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close this bookThe Mega-city in Latin America (UNU, 1996, 282 pages)
close this folder10. São Paulo: A growth process full of contradictions
View the document(introductory text...)
View the documentDevelopment of a metropolis
View the documentMetropolitan involution
View the documentQuality of life in the state of São Paulo
View the documentMetropolitan problems
View the documentPublic administration
View the documentThe future
View the documentNotes
View the documentReferences

Development of a metropolis

São Paulo began to grow rapidly during the last quarter of the nineteenth century. It developed on the basis of coffee production and the "Europeanization" of the urban hinterland. Modernization transformed the productive structure, the transport and communications systems, and the consumption structure of the region, changes reflected in the city's built environment. São Paulo and its region responded to every shift in material culture in the metropolitan countries, eagerly adopting every new innovation. Indeed, for a century, the adoption of one new invention after another was the basis of São Paulo's virtually uninterrupted economic growth. The process of modernization firmly entwined the fortunes of the city with those of its state.

Until the 1960s, Brazil lacked adequate modern transportation and there was no national market. São Paulo supplied the south and south-east, the only region of the country with a well-developed system of ports, railways, and roads. When the Brazilian "miracle," the construction of Brasilia, and the opening of new roads into Amazonia finally unified the country, the São Paulo region benefited enormously. It became the undisputed economic centre of Brazil. Not only did its manufacturing and commercial activities thrive but it also developed into the country's main financial centre. Until 1960, finance had been mainly controlled from Rio de Janeiro, the headquarters of major public financial institutions such as the Central Bank and the National Bank for Economic Development. The transfer of these functions to Brasilia and the integration of Brazil into a single market gave São Paulo the opportunity it needed to take over.

Between 1968 and 1984, São Paulo banks increased their share of the country's total bank deposits from 26 per cent to 42 per cent (Cordeiro, 1988: 158). By 1985, 33 per cent of Brazilian banks had their headquarters in the city. Many important banks moved their main offices from Rio de Janeiro to São Paulo; by 1989, 18 of the 23 foreign banks operating in Brazil had their principal Brazilian offices in the city, only five in Rio de Janeiro (Cordeiro, 1990). The growing financial clout of the city attracted other economic activities; for example, the headquarters of the FIAT holding company was located in São Paulo in 1990.

If Rio de Janeiro still maintains its superiority in the cultural world, with a major television complex and almost all cinema production, São Paulo increasingly controls the country's advertising business. In the early 1980s, its advertising billings were already higher than those of Rio, and by 1985 São Paulo companies controlled two-thirds of the billings. Today, São Paulo contains 60 per cent of the major agencies and nine of the eleven agencies with more than 250 employees. It is also now the country's major intellectual centre, with the largest university and research complex in Brazil and with a substantial proportion of the major scientific publishers.

Today, São Paulo is not only Brazil's dominant economic centre but has established itself as a major world city. In the process, it has begun to change its form. Without losing its industrial importance, it has become a centre of services and the indisputable hub of commercial decision-making. As industrial employment has begun to move out to nearby cities, São Paulo has been transforming itself into an informational complex. This is reflected in the growth of technical, scientific, and artistic employment in the city. From 205,000 workers in 1971, the total rose to 460,000 in 1981 and 760,000 in 1990 (National Household Survey, 1971, 1981, and 1990). Whereas the city's total workforce increased by 119 per cent between 1971 and 1990, the labour force in informational activities increased by 271 per cent; this sector's share of total employment expanded from 6.3 per cent to 10.4 per cent during the same period.

In the process, São Paulo's share of Brazil's gross national product has declined from 25 per cent in 1970 to 20 per cent in 1987. This decline is the result of its loss of manufacturing activity, which fell from 44 per cent in 1970 to 31 per cent in 1987 (table 10.2). Although total manufacturing employment has not actually fallen, employment in other parts of the State of São Paulo has been growing much more quickly (see next section).

Table 10.2 Distribution of manufacturing industry in State of São Paulo, 1970-1987






Greater São Paulo





City of São Paulo





Other municipalities





Rest of state





Sources: Industrial censuses for 1970, 1975 and 1980; Fundação SEADE/Estado de São Paulo, 1992, vol. 3: 190

São Paulo is now what Cordeiro (1988: 153) calls a "transitional metropolis," something completely different from an industrial city. Its functions and importance are no longer reflected in the mere flow of material goods, it now organizes those flows through its decision-making power and its control over information. São Paulo is therefore passing through its third phase of globalization. The first, based on commerce, began in the late nineteenth century and continued until the 1930s; the second, based on manufacturing, began in the 1930s and ended in the 1960s.