HardHeads

Countries are made up of people and many of them are “hardheaded”.

Okay, looking at the past is not a good advice, especially in Brazil where there are several versions about the past, and one of the most difficult issues is making predictions about tomorrow.

However, we can look at countries that can or are managing to get out of a situation of absolute poverty and start reaching middle income, we can cannibalize. Why not? What they did? If we study literature we will find some very interesting works, I leave a golden tip on this topic at the bottom.

In general terms, we know that the countries that started their trajectories with agriculture, some remained or remain there, and others diversified and achieved better results (diversification). In one example, Argentina produces food to feed 10 Argentines, but hundreds of thousands of Argentines are hungry, there diversification is equal to zero!

Obviously Brazil was and is one of the countries that boasts an unbeatable agriculture, without realizing that there is little sophistication in its agriculture, so it can be copied and it is an illusion to “believe” that the world depends on our soy or oil. In other words, Brazil is at a standstill, while countries that have had to face many difficulties, including wars, have already learned their lesson and abandoned us, for example, Vietnam already exports more than Brazil.

Countries that realized the need to maintain agriculture and diversify their range of products are the ones that perform best. In other words, they took advantage of the resources coming from agriculture and invested in the production of other goods and services. How? With a vision / government plan! Unfortunately we don’t have it.

And, those countries that currently follow this road in these new segments are leaning against the frontier of knowledge, producing increasingly sophisticated goods and services.

So, the suggestions are:

1. Brazil, diversify your range of products and services, do not depend only on agriculture and few heroic islands of excellence spread across the country.

2. Brazil, make use of your institutions as other countries have done to achieve higher levels of quality of life for their people.

3. Brazil, do not dispose of your research centers, even if they need government funds.

4. Brazil, bring universities closer to national companies and demand that armed forces, SUS etc. make your purchases from national companies.

5. Brazil, for those national companies that may be “privileged” with these local purchases, demand a counterpart. How? Increasing numbers of exports. Why? Because whoever exports is good out there! They are people who know how to fight with the big ones!

Obviously Brazil is going in the opposite direction and the examples are on TV every day. Or rather, Brazil has not changed (regressed) its production agenda since the 1980s, and this policy has brought us up to the current delay. Our economic recovery when we leave this SARS – 2 pandemic will be in Y lying down, that is, few will survive.

As for the small and medium-sized entrepreneur, yes, we found several “hardheads”. Here the suggestion is similar, focused diversification. The small and medium entrepreneur when his business is doing well, that is, when he makes good profits, he understands that diversifying is the best option and usually does so. Result: Break the Face.

Why does he miss? When an entrepreneur finds a niche where he can make a profit, it brings him some wrong conclusions:

1. He “thinks” he is very good, practically a genius. Thus, if he jumps to another market segment, attracted by higher profits, he will be even more successful. Wrong. Each market has its nuances and when moving to another segment or attaching it to the business brings a lot of noise. And, the entrepreneur does not have the necessary experience for this adventure, most of the time he ends up breaking (or hurting a lot) his profitable business.

2. A businessman who owns two, three, … diversified companies, for example, a software production company, a small construction company, and a women’s clothing trade, shows in his portfolio little or no synergy between the options chosen. The consequence of these poorly made choices is the expenditure of energy generating heat and the decrease in profitability or even bankruptcy.

Can the small and medium entrepreneur diversify? Yes how? Choosing carefully complementary activities to your profitable business. If he owns a software company what are the limits of his performance, what can he do on the fringe of his market? The choices are not simple, but they are judicious and the synergy between the businesses will provide him with a greater profit in the sale of products and even in the eventual sale of his companies.

Ref .: “The Atlas of Economic Complexity is an economics book published in 2011 by Ricardo Hausmann, César A. Hidalgo,