Innovating industrialization and vocational training in the Suape Port Complex, Brazil
Creators: name: Guinn, Andrew
Publisher: name: The University of North Carolina at Chapel Hill University Libraries
Year: 2011

description: In spite of the effects of the Great Recession on the global economy, Brazil has enjoyed relatively stable growth of 4.4% per year on average since 2006 (IPEA) while at the same time making great strides in reducing inequality. Several commentators, however, have noted that the country's ability to continue to meet economic development goals is becoming threatened by the fact that many Brazilian firms, particularly those in capital-intensive and export-oriented sectors, are unable to identify domestic sources of skilled labor (Downie 2008, Marcelino 2009, Maximo 2010, Oscar 2010). This skills shortage, in fact, could become a bottleneck for future economic growth (Pompermayer et al 2011). Much of the unsatisfied labor demand in these industries is tied to massive public and private investments tied to the recently discovered Pre-Salt offshore oil deposit and the infrastructure requirements of the upcoming World Cup and Olympic Games. The national government has recognized the significance of these skills shortages and has targeted education and training systems for development as part of the Programa de Aceleracao de Crecimento (PAC; English: Growth Acceleration Plan). Actually implementing these workforce development plans, of course, is easier said than done. Given the competitive pressures facing firms to keep costs low and to avoid the poaching of trained workers, it becomes very difficult to induce private actors to invest in the vocational training institutions. Indeed, establishing firm-based and -funded vocational training institutions is extremely difficult and requires a delicate balance of economic, social and political factors (Thelen 2004). Understanding the conditions that favor private investments in vocational training, then, should be of great interest to planners and policy makers in both less developed and economically advanced countries. This paper will contribute to the debate by demonstrating the conditions under which Estaleiro Atlantico Sul (EAS; English: South Atlantic Shipyard), a large shipyard in Pernambuco State in the Northeast of Brazil, and regional public and non-profit actors overcame barriers to training in order to break through labor market bottlenecks in particular occupations. This case is especially striking given that EAS managed to achieve an impressive speed to production in spite of the firm's commitment to local hiring and its location in a region characterized by large labor supply deficits in occupations critical to the firm's operations. Within five years of incorporation, EAS oversaw a trained workforce of 4,800 individuals, most of whom previously had no ties to the formal labor market or to industrial work in general. When public funds for training are notoriously inadequate and private firms face poaching externalities and few incentives to provide training themselves, how was this impressive level of human capital formation achieved in such a short period of time? In this paper, I will argue that this outcome was possible on an institutional level because of the way in which new training institutions were "sandwiched" between guarantees provided at both the national and local levels which in turn opened a space within which privately supplied training institutions could flourish. Due to a historical lack of relevant technical expertise in Pernambuco, at the heart of this outcome was the innovative recruitment of skilled, immigrant workers who served as trainers and mentors to the entry-level workforce.