The valley of electronics: Relations between the creation of a school and the building of a successful industrial cluster in Brazil

The municipality of Santa Rita do Sapucaí, located in Brazilian state of Minas Gerais, has only 37,000 inhabitants and a tradition of decades in agricultural production. In 1959, a technical school in the electronics field was founded in this city, being the first one in Latin America and the seventh in the world. The valley where the city lies began to change its character, development pattern and even its personality. In the 1970s a few small businesses were created inside school laboratories, becoming an industrial cluster in 1985, when the city mayor started a marketing campaign, naming the city as the Valley of Electronics. The changes began to attract more students, researchers and entrepreneurs from all around the country and abroad. Currently there are almost 150 companies in electronics and telecommunication fields, which employ nearly one-third of the population and produce $1.7 billion in revenue every year. This article presents a case study conducted in this cluster, presenting the analysis of relationships between firms, schools and the local and federal government and how they do business among themselves and with foreign markets; the exchange of knowledge between companies, educational and research institutes, the management and institutional support in the cluster; and how R&D is financed by private and public capital. The final section presents the considerations about the central role of education in strengthening the development and sustainability of the Valley of Electronics.