SP Negócios: 7 reasons São Paulo is the biggest innovation hub in Latin America

Ahead of the first Web Summit Rio event, business management consultancy SP Negócios and entrepreneurship agency Ade Sampa describe the business opportunities available to startups and investors in São Paulo.

São Paulo is a city of superlatives.

It’s the largest city in Latin America, with more than 12 million habitants. It’s also the richest city in Brazil, making up 10 percent of the total national GDP.

Its central role in the economy of the fifth-largest country in the world – and indeed the entire Latin American region – is, without doubt, one of the factors that explains why the Global Startup Ecosystem Report 2022 describes the city as a huge innovation hub.

Below, we break down the seven major factors that have turned São Paulo into a breeding ground for new businesses and innovations changing the world of technology.

1. Large domestic consumer market

At more than 12 million inhabitants – with this number rising to 21 million when you include the wider metropolitan area – São Paulo is the most populous city in South America, offering a wide and diverse market. The city’s close proximity to other major Brazilian cities, such as Rio de Janeiro and Curitiba, expands this consumer base further.

2. Diversified regional economy

São Paulo was formerly associated with heavy industries such as manufacturing. Now, the presence of corporations in booming sectors such as commercial services, finance and commerce has given São Paulo a range of trading and investment advantages over other South American cities. Indeed, 90 percent of the city’s total GDP stems from these three sectors.

3. Access to investment

Around 25 percent of all financial institutions in Brazil – including B3 – are headquartered in São Paulo. The only stock exchange in the country, B3 is also considered the largest in the Americas and 20th largest in the world, netting R$2.5 billion in revenues in the fourth quarter of 2022.

São Paulo is also the headquarters of 418 global financial institutions, including Goldman Sachs, JP Morgan, CitiBank and BID, among others.

4. A highly qualified workforce

The University of São Paulo is ranked among the top 100 in the World University Rankings, and produces a huge number of STEM graduates. This talent pipeline finds ample opportunities working in the global data centers of technology companies such as Google and Facebook, as well as in the regional headquarters of Airbnb, Netflix and Amazon.

Of 542,000 total entrepreneurs in the Brazilian IT sector, around 197,000 operate out of São Paulo.

A bridge in downtown São Paulo. Image: SP Negócios and Ade Sampa

5. An entrenched innovation ecosystem

São Paulo is a true innovation hub in Latin America, home to more than 2,200 emerging startups, in addition to business incubators and accelerators. This makes the city an attractive environment for entrepreneurs seeking to develop innovative solutions and technologies.

No wonder São Paulo is home to 12 of the 23 unicorns operating in Brazil.

6. Developed infrastructure

The city has a vast network of logistical and technological infrastructure serving its nearly 1,500-square-kilometer urban footprint. This includes airports, seaports, highways and several public transport systems.

In addition, São Paulo has comprehensive 5G coverage across the city, ensuring business leaders retain consistent access to digital services while on the go.

7. Support for entrepreneurship and creativity

São Paulo offers several programs to support and promote startups in the creative economy, digital economy and green economy.

Greentech startups, for example, can enjoy support from the likes of São Paulo’s German Center for Science and Innovation. Meanwhile, the city’s digital entrepreneurs can get advice and mentoring from global tech companies – including Google and LinkedIn – through the SP Stars program.

To learn more about opportunities in the innovation ecosystem of São Paulo, discover how SP Negócios, Ade Sampa and Invest SP are opening the city to the world at Web Summit Rio.

Main image of São Paulo skyline: SP Negócios and Ade Sampa