Brazilian cities lose positions in global competitiveness ranking

Brazilian cities are becoming less competitive, according to a study by Kearney, a global strategic management consultancy. Since 2019, they have become less promising for attracting and retaining investments, people and ideas.

In the last survey, referring to the first half of 2023, the best placed Brazilian city was São Paulo, in 46th position among 156 cities analyzed. The others in the ranking are Rio de Janeiro (76th), Belo Horizonte (111th), Porto Alegre (115th). Salvador (124th) and Recife (131st). All lost positions compared to the 2019 ranking (see list at the end of the text).

The scenario is also bad for the country in another consultancy survey, Outlook Global, which measures the potential of 156 cities in attracting and retaining investments, human capital and ideas, looking to the future.

None of the Brazilian cities are among the top one hundred. São Paulo is the best positioned, in 101st position. Salvador, Rio de Janeiro, Belo Horizonte, Porto Alegre and Recife occupy positions from 132nd to 136th.

Problems are more in Brazil than in cities

According to the country manager from Kearney in Brazil, Sachin Metha, the problems can be attributed more to the Brazilian situation than to the particularities of the cities. “There are difficulties in doing business in the country, the bureaucracy is large and reforms are moving slowly”, he says.

The executive expects, in the coming years, advances in the tax area, due to the reform approved in Congress last year. According to him, it is also necessary to reduce bureaucracy in doing business and the volatility of the Brazilian economy.

Even in the face of problems, the cities listed have positive aspects, according to Kearney:

• they have incentives for innovation and technology;
• they are major economic hubs in the country; It is
• has initiatives under development, public or private.

Another relevant factor that favors the country is the cultural factor: Brazilians have an innovative spirit and are open to new things, points out Metha.

One of the ways for Brazilian cities, according to him, is to be inspired by international benchmarks, such as those in the Middle East, where there is a large flow of capital.

“There is no point trying to be inspired by cities like New York, Paris or London, which are already established as centers for attracting investment or human capital”, he says.

He adds that two other fundamental needs in Brazil are the reduction of barriers and better security conditions. The problem is more serious in Rio de Janeiro and cities in the Northeast.

Leaders, New York, London and Paris are threatened by emerging centers

Kearney’s research also shows that the world’s leading cities, such as New York, London and Paris, face greater competition from the world’s emerging centers.

According to the consultancy, this greater competition is the result of the remote work revolution, the fragmentation of the global geopolitical environment and the acceleration of the use of technologies such as artificial intelligence.

The Kearney study points out that leaders cannot take their positions for granted in the coming years. “The traditional hierarchy of these cities will become more fluid in the future, as opportunities for growth and greater productivity will be distributed with the next waves of innovation driven by artificial intelligence”, highlights the research.

Leading cities will face an increasingly competitive global environment. The ability to offer value propositions will be extremely crucial to attract people and investments, highlights the consultancy.

Global Cities Index

What it indicates: Cities that, according to Kearney, are currently leaders in attracting and retaining investments, people and ideas.

Global ranking

• 1st New York (USA)
• 2nd London (United Kingdom)
• 3rd Paris (France)
• 4th Tokyo (Japan)
• 5th Beijing (China)

Evolution of the position of Brazilian cities

Global Outlook

What it indicates: Cities that, in the future, can become leaders in attracting and retaining investments, people and ideas, according to Kearney.

Global ranking

• 1st San Francisco (USA)
• 2nd Copenhagen (Denmark)
• 3rd London (United Kingdom)
• 4th Luxembourg (Luxembourg)
• 5th Paris (France)

Evolution of the position of Brazilian cities