Lessons for Indonesia from the Economic Transformation of São Bernardo do Campo

São Bernardo do Campo, a city located in the Brazilian state of São Paulo, was once known as one of the largest manufacturing centres in Latin America.

In the middle decades of the 20th century, the city was renowned as a highly developed centre for furniture production, as well as home to various other industries. However, over time, São Bernardo do Campo experienced significant changes in its economic structure, shifting from an industrial centre to a city more focused on the service sector.

In the 1950s, São Bernardo do Campo was at its peak as a centre for the furniture industry. The region’s thriving furniture industry became one of the main pillars of the local economy, providing jobs and spurring rapid economic growth. However, the golden era of the city’s furniture industry was short-lived.

Major changes began to take place in 2013, when São Bernardo do Campo was still home to around 190,000 jobs in the industrial sector. However, in the following six years, there was a drastic decline in the number of jobs in the sector.

In 2019, the number of industrial jobs fell by almost a third, to 140,000. This decline reflects broader changes in the city’s economic structure.

This decline is not just limited to employment figures. Pharmaceutical industrial production, once an important sector in the 1980s, has seen a dramatic decline.

At its peak, the pharmaceutical industry accounted for 55% of total industrial production in São Bernardo do Campo. However, in 2020, the sector’s contribution slumped to just 5%. This phenomenon indicates a major shift in the city’s industrial focus and illustrates the challenges faced by traditional manufacturing sectors.

Moreover, the departure of Ford, one of the major players in the automotive industry, from the city is another indicator of the significant changes taking place. Ford’s decision to leave São Bernardo do Campo signifies the city’s diminishing attractiveness as a centre for the automotive industry, which used to be one of its key sectors.

A more profound change is seen in the complete disappearance of the furniture industry from the city. What was once one of the main strengths of São Bernardo do Campo’s economy no longer exists. The once thriving furniture industry is now just a part of the city’s history, replaced by a more modern and dynamic service sector.

São Bernardo do Campo’s transformation from an industrial centre to a service city reflects broader changes in the global and local economy. In the context of globalisation and technological change, many cities around the world are facing similar challenges, where traditional industrial sectors are in decline and being replaced by sectors more focused on services and technology.

São Bernardo do Campo is a concrete example of how economic change can affect the social and economic fabric of a city, and highlights the need to adapt to changing market dynamics.

Source: Bappenas