ABSTRACT
Industrialization was the driving force of stable economic growth in Brazil until the 1980s. From the end of the Second World War, Brazilian manufacturing grew at an average rate of more than 8 per cent per year, supported by an import substitution policy aimed at building up production capacity to serve the highly protected and cartelized internal market. This trajectory was interrupted in 1981. The structural weakness of Brazilian industrialization, particularly its technological fragility and the slowdown in productivity growth, combined with a deteriorating macroeconomic situation, showed that the import substitution model had exhausted its potential.2 These limitations became more evident in the face of the worldwide acceleration of technical change and the increasing importance of international competitiveness as a strategic policy objective in industrialized countries.
