Rio de Janeiro is, without doubt, one of the most picturesque, exotic and exciting places to visit and, for good reason, is high on most people’s ‘bucket list’. With its 90 kms of white sandy beaches, its unique pristine coastline, green forests and iconic rock formations, and its picture postcard views from the Christ the Redeemer statue at Corcovado, it rarely disappoints, whatever time of year you pass through.
Rio is one of the few cities in the world (along with Sydney, Cape Town and LA) where you can live by a beach within short commuting distance of your office, and the locals certainly seem to enjoy themselves, with the beaches, bars, nightclubs and restaurants almost always full on a 24/7 basis. With local prices already high and rising, you sometimes wonder how they pay for it all!
However, whilst not losing Rio’s special appeal as a tourist attraction, the city now needs to reinvent itself as it prepares for the influx of investment, business and trade that is expected to flow into the region between now and the Rio Olympics 2016. This is a challenge occupying the minds of local Government agencies and businesses who are keen to offer a serious alternative to neighbouring Sao Paulo which appears to be almost bursting at the seams (with a population of 20 million people, an urban sprawl covering over 1,525 sq. kms, and 6 million cars on the road, the city is almost in a permanent state of gridlock!)
As a regular visitor to the major cities in all of the BRIC countries, I have to say that Rio has quite a bit to do to be taken seriously by international business people. As you wander the city streets of Rio, observing the dilapidated streets, crumbling buildings and office workers wearing T-shirts, shorts and thongs, you can’t help wondering how this will all be viewed by serious Chinese, Japanese and American investors. Wearing a tie and suit, I felt totally out of place, and in fact ducked back into my hotel during the day to change into a more casual outfit! This is all in sharp contrast to Sao Paulo which looks and feels every bit a modern, thriving, bustling and prosperous first world city, albeit one where you spend more time than seems reasonable in a traffic jam (unless you are amongst the mega-rich who navigate the traffic by private helicopter!)
Having said all of the above, Rio can and undoubtedly will transform itself in the coming years, and is in fact already in a strong position, as evidenced by the following facts and figures:
- With a population of 6 million, Rio is the second largest city in Brazil and the third largest in Latin America.
- Rio is the headquarters of major companies in Brazil and the capital of major industries like Oil & Gas, Information Technology and Communication, Research and Development and Tourism.
- 56% of Brazilian GDP is within a radius of 500 km of the city.
- The City accounts for 50% of State GDP (US$60bn) and absorbs a quarter of Brazil’s total foreign direct investment
- Rio de Janeiro has the lowest unemployment rate and highest rate of investment in Brazil.
(the above are just some of the surprising statistics and information available from Rio Negocios, the local Government agency responsible for investment attraction from overseas who we met during our visit)
Over the next few years, working with my business partner, Andrew Gilkes (who ran the Olympic business legacy programs for Sydney 2000 and Beijing 2008) and collaborating with the Olympic Sponsors and local Government agencies, I plan to organise and co-lead a number of international business delegations to Brazil under the banner of Brazil Access 2016. These business visit programs, which will be promoted all over the world, will visit Sao Paulo and Rio, meet and network with local businesses and entrepreneurs, and learn about the unique opportunities and challenges for doing business with the world’s 6th largest economy (see previous blog). This will be a private sector initiative designed to deliver spectacular outcomes for all stakeholders and will ensure that Rio maximizes its “time in the sun” when the Olympic flame is extinguished in London later this year.
The success of the Olympic movement in recent times has largely been attributed to the lessons, experiences and know-how which has been passed on, along with the Olympic flame, from one city to another. For example, Australian, Chinese and British firms will be amongst the most active bidders for design and construction projects at the Rio Olympics site at Barra. And, as mentioned above, local Olympics sponsors will benefit from the networks, relationships and interest generated from past Olympic business legacy programs via our initiative, Brazil Access 2016.
The Rio Government has already committed to spend $14.4 billion on infrastructure, construction and urban regeneration over the next 4 years and, if past Olympic programs are anything to go by, this may well be an under-estimate. Without doubt, Rio will reinvent itself during this period and position itself as more than just an attractive tourist destination. Sydney had a similar image issue to overcome in the lead up to the Olympics in 2000 and, in 2008, China wanted to promote its significant capabilities in science and technology to counter the international perception that it was just a low cost manufacturing hub. How Rio goes about this transformation, and how quickly, will be fascinating to watch.
Rio was once the capital city of Brazil and one of the world’s most prosperous cities. You can see evidence of this everywhere. The locals, and even some of those who have left the city to start new lives in Sao Paulo and elsewhere (but still regard themselves as “Cariocas”), are very proud of their city and won’t hear a bad word said about it. The energy, vibrancy and creativity of Rio can be felt throughout. We heard many stories of hedge fund managers, IT start ups and other service providers moving their HQ to Rio for business, location and lifestyle reasons.
The signs are promising. The ambition and ideas are in place. The strategic plan is coming together. How Rio executes on all of this will define its position as Brazil’s second major city. Why not come with us and take a look?