Industrial foundations of macroeconomic stability for development

Abstract

David Kupfer left industrial economists and those interested in the problems of Brazilian development an inspiring and stimulating academic legacy with relevant questions and very persuasive answers or clues. He guided people and produced studies that have given original contributions to the understanding of complex problems in Brazilian development, especially manufacturing. Insufficient level and deficient quality of industrial investments in Brazil in the recent period was one of those questions. Why are investments in the Brazilian economy mediocre — both in volume and quality? The article starts from the knot of low investments and seeks to broaden the perspective to argue that they will remain meager if no coordinated effort is made to overcome industrial backwardness: there are not enough investments today since there were no appropriate investments in the past and, thus, pre-existing lags increased. No investment, on an exclusively competitive basis, will be able to surround itself with the guarantees of profitability that other production activities (mineral, agricultural), trade (face-to-face retail), and services (energy, transport infrastructure), in addition to strictly financial, can provide. Macroeconomic stabilization can only happen with concomitant efforts to rebuild the microeconomic bases, the business and institutional fabric that make up the production system and the manufacturing logic.