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This article examines the nature and extent of the changes in Brazilian industry after ten years of economic liberalization. The article demonstrates that most structural features of Brazilian industry remain unchanged except in the management of production processes and in the ownership structure of firms, as rationalization and inward internationalization became generalized processes. Brazil may face a development paradox in the years to come. History suggests that local capital and innovation capabilities have been outstanding features of countries successful in achieving sustained economic development. If internationalization of ownership is to remain and local innovation capabilities are to be pursued, then Brazilian private and public policy makers must depart from established policy practices and seek new ways of regulating and inducing firms towards local value creation.

Industrial competitiveness in Brazil ten years after economic liberalization