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As to many other developing countries, the impacts of the recent economic globalization on the Brazilian economy have revealed a diversified tendency in spatial development, when regional economic indicators are observed. This is due to the specificities of each region, as regards their sector structure, the availability of human resources, the agglomeration economies and the degree of technological innovation undertaken by local enterprises. From a situation of regional inequalities verified in the social-economic levels of development at the beginning of the eighties, the dynamics of the Brazilian regional evolution has presented different speeds and intensities in the several spaces. This paper aims to evaluate the dynamics of Brazilian regional distribution of the working population during the 1985-95 period. The analysis aimed to verify the sector and regional differences and for this purpose dispersion quotients were calculated based on the Working Population (W). These specific industrial and regional redistribution indices were prepared, based upon special tabulations of the informations from IBGE’s (Brazilian Institute of Geography and Statistics) PNADs (Annual Domicile Sampling Survey). It also carries out an empirical examination of the trend in Brazil towards the services sector and of changes to the country's occupational framework that have been brought about by the restructuring of the production process.
The analysis considered theoretical aspects on the production restructuring process and the trend towards the services sector seen worldwide in recent years. The empirical analysis focused on the increasing trend towards the services sector in Brazil and included is an evaluation of the redistribution of employees in the consolidated economic activities of the Primary, Secondary and service sectors. The paper concludes with the finding that the proliferation of the services sector within Brazil, though constant, has failed to demonstrate the intensity and momentum that was observed in more advanced economies, with regards to the introduction of modernization.
It is also inferred that although the economic policies did stimulate a global convergence process of labor distribution among regions, those policies did not attenuate economic dynamism concentration to the desired extent, nor did it diminish in any considerable way the difference in the degree of development among the regions. Business organizations located at the more advanced regions reveal more possibilities to face global competitiveness, and to increase labor productivity, due to the influence of structural aspects related to material and human resources, and also to specific spatial, politic and cultural conditions.
The impacts of the recent economic globalization on the Brazilian economy have revealed a diversified tendency when the regional productivity indexes are observed. This is due to the specificities of each region, as regards their sector structure, the availability of human resources, the agglomeration economies and the degree of technological innovation undertaken by local enterprises. From a situation of regional inequalities verified in the social-economic levels of development at the beginning of the eighties, the dynamics of the Brazilian regional evolution has presented different speeds and intensities in the several spaces.
World globalization process caused significant changes in advanced and also in less developed economies in recent years that include: a) increasing internationalization of economic activities; b) the reorganization of dominant firms: c) the increasing integration of manufacturing and service production; d) the growing use of microelectronics technology; e) the growing demand in industry for a high skilled workforce, but many routine jobs being displaced by technical change; f) the increasing complexity and volatility of consumption; and a changing role for state intervention.
If those changes occur more rapidly in more advanced countries, it is also observed a similar dynamics of restructuring in other low and middle income countries, although in a lower speed. For each level of economic development, it is found similar patterns of occupational structure and restructuring, during a period of time due to industrialization and technological modernization. Business organization have to cope with international competition dealing with many transformations as to technology and plant, nature of labor qualification, new organization of labor process, new features of production (non-continuous production and limited economies of scales). On the other side, technical innovations affects the nature of product (intensification of non-material services, the features of product), consumption (through forms of delivery of product, role of consumer, organization of consumption) and also markets (organization of markets, regulation and marketing tools).
Productive and occupational structures in Brazil are marked by significant regional differences, as stressed by many researchers involved in analysing spatial aspects of economic development and income distribution (IPEA, 1996). Some Brazilian states, such as São Paulo, Rio de Janeiro, Rio Grande do Sul, Amazonas, Distrito Federal and Santa Catarina, present a per capita income superior to the national average, while the others show incomes which were lower than half the Brazilian average index. Nevertheless, it should be noted that this situation indicates an advancement in relation to the previous period, starting in the fifties, when the income differences between the most advanced and most backward states were even higher.
In the 1950-85 period, some important transformations occurred in the productive and occupational structures of the various spaces, in a way that some regions approached the country average GDP, either in the positive sense (through a higher relative growth rate) or negative (due to an inferior relative growth).
Regional dynamics is impelled by a sequence of factors, which act to accelerate, retard or diminish the specific growth rates. On one hand, there is the influence of structural aspects related to material and human resources, and also to specific spatial, politic and cultural conditions (Kon, 1995). On the other hand, there is the influence of conjuncture situations, which also have repercussions in the various social-economic realities, with different results and intensities. The macro and microeconomic policies aiming at economic stabilization or at stimulating specific sectors have differentiated effects in each region, according to the structural and conjuncture possibilities of answering to these stimuli. Therefore, each space reacts differently to the impacts of the recent economic globalization on the Brazilian economy, in what concerns to the possibilities of improving labor productivity.
This paper evaluates the dynamics of Brazilian regional development during the 1985-95 period and the performance of regional productivity, in a period of domestic economic instability, while facing a world in transformation where the global competitiveness became the rule. The analysis aimed to verify the sector and regional dynamics, and for this purpose Differentiation or Dispersion Quotients were calculated based on the Product per Worker indexes as a proxy variable of regional productivity.
Brazilian regional inequalities
The Brazilian regional inequalities indexes show a slow trend towards regional convergence of per capita incomes between the years 1985 and 1990, continuing in the direction revealed by estimates made by Souza (1993) for a historical series previous to 1985. However, for 1992 to 1995, a change towards a greater divergence is observed in the trend, albeit in a not significant degree, as it is possible to see from the observation of the Regional Differentiation Quotients (QDj) presented in Figure1.
The positive dispersions, as related to the average, are always higher than the negative ones, that is, the magnitude of the dispersions in the regions which present a per capita GDP superior to the average, is higher that in the regions which show a GDP inferior to the national average. This tendency has been unfavorable to the less developed regions in the last years. The regional differences in the per capita GDP are considerable, as much in the magnitude of dispersions as in the direction of convergence or divergence in the whole period. First, it can be verified that the regions of Rio de Janeiro, São Paulo and the South present a development indicator which is constantly superior to the national average ; the regions of Minas Gerais-Espírito Santo and the Northeast always show negative dispersions, that is, a level of development which is always inferior to the average in the period, while the Center-West presents negative dispersions between 1985 and 1989 and in 1995, and positive from 1990 to 1993.
An additional observation calls attention to the high level of disparity between the most developed region of São Paulo and the less developed of the Northeast. The convergence movements in relation to the average, which were observed in the last years, did not show a sufficient magnitude to alter the considerable gap in development between these two regions. Former researches (Kon 1992 and 1995) provide a basis for the formulation of the hypothesis that the productive structuring and the level of qualification of the labor force, which are regionally differentiated in Brazil, are determinant factors of the level and speed of spatial dispersions in development. The analysis of the sector regional working population distribution, which will be carried out, permits a more detailed observation of the determinants of the differences in regional development dynamics.
Regional differences in the Brazilian GDP/capta evolution - 1985-1995
Regions* RJ SP Sul MG- NE C-O N
1985 1.14 1.69 1.05 0.82 0.46 0.94 1.28
1986 1.15 1.69 1.05 0.80 0.48 0.91 1.30
1987 1.13 1.68 1.08 0.81 0.47 0.93 1.27
1988 1.12 1.66 1.07 0.82 0.47 0.98 1.32
1989 1.12 1.64 1.07 0.85 0.47 0.98 1.33
1990 1.11 1.63 1.08 0.83 0.47 1.01 1.31
1992 1.21 1.64 1.09 0.83 0.46 1.06 1.10
1993 1.17 1.64 1.14 0.83 0.45 1.05 1.07
1995 1.18 1.65 1.14 0.84 0.45 1.05 1.07
Primary data sources: IPEA; IBGE/PNADs.
* RJ=Rio de Janeiro; SP= São Paulo; Sul=South; MG-ES=Minas Gerais and Espírito Santo;
NE= Northeast; C-O West-Center; N=North.
The trend towards productive restructuring in Brazil
The ongoing changes in the world economy have direct effects on the Brazilian economy that manifest themselves through structural changes in the markets, thus demanding organizational and production changes by companies. The services sector has been playing an important economic role in these changes, particularly with regard to employment and income generation. The level and speed of modernization required for effective and increasing participation of the Brazilian economy in the global marketplace has not yet been achieved by the local economy. This assessment applies to both the production restructuring of companies from a microeconomic standpoint and the economy as a whole from a macroeconomic standpoint.
In a previous study on the evolution of the productive restructuring in Brazil (Kon, 1995), it was noted that from the beginning of the Brazilian industrialization process until 1980, effective average annual growth of services production, with generated product (GNP) used as an index, was comparable to the average global economic growth rate. In this period, the supplementary role played by these activities towards the evolution of industrial endeavors is quite clear, particularly in polarizing centers. Throughout this period, the expansion rate of services in support of industrial and agricultural activities exceeded that of services designed to serve the population directly. In recessive or stagnant periods, the ability to expand services acted as an escape valve for part of the population released from other sectors who, though in sub-employment, continued contributing to the generation of products. In the early 1990s, with the strict stabilizing measures that resulted in a considerable impediment to Brazilian economic activity, the annual growth of the services sector, until 1994, was at a level with the country’s consolidated average.
The examination of the country’s product sector make-up, in turn, revealed the relative importance of the services sector in the economic development process. Since the 1950s, and throughout the development of manufacturing activities, the share of services in the sector make-up of the economy has been increasing constantly. In the 1950s, marked product concentration in the services sector indicated meeting the requirements for the distribution and marketing of primary goods and the development of transportation and financial infrastructure services. The capital accumulated in the agricultural sector in this period was destined to the consumption of luxury imported goods sold domestically. From the outset of the industrialization process, increased product generation by manufacturing activities took place at the expense of the farming sector’s participation, while the services sector continued to expand its share in the gross product until 1990. Not until 1995 did the data reveal expansion of the product generated by primary activities, with a slight relative drop in the share held by services. This took place in view of the fact that, in the early 1990s, services activities more actively employed a great number of workers.
These tended to be less qualified individuals whose wages and productivity were naturally lower.
The study we refer to also demonstrates that structural changes for the country as a whole were less drastic than in economically polarized regions. On the other hand, average annual product growth rate per worker * a proxy for productivity in the services sector since the 1950s ** was lower than general average rates for the country. This behavior confirms global economies’ trend towards increased growth of manufacturing activities, as previously discussed. In Brazil, however, this lower productivity is more intensely felt than in advanced countries and also reflects the greater relative absorption of lower-qualification workers at low wage and low capital-intensivity positions.
A more detailed examination of product generation in the services sector in the 1970s reveals a trend towards modernization, with services relating to the financial, transportation, and communications industries experiencing higher growth rates. Beginning in the 1980s however, changes within the services sector resulted in the stagnation of the old modernization process as services became more informal in nature and began being marketed toward a larger segment of the population. The services sector was soon comprised of companies that operated in a variety of areas within the economy and required a broad range of combinations in regards to capital-labor relationships, even among activities within a single category. Although the technological innovation process has gained momentum in Brazil in the 1990s and resulted in structural changes to both the representative classification of the economy in its entirety and to the services sector, it is worth noting that these changes were less drastic than in manufacturing activities and, in comparison to developed economies, the modernization process is slow. In the early 1980s, the Brazilian economy developed slowly with regards to the process of the global modernization of services, though some isolated sectors were examples of the successful implementation of technological innovations. Conversely, one must realize that the early years of the decade were marked by a sizable decrease in growth in all sectors that culminated in 1993. The early years of decreased growth dictated economic behavior throughout the decade, despite a surge in 1985 and 1986 that was followed by a return to stagnate growth through the remainder of the decade. It was not until the 1990s that the economy was able to fully recover and resume the rapid modernization process that began in the 1970s. As a result, technological advancement in Brazil has been relatively static.
Regional sector dispersion of the working population
The path to productive restructuring in Brazil shaped the working population sector and regional distribution and the per capita continuous dispersions among the diverse spaces. Previous analysis (Kon, 1995) shows that regional productive structures present specificities which result from the association of historical and geographical determinants, together with the human, natural and capital resources base, and also with the macrosocial base * compounded by cultural, political, and economically differentiated systems * which define diverse spatial specializations. Those differences constitute a mass of factors that are determinant in the variations in the levels and speed of regional evolution of labor distribution and of the per capita GDP.
The observation of the Regional Differentiation quotients according to the sectors, shown in Tables 2 and 3, reveals these considerable differences in the regions’ specializations as regional inequalities determinants. Those indicatives show the degree of specialization of a region in a specific sector, when compared to the country as a whole. The analysis of the QDij indexes based on the working population, reveal several trends of labor division, when compared to the product generation. In all regions, from 1985 to 1990, a dynamic of convergence and a following divergence direction in 1995 is noticed. Secondly, a higher degree of intensity of dispersion for Rio de Janeiro (only in 1985) and São Paulo (in the whole period), when compared to the Product Generation indexes,
Workers Distribution Regional Differentiation Quotients (QDij)- Primary and Secondary Sectors.
Brazil - 1985, 1990, 1995.
Sectors Years RJ SP SUL MG-ES NE C-O N
1985 0.17 0.33 1.34 1.23 1.62 0.94 …
1990 0.19 0.30 1.34 1.20 1.66 0.99 …
1995 0.16 0.33 1.16 1.17 1.63 1.10 …
1985 1.09 1.84 0.94 0.69 0.57 0.49 0.86
1990 1.01 1.77 0.95 0.81 0.60 0.48 0.84
1995 1.03 1.66 1.23 0.85 0.54 0.57 0.96
1985 1.31 1.08 0.79 1.07 0.86 1.17 1.23
1990 1.07 1.08 0.91 1.10 0.88 1.07 1.09
1995 1.33 1.12 0.90 1.16 0.78 1.02 1.14
1985 1.11 0.75 0.83 1.09 0.99 1.69 1.82
1990 1.08 0.71 0.90 1.21 0.94 1.81 1.35
1995 1.36 0.75 0.85 1.25 0.99 1.06 1.48
1985 1.15 1.56 0.89 0.82 0.68 0.75 1.03
1990 1.03 1.52 0.94 0.92 0.70 0.72 0.94
1995 1.14 1.44 1.11 0.97 0.64 0.74 1.05
Primary data source: IBGE - PNADs.
Workers Distribution Regional Differentiation Quotients (QDij) - Tertiary Sector.
Brazil - 1985, 1990, 1995.
Sectors RJ SP SUL MG-ES NE C-O N
1985 1.16 1.15 0.89 0.86 0.89 1.03 1.68
1990 1.14 1.08 0.94 0.88 0.91 1.03 1.55
1995 1.13 1.13 0.89 0.86 0.92 0.99 1.66
1985 1.50 1.13 0.81 1.09 0.75 1.13 1.09
1990 1.37 1.04 0.86 1.06 0.85 1.13 1.11
1995 1.36 1.17 0.86 0.98 0.82 1.08 1.17
1985 1.68 1.39 0.99 0.77 0.49 1.14 1.18
1990 1.39 1.50 0.84 0.91 0.54 1.07 1.11
1995 1.74 1.55 1.00 0.94 0.45 0.87 0.91
1985 1.58 1.12 0.92 0.96 0.71 1.03 1.48
1990 1.51 1.16 0.91 0.97 0.74 0.95 1.27
1995 1.48 1.27 0.92 1.01 0.72 0.89 1.07
1985 1.37 1.07 0.84 0.97 0.87 1.15 1.29
1990 1.34 1.00 0.84 0.97 0.94 1.10 1.27
1995 1.40 1.09 0.87 0.96 0.88 1.01 1.26
1985 1.49 0.88 0.77 0.83 0.88 1.68 2.13
1990 1.21 0.85 0.86 0.77 1.00 1.59 1.87
1995 1.25 0.90 0.83 0.84 0.94 1.46 2.02
1985 1.49 1.46 0.93 0.77 0.57 1.08 1.15
1990 1.21 1.35 0.92 0.87 0.55 1.04 0.91
1995 1.25 1.46 1.05 0.69 0.57 0.87 0.91
1985 1.41 1.14 0.85 0.95 0.78 1.15 1.38
1990 1.32 1.08 0.88 0.95 0.85 1.12 1.31
1995 1.35 1.16 0.88 0.93 0.83 1.05 1.34
Primary data source: IBGE - PNADs.
showing that the regions, its magnitude is lower, though it presents a positive dispersion (above the average).
In the Secondary sector as a whole, the intensity of dispersion based on working population is higher than the one based on the product, tending to approach the national average in that period. The highest dispersion is shown in the Manufacturing Industry, and the degree of workers’ concentration in the most developed regions of São Paulo (in the whole period) and the South (in 1995) is even more significant, revealing that product growth had a lower speed than the workers’ absorption, which led to an inferior growth in productivity, as we will see later on. Nevertheless, the trend in the whole period was one of convergence towards the national average for these more dynamic regions and a slight divergence for the less developed ones.
As regards the Construction sector, the region of São Paulo presented QDijs around 0.20, that is, considerably below the average for the product, and as to workers’ indicatives it is placed near the average, which means that this sector still has the function of less qualified labor absorption, mainly in a period of low economic activity.
In these activities, from 1990 to 1995 a strong tendency towards positive divergence in the Southeast and North regions was noticed, and a greater negative distance from the average only in the Northeast. In the Tertiary activities sector, the global intensity of dispersion is also higher when based on labor indicatives presenting, from 1985 to 1990, a dynamic approach to the national average and, in the following period, a higher positive distance. It should be noticed that in Rio de Janeiro, all sectors in the whole period present QDij considerably higher than the average. Meanwhile, the opposite is observed in relation to the Northeast region, that is, almost all indicatives are lower that one (except Public Administration in 1990). Observing each Tertiary sector separately, the highest intensities of dispersions are shown in Public Administration, tending to convergence, and it is verified higher levels of positive dispersion in the North, Center-West and Rio de Janeiro are verified. The other regions present QDij which are inferior to the average, but tending to convergence, from 1985 to 1995.
6. Final Remarks
Economic policies adopted by the government in the 1980-95 period, aiming mainly at economic stabilization, had considerable repercussions over the Brazilian economy as a whole, but interfering with different intensities and speeds over the dynamics of each socio-economic specific space. In this period, Brazilian economy also faced the need to increase domestic and international competitiveness, and to accompany the acceleration of technological progress and economic globalization, which had been restricted to a technological and organizational restructuring in enterprises in most of the countries. Regional dynamics was impelled by many factors which act in order to accelerate, to retard or decrease the specific growth rates in the various economic spaces inside the country. For this behavior, on the one hand there contributed structural aspects related to material and human resources availability, and to specific cultural and political conditions in each space (Kon, 1995).
On the other hand, conjuncture situations also had repercussions with different results and intensities in the diverse social-economic realities. Macro and microeconomic policies aiming at economic stabilization, or at stimulating specific sectors, had differentiated effects in each region, according to the possibility of structural and conjuncture answer to these stimuli.
The inequalities index, which determines the convergence or divergence in the regional development, based on the per capita GDP, shows a global trend to convergence for the period 1985-90 towards the national average and in the next period, to divergence. In the first period, the economic policies aiming at containing the fast growth of inflation (which veered towards hyperinflation) contributed to the decrease in the dynamism of the Manufacturing industries, which are concentrated in the most advanced regions, and made possible a certain degree of product generation decentralization. The growth of divergence in the next period can be ascribed to the process of opening to imports and technological development increase, which had more intense impacts on the pole regions, better supplied with economic substructure and agglomeration economies.
Among the regions with a positive dispersion, that is, above the national average, São Paulo and North converge more quickly than Rio de Janeiro and the South (which presented some divergence at the end of the period). Among the less advanced spaces, the Northeast present a per capita income which is more than 45% inferior to the average.
Productive structuring and the level of labor qualification, which are regionally different in Brazil, are determinant factors of the level and speed of the observed spatial dispersions of development. To qualify in greater detail these difference in the spatial development tendencies, there were analyzed the differences in the regional productive structures and their variations in time, that is, the dispersion of the various sectors’ labor indexes. It was concluded that some more dynamic sectors, such as the Manufacturing industry, in which productivity is considerably superior to the average of the country, and which contribute with a high weight in product generation in the more advanced regions, went through a period of considerable loss of dynamism, which contributed to the regional convergence of the period. These same sectors, when presenting some recuperation, lead some regions to a greater product and labor concentration and to a situation of divergence. The Public Administration activities were also responsible by the greatest product generation and product per worker differences, with high gains in the period 1985-90 and a considerable backing in the next period. However, among the activities distinguished as development drivers, the Transports and Communication sectors show losses of productivity in all the regions in the first period analyzed, and some more intense gains only in Rio and São Paulo in the next period. The Finance Activities, also indicative of regional economic advance, show gains in the positive dispersion only in São Paulo. The sector and regional redistribution of the labor show that, in a global way, no noticeable transformations in the regional productive structures occurred and the changes observed in the most advanced world economies as a result of technological and organizational restructuring of enterprises, are still achieved in a very slow rhythm in Brazil.
It is inferred that the economic policies in the period, though resulting on a global regional convergence process, did not avoid the continuation of the concentration of economic dynamism in the most advanced regions, nor did they diminish the gap in the degree of development of the Northeast region, which continues to be wide. The results of the analysis confirm the continuity of considerable regional disparities and it was verified that the sector and regional redistribution of the workers indicate that, in a general way, no remarkable changes occurred in the regional productive structures in the period. It is also inferred that although the economic policies did stimulate a global convergence process among regions, the world globalization process had the impact of maintaining the economic dynamism concentration, and did not diminish in any considerable way the difference in the degree of development among the regions. Business organizations located at the more advanced regions reveal more possibilities to face global competitiveness, and to increase labor productivity, due to the influence of structural aspects related to material and human resources, and also to specific spatial, politic and cultural conditions.
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