincreasinglyinternationalized,welcomingmanytalentedandinnovativepeoplefromaroundtheworld,andengaginginmoreextensiveeconomic,social,andculturalrelationshipsglobally.

NarrativeforSlide4:MetropolitanEconomicStrategyisbasedonfourkeypillars:urbanandregionaldevelopment;innovation;sustainability;andinclusiveness.GUDcombinesthesefourpillarstogetherintooneunifiedapproach,becauseitisthebestwayinthe21stcenturytogeneratedynamicandrapidlyacceleratingprosperityandqualityoflifeforeveryfamilyandcommunity.Dr.MarcWeisshasbeenaleadingexpertontechnologicalinnovationandeconomicdevelopmentsinceheservedduring198182asDeputyDirectoroftheCaliforniaCommissiononIndustrialInnovation(CCII),establishedbyGovernorJerryBrown.TheCommissionsCoChairswereDavidPackard,cofounderofHewlettPackard

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(HP),andSteveJobs,Applescofounder.(http://www.globalurban.org/State_and_Local_Innovation.pdf).Withrespecttourbanandregionaldevelopment,Dr.WeissisthecoauthoroftheworldsbestsellingEnglishlanguageuniversitytextbookonpropertydevelopment,publishedbytheUrbanLandInstitute(RealEstateDevelopmentPrinciplesandProcess,Washington,DC:ULI,4thedition,2007),andheisauthorofalandmarkstudyofthemajorroleoftheprivatesectorinurbanandregionaldevelopment,TheRiseoftheCommunityBuilders:TheAmericanRealEstateIndustryandUrbanLandPlanning(NewYork:ColumbiaUniversityPress,1987).ThroughSustainableInnovation,people,places,andorganizationscanliterallygetricherbybecominggreenerearningandsavingmoremoneybyconservingandreusingresourcesmoreefficiently(http://www.globalurban.org/Green_Capitalism.pdf).InclusiveProsperityisdesignedtoenableeverypersonandcommunitybothtocontributetheirmostinnovativesolutionsandtofullybenefitfromtheexpandedprosperityandenhancedqualityoflifethatpeoplecreatetogether(http://www.globalurban.org/Community_Productivity_Project_Proposal.pdf).

NarrativeforSlide5:

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MetropolitanEconomicStrategyfocusesoncitiesandurbanregionsasdynamicenginesofeconomicgrowthforstates,provinces,andnations,includingRioGrandedoSul,becauseurbanregionsarethemosteconomicallyproductivegeographicunitsintheworldtoday(http://www.globalurban.org/Issue1PIMag05/Weiss%20PDF.pdf).ThisclassicgraphbasedonWorldBankdataclearlydemonstratesthatineverycountryworldwide,urbanregionsgeneratemorethanhalfofthenationalincome.Thesepercentagesrangefromanaverageof55percentinlowincomecountries,allthewayuptoanaverageof85percentinhighincomecountries.Whatismorenoteworthyaboutthesestatisticsisthatineverycasethepercentageofnationalincomegeneratedbyurbanareasexceedsthepercentageshareofthenationalpopulationthatisurbanized.Thisshowsthaturbanareasarehigherineconomicproductivitythanruralareas,eveninplacesthatarerichinnaturalresourceslikeBrazil.Inthecaseoflowincomedevelopingcountrieswhereurbanareasaccountforanaverageof55percentofthenationalincome,theurbanshareofthepopulationaverages32percent.Inmiddleincomecountries,theurbanshareofnationalincomeaverages73percent, andtheurbanshareofthepopulationaverages50percent.Forhighincomecountries,theaverageurbancontributiontonationalincomeis85percent,yettheurbanproportionofthenationalpopulationis79percent.Thisshowsthatthegreaterthelevelofurbanizationinanation,thehigherisitslevelofprosperity, andconversely,themoreprosperousacountryis,themoreurbanizeditis.

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NarrativeforSlide6:AstheglobalWorldBankdatainslide5shows,urbanregionsaremoreeconomicallyproductive.Theyalsoarethemajorsourcesofinnovation.Why?Becausetheyhavelotsofpeoplesmart,talented,hardworking,energetic,creative,innovativewithaverywiderangeofknowledge,education,andexperienceandwithmanydiverse,advanced,andspecializedskills.Mixthemalltogetherinonelargeplace,withtherightentrepreneurialincentivesandlivelihoodopportunities,andyougetadynamic,fastgrowingeconomy.Thisisespeciallytruewhenyouputthosetalentedandmotivatedworkerstogetherwithgoodinfrastructureandinstitutions,withextensivevaluechainsanddistributionnetworks,andwithlargemarkets.

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NarrativeforSlide7:MetropolitanEconomicStrategyisbasedontwocorestrategicideas:thefirstisBuildingfromStrength.Likegoodsportsteams,placesbecomemorecompetitivebystrategicallyemphasizingandeffectivelyemployingthebestfeaturesoftheirpeopleandplaces.ByidentifyingthemostimportantFundamentalAssets,placescanstrategicallyinvestinstrengthening,improving,andexpandingtheminordertobecomemoreinnovative,productive,andgloballycompetitive.TheseFundamentalAssetsthenbecomethefoundationforthesecondcorestrategicidea:GeneratingDynamismthroughthegrowthofthrivingIndustryNetworkswhoseproductiveactivitiesleadtorisingincomesandtomoreandbetterjobs.TakingactiontostrengthenFundamentalAssetsisavitalprerequisiteforgrowingdynamicIndustryNetworks(alsocalledindustryclusters).

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NarrativeforSlide8:FundamentalAssetsarethebigimportantthingsthatenabledailylifetofunctionwell,suchastransportationandinfrastructure.Foraneconomytobeinnovativeandproductive,investinginresearchandtechnology,educationandworkforcedevelopment,andmanyotherkeyassets,isessential.Thoughphysicalassetsarebothnecessaryandvaluable,themostimportanteconomicassetinthe21stcenturyispeople.Placesneedmanytalented,skilled,andmotivatedpeopletobeeconomicallydynamic,asthecontinuedsuccessofSiliconValleyconstantlyremindsus.Inorderforplacestocompeteandgrow,theymustfirsteducatealargeandtalentedworkforce,andretainthem,andtheyalsoneedtoattractandretainmanytalentedpeoplefromelsewhere.Sinceskilledpeopleoftencanchoosewheretheywanttoliveandwork,itisnecessarytocreateandsustainahighqualityoflifeinordertoattractandretaintheskilledworkforcenecessaryfordynamiceconomicgrowth.Anythingcanbeseenaseitheranassetoraliability,dependingonthestrategicviewpoint.WhenApplewasindeepfinancialtrouble,thegeneralmarketopinionwasthatithadthreebigproblems:1)anexpensiveproduct;2)aclosedoperatingsystem;and3)asmallmarketshare.ThenSteveJobsreturnedtorescuethecompanyhehadfounded,andhedeclaredthatthosethreeproblemswereactuallymajoradvantages,comparingAppletoMercedesBenzandBMW.Weallknowhowwellhisbusinessstrategysucceeded.Soitisimportanttorecognizethatthingsnotgenerallyseenaseconomicsuchasculture,orhealth,andmanyotheraspectsof

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life,canpotentiallybeFundamentalAssetsforgeneratingbusinesses,jobs,revenues,products,andservices.

NarrativeforSlide9:This2002GUDreportfortheNationalGovernorsAssociationintheUS(theNGArepresentsthe50stategovernors)isadetailedexplanationofhowastategovernmentcanapplytheMetropolitanEconomicStrategyframeworktogenerateinnovationandprosperity.In2011,Dr.MauroBorgesLemos,PresidentoftheBrazilianAgencyforIndustrialDevelopment(ABDI)inBraslia,believedthatGUDsapproachcouldsuccessfullybeappliedineverystateinBrazil,startingwithRioGrandedoSul.StatePolicyApproachestoPromoteMetropolitanEconomicStrategyisanimportantdocumentfromtheUS(http://www.globalurban.org/National_Governors_Association_Report__State_Policy_Approaches_to_Promote_Metropolitan_Economic_Strategy.pdf).ThisNGAreportshedslightonsomeaspectsofourapproachforRioGrandedoSul,thoughwehavesignificantlyadaptedittoincludecustomdesignedGachoandBrazilianperspectives.

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NarrativeforSlide10:MetropolitanEconomicStrategybecameaUSnationalpolicyin1996underPresidentClinton.Dr.MarcWeisscoordinatedanddevelopedthisnewpolicywhileservingasSpecialAssistanttoHousingandUrbanDevelopment(HUD)SecretaryHenryCisneros.InadditiontoHUD,manyotheragencieswereinvolved,includingthePresidentsCouncilonSustainableDevelopment,theUSDepartmentofCommerceEconomicDevelopmentAdministration,andtheWhiteHouseNationalEconomicCouncil.Thepolicywasdescribedintwomajorreports,AmericasNewEconomyandtheChallengeoftheCities:AHUDReportonMetropolitanEconomicStrategy,in1996(http://www.globalurban.org/Portland_Metropolitan_Economic_Strategy_Report.pdf),andComebackCommunities:TheRevivalofAmericasCities,in1997(http://www.globalurban.org/Comeback_Communities.pdf),aswellasinseveralarticleswrittenbyHenryCisnerosandMarcWeiss,includingTheWealthofRegionsandtheChallengeofCitiesin1997(http://www.globalurban.org/The_Wealth_of_Regions_and_the_Challenge_of_Cities.pdf),andMetropolitanEconomicStrategyforAmericasCitiesandRegionsin1999,whichisagoodsummaryofour1996HUDreport(http://www.globalurban.org/Metropolitan_Economic_Strategy_for_America's_Cities_and_Regions.pdf).

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NarrativeforSlide11:AfterMetropolitanEconomicStrategybecameaUSnationalpolicyin1996,thefollowingyearHUDdecidedtoapplythisstrategicpolicyandactionframeworkinmetropolitanBaltimorebyworkingwiththeregionsgovernment,business,andcivicleaders(includingtheBaltimoreMetropolitanCouncilandtheGreaterBaltimoreCommittee)toproduceamajorstrategicreportdiscussedextensivelyatalargeregionalleadershipconferenceinMay1997.HUDsBaltimoreMetropolitanEconomicStrategyReport,ACommunityViewitsFuture:CivicLeadersStrategiesforEconomicProsperityandQualityofLifeinthe21stCentury,writtenbyDr.MarcWeissandMatthewWeinstein,withexcellentresearchassistancefromanICFInternationalconsultingteam,becameamodelforhowtoapplythisnewapproachinUSregions,andlaterthroughGUD,inmanyothercountries(http://www.globalurban.org/A_Community_Views_Its_Future.pdf).The1997metropolitanBaltimorereport,combinedwiththe1999BaltimoreEconomicGrowthStrategythatDr.MarcWeissandDanielRosanproducedfortheBaltimorecitygovernment,BaltimoreDevelopmentCorporation,andCenterforNationalPolicy(http://www.globalurban.org/Baltimore_Economic_Strategy.pdf),hadagenuinelypositiveimpactinhelpingshapeeconomicdevelopmentinthecityandregionoverthefollowingdecade.

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NarrativeforSlide12:HUDSecretaryAndrewCuomo,whosucceededHenryCisnerosin1997,wasanenthusiasticsupporterofMetropolitanEconomicStrategy.ThisisanexcerptfromhisPrefacetoHUDs1997metropolitanBaltimorereport.AndrewCuomolaterwaselectedGovernorofNewYorkstatein2010andreelectedin2014.Since2011,GovernorCuomohascreated10RegionalEconomicDevelopmentCouncils,whichtogetherwithStartUpNewYorkandotherinitiatives,arebasedontheMetropolitanEconomicStrategyframeworkthathehelpeddevelopasHUDSecretaryinthelate1990s.

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NarrativeforSlide13:AftertheMay1997metropolitanBaltimoreconferenceandreport,HUDSecretaryCuomoencouragedDr.MarcWeisstotakeonabiggerchallenge:toapplyMetropolitanEconomicStrategyinWashington,DC.TheDistrictofColumbiagovernmentwasinconsiderablefiscalstress,andwastemporarilybeinggovernedbythePresidentandCongressthroughtheFinancialResponsibilityandManagementAssistanceAuthority(ControlBoard).InAugust1997theUSCongresspassedandPresidentClintonsignedtheNationalCapitalRevitalizationAct,whichamongotherthingsmandatedthatWashington,DCproduceaprivatesectororientedstrategiceconomicdevelopmentplan.Dr.MarcWeisswasappointedtocoordinatethedevelopmentofthisstrategicplan,whichinNovember1998,atamajorEconomicSummithostedbytheWorldBank,waspublishedasTheEconomicResurgenceofWashington,DC:CitizensPlanforProsperityinthe21stCentury(http://www.globalurban.org/The_Economic_Resurgence_of_Washington,_DC.pdf).InadditiontotheUSandDCgovernments,theplanwascosponsoredandpartlyfundedbyseveralotherorganizations,includingFannieMae(homemortgagefinancecorporation),LocalInitiativesSupportCorporation(LISCpromotesinclusivecommunitydevelopment),andtheWorldBank,makingitatruepublicprivatecivicpartnership.Largenumbersofpeopleactivelyparticipatedincreatingandimplementingthisstrategyandits40keyactions,whichsucceededinturningwhathadbeenanailingurbaneconomyintoadynamicgrowthenginethatcontinuestothriveandprosper17yearslater.Byallaccounts,theWashington,DCstrategicplan

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wasoneofthemostsuccessfulurbaneconomicdevelopmentinitiativesintheUSoverthepasttwodecades,anditclearlydemonstratedtheeffectivenessoftheMetropolitanEconomicStrategyframework.MetropolitanEconomicStrategyisbasedontheprincipleofInclusiveProsperity:encouragingactiveandextensivecitizen/stakeholderinvolvementandpromotingbroadparticipationineconomicallyproductiveactivitiessuchthateveryonehasanopportunitytocontributetoandbenefitfromemploymentandincomegrowth.Theexcellentresultsofthe1998Washington,DCstrategicplanarestrongproofoftheeconomicvalueofinclusiveness.

NarrativeforSlide14:AkeypartoftheMetropolitanEconomicStrategyframeworkthatwascentraltothe1998Washington,DCplanwasthethreepartapproachfocusingonStrategicIndustries,StrategicPopulations,andStrategicAreas,addressingthedynamicinterrelationshipsbetweenbusinesses,people,andplaces.Thisisoneofthekeyfeaturesthatmadetheplansocomprehensiveinscopeandconcept,yetveryfocusedonimplementingstrategicactions.UnderStrategicPopulations,weinnovativelyemphasizedthatattractingandretainingresidentswasjustasimportantasattractingandretainingbusinesses,becausetalentedandskilledpeopleareavitaleconomicasset.

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TheWashington,DCstrategytargetedsixIndustryNetworksthatweidentifiedandtargetedasthemaingeneratorsofbusiness,employment,andincomegrowthforthecityandthemetropolitanregion:

Business/Professional/Financial/AssociationServices; Hospitality/Entertainment/Tourism/SpecialtyRetail; Universities/Educational/ResearchInstitutions; BiomedicalResearch/HealthServices; Media/Publications; InformationTechnology/Telecommunications.

Thesechoiceswereveryspecific,reflectingtherealitythateveryplaceisdifferentintermsofitsFundamentalAssets,andthedynamicIndustryNetworksmustrepresentsuchdiversitybetweenoneplaceandanother.Forexample,AssociationServicesisamajorindustryonlyinnationalcapitalcitieslikeBraslia.Eachstrategy,therefore,mustbecustomizedtofituniquelydistinctpopulationsandlocations.OurproposedstrategyforRioGrandedoSulisentirelyinthatspirit.

NarrativeforSlide15:The1998Washington,DCeconomicstrategywasamajorsuccess,withtransformationalimpactsonmanypartsofthecity,includingdowntown,ColumbiaHeights,theSoutheast/SouthwestWaterfront,Anacostia,andmuchmore.Oneof

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themostnotableaccomplishmentswasthedramaticregenerationofanareaneartheEastEndofdowntownandextendingbehindUnionStation,siteofthemainAmtraktrainterminal.ThisareaisnowcalledNoMa(NorthofMassachusettsAvenue),anamethatwasinventedinJune1998aspartoftheinitiative,tobringanewimagetoadeterioratedareafullofvacantlandandabandonedbuildings,withoutaclearculturalidentity.ThenewnamewasintendedtodrawcomparisonswithSoHoandTriBeCainNewYorkCity,whichhadbecomeattractiveandvibrantneighborhoodsbyredevelopingdecayingindustrialloftbuildings.The1998WashingtonstrategicplanincludedtwokeyactionsdirectlyfocusedonNoMa:Action26DevelopNoMaasaTechnology,Media,Housing,andArtsDistrict;andAction29BuildaMetroStationatNewYorkAvenuetoSpurDevelopment.Whenwestartedin1997,allofthisseemedquiteimpossible.Yettoday,preciselyasthestrategyenvisioned,thereisafastgrowingandthrivingmixeduseneighborhoodanchoredbythenewNoMaMetroStation(financedbyaveryinnovativepublicprivatepartnership),withaprojectedtotalofUS$9billioninnewinvestmentanddevelopmentatfullbuildout,generatingmorethan40,000jobsandattractingover12,000newresidents.

NarrativeforSlide16:AdecadeafterthelaunchingofNoMa,theOrganizationforEconomicCooperationandDevelopment(OECD)inParis,whichrepresents34middleincomeandhigh

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incomecountries,wasaskedbythegovernmentofWalesintheUKtoidentifythe12mostimpressiveeconomicdevelopmentinitiativesworldwidethatcouldpotentiallybeappliedinWales.TheOECDchoseNoMaaspartofthisselectgroup,andthencommissionedGUDtowriteabriefreportsummarizingtheprocessandresultsinNoMaasof2008.ThisreportisthedefinitiveanalysisofhowandwhytheNoMainitiativesucceeded(http://www.globalurban.org/GUD_OECD_NoMa_Report.pdf).

NarrativeforSlide17:GUDs2008NoMareportisavailableinPortugueseonthePublicationspageofGUDswebsite(http://www.globalurban.org/GUD_OECD_NoMa_Report_in_Portuguese.pdf).

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NarrativeforSlide18:These12lessonsarekeyinsightsforstrategicpolicyandactionintheMetropolitanEconomicStrategyframework,particularlydrawnfromtheBaltimoreandWashington,DCexperiences.Dr.MarcWeissoriginallyputthislisttogetherin2006foratwodaytrainingonLocalEconomicDevelopmentforseniorfieldofficersattheUSAgencyforInternationalDevelopment(USAID)inWashington,DC.Morerecently,Dr.WeissteachesthesekeylessonsaspartofhisgraduatecourseonGlobalUrbanPolicyandDevelopmentintheSchoolofInternationalandPublicAffairsatColumbiaUniversity.(http://www.globalurban.org/2013_GUD_Columbia_University_Course.pdf).

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NarrativeforSlide19:Since2001,GUDhasbeenglobalizingMetropolitanEconomicStrategy,applyingitinmanycountries,includingBrazil.Forexample,in2004GUDproducedaCuritibaMetropolitanEconomicStrategyReport(http://www.globalurban.org/GUD_Curitiba_MES_Report.pdf).GUDhasbeenactivelyinvolvedinCuritibaoverthepastdecade.JaimeLerner,formerMayorofCuritiba,formerGovernorofParan,formerPresidentoftheInternationalUnionofArchitects,andplanner/designerofPortoAlegreswaterfrontredevelopment,isaViceChairofGUD.RodrigoLoures,founderandPresidentofNutrimentalCorporation,formerPresidentoftheFederationofIndustriesoftheStateofParan(FIEP),currentVicePresidentoftheNationalConfederationofIndustry(CNI),andcofounderoftheBrazilianFoundationforSustainableDevelopment(FBDS),isamemberofGUDsBoardofDirectors.

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NarrativeforSlide20:GUDhasbeenontheforefrontofpromotingMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityasoneofthebestwaysfordevelopingcountriestofostereconomicgrowththatisinnovative,sustainable,andinclusive.Asasolutiontotheworldwiderisksandpotentialdangersofcatastrophicclimatechangeandotherpotentialenvironmentalcrises,GUDcollaboratedwiththeUnitedNationsin2009todevelopmenttheGlobalClimateProsperityAgreement,encouragingtheprivatesectortomakesubstantialforprofitinvestmentsinrenewableenergyandcleantechnologyproductsandinfrastructureinBrazilandmanyotheremergingmarkets(http://www.globalurban.org/Global_Climate_Prosperity_Agreement__The_One_Trillion_Dollar_Deal.pdf;http://www.globalurban.org/Global_Climate_Prosperity_Scoreboard_Media_Release_12409.pdf;http://www.globalurban.org/Frequently_Asked_Questions_by_Potential_Investors_about_the_Global_Climate_Prosperity_Agreement.pdf).WebelievethatthisapproachwillprovetobeverysuccessfulinenablingRioGrandedoSulsLeapfrogEconomicStrategytosuccessfullygenerateamoredynamicandfastergrowingeconomythroughbecomingthemostsustainableandinnovativeplaceinLatinAmericaby2030.

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NarrativeforSlide21:Beginningin2010,GlobalUrbanDevelopmentbeganworkingwiththeBrazilandUSgovernmentsthroughtheEnergyandClimatePartnershipoftheAmericas(ECPA).GUDhelpedECPAorganizetheworldsfirstinternationalconferenceonSustainableEconomicDevelopment,hostedbythecityofCuritibainJune2011(http://www.globalurban.org/ECPA_Conference_Agenda.pdf).Thisconference,whichdrewonrecentexperienceintheUS,Brazil,andotherLatinAmericancountries,substantiallycontributedtoadvancingtheSustainableInnovationelementsoftheMetropolitanEconomicStrategyframework.

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NarrativeforSlide22:GUDsSustainableEconomicDevelopment/SustainableInnovationstrategiesarestateoftheartglobally,basedontheconceptofgettingricherbybecominggreenerandourfourpartstrategicframework:GreenSavings,GreenOpportunities,GreenTalent,andGreenPlaces(http://www.globalurban.org/Green_Capitalism.pdf;http://www.globalurban.org/Sustainable_Economic_Development_Strategies.pdf;http://www.globalurban.org/AMCHAM_BRASIL_August_2014.pdf).GUDhasbeenontheforefrontofrecentadvancedapproachesintheUS.GUDs2011report,ProsperityinParadise:GrowingtheSustainableEconomyinSarasotaCounty,fundedbytheUSDepartmentofEnergyandtheSarasotaCountygovernment,setanewstandardforthistypeofstrategy(http://www.globalurban.org/Sarasota_County_Strategic_Recommendations_Report.pdf),asdidthepathbreaking2009reportbytheSiliconValleyClimateProsperityCouncil,ClimateProsperity:AGreenprintforSiliconValley,inwhichGUDprovidedvitalstrategicadvice(http://www.globalurban.org/Silicon_Valley_Climate_Prosperity_Strategy.pdf).Similarly,since2007GUDhasbeenadvisingandworkingwithSanJose (http://www.globalurban.org/San_Jose_ECPA_Curitiba_Presentation.pdf),SanAntonio(http://www.globalurban.org/San_Antonio_ECPA_Curitiba_Presentation.pdf),

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Denver(http://www.globalurban.org/Denver_Business_Journal_Climate_Prosperity_article.pdf;http://www.globalurban.org/GUD_Denver_Seeds_Best_Practices_Report.pdf),metropolitanPortland(http://www.globalurban.org/Portland_ECPA_Curitiba_Presentation.pdf),southwestFlorida(http://www.globalurban.org/Southwest_Florida_Climate_Prosperity_Strategy.pdf),andthestateofDelaware(http://www.globalurban.org/Delaware_ECPA_Curitiba_Presentation.pdf;http://www.globalurban.org/Delaware_Climate_Prosperity_Media_Release_2_16_09.pdf),amongothers.

NarrativeforSlide23:GUDsworkinBrazilshifteditsfocusfromCuritibaandSoPaulotoMinasGeraisandRioGrandedoSulduring2011and2012,connectedtothenationaladvisoryworkGUDwasdoingfortheBrazilianAgencyforIndustrialDevelopment(ABDI).InSeptember2012GUDorganizedamajorNetworkingEventonMetropolitanEconomicStrategyandSustainableEconomicDevelopmentinBrazilattheUNWorldUrbanForuminNaples,Italy,withAGDIPresidentMarcusCoesterasthefeaturedspeakerfromRioGrandedoSul(http://www.globalurban.org/Metropolitan_Economic_Strategy_and_Sustainable_Economic_Development_in_Brazil.pdf;http://www.globalurban.org/UN_Rio_Grande_do_Sul_Presentation.pdf).

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NarrativeforSlide24:In2011and2012,GUDworkedwiththeFederationofIndustriesofthestateofMinasGerais(FIEMG)andtheMinasGeraisstategovernmenttoapplytheMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityframeworkasacatalystforgeneratingamoredynamicandtechnologicallyinnovativeeconomy.InOctober2012,GUDcompletedamajorreport,AdvancedManufacturingandSustainableInnovation:TheThirdWaveofIndustrialandUrbanEconomicGrowthforMinasGerais(http://www.globalurban.org/Advanced_Manufacturing_and_Sustainable_Innovation__Economic_Growth_for_Minas_Gerais.pdf).

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NarrativeforSlide25:GUDs2012MinasGeraisreportforFIEMGisavailableinPortugueseonthePublicationspageofGUDswebsite:(http://www.globalurban.org/Manufatura_Avancada_e_Inovacao_Sustentavel_em_Minas_Gerais.pdf).

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NarrativeforSlide26:During2011and2012,GUDworkedwithFIERGS,AGDI,andtheM.StorttiBusinessConsultingGrouponstudyingtheNaval/OffshoreIndustryinRioGrande,Pelotas,SoJosdoNorte,andthesurroundingregion,andrecommendingwaystousethecontractstobuildships,platformsandheavydrillingequipmentforoffshoreoilexplorationandextraction,andrelatedinvestmentsinshipyardimprovements,toupgradetechnology,infrastructure,andworkforceskillsandgeneratemorediversifiedlongtermsustainableeconomicgrowth.InDecember2012GUDproducedareport,LocalandRegionalEconomicDevelopmentOpportunitiesRelatedtotheImplementationoftheSoJosdoNorteEBRShipyardinRioGrandedoSul(http://www.globalurban.org/Local_and_Regional_Economic_Development_Opportunities_Related_to_the_Implementation_of_the_Sao_Jose_do_Norte_EBR_Shipyard_in_Rio_Grande_do_Sul.pdf).ThisreportisanexcellentexampleofhowGUDisapplyingourMetropolitanEconomicStrategy,SustainableInnovation,andInclusiveProsperityframeworkforRioGrandedoSul.GUDemphasizesfourkeyareasofeconomicopportunitiesforSoJosdoNorte,aswellasforRioGrande,Pelotas,andthesurroundingregion:1)CommercialFishing(especiallyartisanalcooperatives);2)Tourism,Culture,andCreativeIndustries(includingaCenterforGachoMaritimeCulture);3)WindPowerandGreenTechnologies;and4)ZeroWasteandCleanTechnologyIndustries.Since2013GUDhasbeenworkingwiththecityofRioGrandeandtheRioGrandeRegionalNaval/OffshoreIndustryNetwork(PoloNavaleOffshoredeRioGrandeeEntornoAPL)toimplementkeyaspectsofour2012report.

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NarrativeforSlide27:GUDs2012reportforFIERGS/AGDI/StorttiisavailableinPortugueseonGUDswebsite(http://www.globalurban.org/Oportunidades_de_Desenvolvimento_Local_e_Regional_Relacionados_a_Implementacao_do_Estaleiro_EBR_de_Sao_Jose_do_Norte.pdf).

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NarrativeforSlide28:Aspreviouslymentionedinthisreport,RioGrandedoSulisatacrossroads.Thecurrenteconomicgrowthpathwillyield,atbest,modestgrowth,duetotheongoingstrengthofagribusinessanditslongFoodProductionValueChain,includingmachinery/equipment/implements,logistics,services.Thisslowandstable,thoughsomewhatcyclicalgrowthwilltakeplaceinthecontextofadecliningworkingagepopulationandagradualreductioninseveralmajorindustries.Thealternativepathisafastgrowingeconomythatiscreatingmanynewjobs,businessopportunities,andrisingincomesacrossthestate,benefitinglargenumbersofpeopleineveryregion.Inordertoaccomplishtheseresults,RioGrandedoSulwillneedtomovebeyondbusinessasusualandenthusiasticallypursueaworldclasstransformationalstrategyoverthenext16years.ThisLeapfrogEconomicStrategyisforRStobecomethemostsustainableandmostinnovativeplaceinLatinAmericaby2030.VigorouslymovingforwardwiththisstrategywillenableRStomodernizeagricultureandlivestock,foodprocessing,anddistribution,andthewiderangeofrelatedmetalmechanicandelectricelectronicindustryvaluechains,inagriculturalmachinery/equipment/implements,transportationequipment/motorvehicles/autoparts,retailing,businessandprofessionalservices,andmanyotherkeyindustrynetworks.Atthesametime,inordertoaccomplishSustainableInnovationinthesefieldsthatareattheheartoftheRSeconomy,itwillbevitallynecessarytogeneratenewadvancedskillsinmanufacturing,information/digitaltechnology(especiallysoftware),telecommunications,andnumerousotherfields.

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Theenergeticpursuitofupgradingskills,technologies,andinfrastructureinordertobecomehighlyinnovativeandsustainable,particularlyintermsofresourceefficiency,willenableRSagriculture,industry,andservicestobecomemuchmoreproductiveandgloballycompetitiveincreasingrevenuesandmarketshare,expandinginvestmentandemploymentthatwillenableRioGrandedoSultoLeapfrogintothefrontranksoftechnologicallyadvancedcountriesworldwide.Thefutureofinnovationandtechnologyisaboutsustainability,andbymovingtobecomeLatinAmericasleader,RSalsocanbecomeaworldleader.ItwillbethebestwaytoretainfuturegenerationsoftalentedGachosandGachas,andbecomeamagnetforattractingandretainingtoptalentfromthroughoutBrazilandtheentireworld.TheyoungGachodiasporaintheUS,Europe,Australia,andotherplaceswillbeenthusiasticaboutreturninghometoRS.Atthesametime,Americans,Europeans,Australians,andpeoplefrommanyotherplaceswillwanttotraveltoRSfortourism,education,working,andliving,asskilledprofessionals,entrepreneurs,andinvestors,thusreversingthecurrentoutflowandcreatingadynamicnewpopulationinflowbenefitingRioGrandedoSul.

NarrativeforSlide29:IndevelopingthestatewideLeapfrogEconomicStrategyforRioGrandedoSultobecomethemostsustainableandinnovativeplaceinLatinAmericaby2030,weconducteddetailedresearchandsitevisitsfor33citiesandninefunctionalregions.TheRSstategovernmenthasdividedthestateintoninefunctionalregions,as

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illustratedinthemaponSlide29.WehavebenefitedfromresearchanddatarelatedtothenineregionscompiledbySEPLANandotheragencies.Duringourvarioussitevisitswevisitedallnineofthestatesregions,andincorporatedtheirperspectivesintoourproposedstrategy.Whilesomeissuesparticularlyapplytosomeregionsmorethanothers,suchasshipyardsinRegion5orwineriesinRegion3,themainelementsoftheLeapfrogEconomicStrategyaredirectlyapplicabletoallnineRSregionsandtoall497municipalitieswithinthosenineregions:

Region1:70municipalities; Region2:59municipalities; Region3:49municipalities; Region4:21municipalities; Region5:22municipalities; Region6:20municipalities; Region7:77municipalities; Region8:49municipalities;and Region9:130municipalities.

NarrativeforSlide30:RioGrandedoSulhascreatedavaluableinstitutionforstrategiceconomicdevelopmentplanning:the28RegionalDevelopmentCouncils,orCOREDES,as

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showninthemaponSlide30.TwooftheninefunctionregionsRegions4and5haveoneRegionalDevelopmentCouncilfortheentirearea.TheothersevenfunctionalregionscontaintwoormoreRegionalDevelopmentCouncilswithintheirboundaries,eachonecoveringpartoftheregionsgeography.The28RegionalDevelopmentCouncilsarecollaborativepartnershipsofbusiness,government,academia,andcivilsocietyleadershipwithineachregion.Theyproducestrategicplanswithrecommendationsforkeyinvestmentstomodernizeinfrastructureandinstitutions,expandR&Dandtechnologytransfer,improveeducationandworkforcedevelopment,extendpublicservices,protectandenhancetheenvironment,andmanyotherinitiatives.TheyalsoplayakeyroleinorganizingthestategovernmentsParticipatoryBudgetingprocessfortheirregionalarea,workingwiththeRSDepartmentofPlanningandRegionalDevelopment(SEPLAN).Inworkingonthisproject,wemetwithmanyRegionalDevelopmentCouncilleadersattheirmonthlymeetingsintheRSLegislativeAssemblyandattheirvariousregionaloffices.Welearnedagreatdealfromtheirvitalwork.ThemapforSlide30identifiestheRegionalDevelopmentCouncilboundariesandsituatesthemwithintheninefunctionalregions.Inaddition,themapillustratestheirrelativeeconomicpositionmeasuredinannualGrossValueAdded(VAB)for2010,withthehighestproductiveoutputgeneratedintheJacuDeltaMetropolitanregion(PortoAlegreandnineothermunicipalities)andtheSerraregion(CaxiasdoSuland30othermunicipalities;http://www.globalurban.org/GUD_CIC_Caxias_do_Sul_speech.pdf).Region1 MunicipalitiesMetropolitanodoDeltado Jacu PortoAlegre(office);Alvorada,Cachoeirinha,

EldoradodoSul,Glorinha,Gravata,Guaba,SantoAntniodaPatrulha,Triunfo,Viamo.

CentroSul SoJernimo(office);Arambar,ArroiodosRatos,BarodoTriunfo,BarradoRibeiro,Buti,Camaqu,CerroGrandedoSul,Charqueadas,Chuvisca,Cristal,DomFeliciano,MarianaPimentel,MinasdoLeo,SentineladoSul,SertoSantana,Tapes.

ValedoCa SoSebastiodoCa(office);AltoFeliz,Baro,BomPrincpio,Brochier,CapeladeSantana,Feliz,Harmonia,LinhaNova,Marat,Montenegro,PareciNovo,SalvadordoSul,SoJosdoHortncio,SoJosdoSul,SoPedrodaSerra,SoVendelino,Tupandi,ValeReal.

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ValedoRiodosSinos Canoas(office);Araric,CampoBom,DoisIrmos,EstnciaVelha,Esteio,Ivoti,NovaHartz,NovaSantaRita,NovoHamburgo,Porto,SoLeopoldo,Sapiranga,SapucaiadoSul

ParanhanaEncostadaSerra Taquara(office);Igrejinha,LindolfoCollor,MorroReuter,Parob,PresidenteLucena,Riozinho,Rolante,SantaMariadoHerval,TrsCoroas.

Region2ValeRiodoPardo SantaCruzdoSul(office);ArroiodoTigre,

BoqueirodoLeo,Candelria,EncruzilhadadoSul,EstrelaVelha,GeneralCmara,Herveiras,Ibarama,LagoaBonitadoSul,MatoLeito,PantanoGrande,PassaSete,PassodoSobrado,RioPardo,Segredo,Sinimbu,Sobradinho,Tunas,ValedoSol,ValeVerde,VenncioAires,VeraCruz.

ValedoTaquari Lajeado(office);AntaGorda,ArroiodoMeio,Arvorezinha,BomRetirodoSul,CanudosdoVale,Capito,Colinas,CoqueiroBaixo,CruzeirodoSul,DoisLajeados,DoutorRicardo,Encantado,Estrela,FazendaVilanova,Forquetinha,Ilpolis,Imigrante,MarquesdeSouza,Muum,NovaBrscia,Paverama,PoodasAntas,PousoNovo,Progresso,Putinga,Relvado,RocaSales,SantaClaradoSul,Srio,Taba,Taquari,Teutnia,Travesseiro,VespasianoCorra,Westflia.

Region3CamposdeCimadaSerra Vacaria(office);AndrdaRocha,BomJesus,

CampestredaSerra,Esmeralda,Ip,MonteAlegredosCampos,MuitosCapes,PinhaldaSerra,SoJosdosAusentes.

Hortncias Canela(office);CambardoSul,Gramado,Jaquirana,NovaPetrpolis,PicadaCaf,SoFranciscodePaula.

Serra CaxiasdoSul(office);AntnioPrado,BentoGonalves,BoaVistadoSul,CarlosBarbosa,

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CoronelPilar,Cotipor,FagundesVarela,Farroupilha,FloresdaCunha,Garibaldi,Guabiju,Guapor,Montauri,MonteBelodoSul,NovaAra,NovaBassano,NovaPdua,NovaPrata,NovaRomadoSul,Para,PintoBandeira,ProtsioAlves,SantaTereza,SoJorge,SoMarcos,SoValentimdoSul,SerafinaCorra,UniodaSerra,Veranpolis,VilaFlores,VistaAlegredoPrata.

Region4LitoralNorte Osrio(office);ArroiodoSal,BalnerioPinhal,

CapodaCanoa,CapivaridoSul,Cara,Cidreira,DomPedrodeAlcntara,Imb,Itati,Mampituba,Maquin,MorrinhosdoSul,Mostardas,PalmaresdoSul,TerradeAreia,Torres,Tramanda,TrsCachoeiras,TrsForquilhas,Xangril.

Region5Sul Pelotas(office);AmaralFerrador,Arroiodo

Padre,ArroioGrande,Canguu,CapodoLeo,Cerrito,Chu,Herval,Jaguaro,MorroRedondo,PedrasAltas,PedroOsrio,PinheiroMachado,Piratini,RioGrande,SantaVitriadoPalmar,SantanadaBoaVista,SoJosdoNorte,SoLourenodoSul,Tavares,Turuu.

Region6Campanha Bag(office);Acegu,CaapavadoSul,Candiota,

DomPedrito,HulhaNegraeLavrasdoSul.Acegua,CacapavadoSul,Candiota,DomPedrillo,HulhaNegra,LavrasdoSul.

FronteiraOeste SoBorja(office);Alegrete,BarradoQuara,Itacurub,Itaqu,Macambar,ManoelViana,Quara,RosriodoSul,SantaMargaridadoSul,SantanadoLivramento,SoGabriel,Uruguaiana.

Region7Celeiro TrsPassos(office);BarradoGuarita,Bom

Progresso,Braga,CampoNovo,Chiapeta,CoronelBicaco,Crissiumal,Derrubadas,

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EsperanadoSul,Humait,Inhacor,Miragua,Redentora,SantoAugusto,SoMartinho,SoValriodoSul,SedeNova,TenentePortela,TiradentesdoSul,VistaGacha.

FronteiraNoroeste SantaRosa(office);Alecrim,Alegria,BoaVistadoBuric,CampinadasMisses,CndidoGodi,DoutorMaurcioCardoso,Horizontina,Independncia,NovaCandelria,NovoMachado,PortoLucena,PortoMau,PortoVeraCruz,SantaRosa,SantoCristo,SoJosdoInhancor,SenadorSalgadoFilho,TrsdeMaio,Tucunduva,Tuparendi.

Misses Santongelo(office);Bossoroca,Caibat,CerroLargo,DezesseisdeNovembro,EntreIjus,EugniodeCastro,Garruchos,Giru,GuaranidasMisses,MatoQueimado,Pirap,PortoXavier,Rolador,RoqueGonzales,SalvadordasMisses,SantoAntniodasMisses,SoLuizGonzaga,SoMigueldasMisses,SoNicolau,SoPaulodasMisses,SoPedrodoButi,SetedeSetembro,Ubiretama,VitriadasMisses.

NoroesteColonial Iju(office);Ajuricaba,AugustoPestana,Bozano,Catupe,Condor,CoronelBarros,Joia,NovaRamada,Panambi,Pejuara.

Region8AltoJacu CruzAlta(office);):BoaVistadoCadeado,Boa

VistadoIncra,Colorado,FortalezadosValos,Ibirub,Lagoa