Economic Center

During the middle of the 18th century, the former province of São Paulo was essentially agricultural and sparsely populated and its capital, the city of São Paulo was scarcely more than a small town. With the expansion of coffee-growing, the capital became Brazil's second largest city at the turn of the 19th century and thanks to the technical and industrial knowledge of the immigrants, it began to generate capital from coffee and the recently inaugurated hydroelectric power, on course to becoming Brazil's largest industrial centre.

The stock market crisis of the 1930s marked the end of the agricultural export-based economy and the crystallization of industry as a source of dynamism within the Brazilian economy. Because of the favourable conditions, including the preceding accumulation of capital from coffee and the existence of a reasonable consumer market, at that time São Paulo was emerging as leader in the industrialization process.

Until the 1970s, industry was largely concentrated in this state. After that time, a process of industrial deconcentration began, partly as a result of the search for new sources of raw materials, cheaper labour and new consumer markets, and partly from federal policies aimed at the correction of regional imbalances and the stimulation of exporting activities. A process of deconcentration is now taking place in São Paulo, for important activities are now being diverted to industrial and agricultural export-based centres such as Campinas, Ribeirão Preto and the Paraíba Valley which are now competing with the capital in what concerns social and economic indicators.

The crisis of the 1980s had a major effect on São Paulo. However, the state is now undergoing a major restructuring of its production base, modernizing its industry, increasing agricultural exports whilst at the same time reinforcing the service sector and facing the challenge of becoming integrated within the world economy. São Paulo is keeping pace with the latest technological innovations in parallel with the expansion of the economic, political and cultural opportunities for the most disadvantaged section of the population.