In the late 1990s, Recife, on Brazil’s northeastern coast, was in decline. Its picturesque historic center, made up of 17th century colonial buildings with Dutch, Portuguese, and French influences, had plunged into neglect, reflecting a deep economic crisis worsened by deindustrialization. Many young people were fleeing the city for opportunities in the commercial centers of São Paulo and Rio de Janeiro, or heading overseas. Something had to change.

In 2000, a group of businesspeople, government officials, and academics came up with a vision to regenerate Recife's historic center by building a new technology district. With 33 million reais ($6.8 million) raised from the privatization of the local electricity company, they created Porto Digital, a nonprofit organization with the mission of turning Recife into a hub for technology and the creative industries. The plan—a “daring way of showing São Paulo there was intelligent life in the northeast,” according to Claudio Marinho, an urban engineer who was one of the masterminds behind the Porto Digital strategy—was more radical than just a tech park, though.

Marinho incorporated concepts seen in cities like Paris, such as “walkability,” which means people shouldn't have to walk for more than 15 minutes to reach the main ecosystem venues such as offices, bars, and cultural spaces to work and socialize. The planning emphasizes “casual, fortunate encounters and serendipity,” he says. “Such situations make the overflow of knowledge much more likely and, of course, business gets done.”

The world is littered with ambitious tech hub projects that set out to revive and reinvigorate cities that have lost their purpose. The recipe is often the same: some token government support, some tax incentives, and a lot of PR. Many—probably most—fail. But nearly a quarter century after it was launched, Porto Digital has turned Recife into a bona fide center for Brazil’s emerging tech and creative economy sectors, with more than 350 residents , from global players to cutting-edge startups. The industry employs more than 17,000 people, many of whom have emerged from the local university, the Federal University of Pernambuco, which boasts one of Brazil's top-rated computer science courses. Now the hub is looking to the future again, hoping to capitalize on its successes to lead the line for Brazil in new areas of innovation, such as generative artificial intelligence.

“Porto Digital has never stopped growing, but we want to significantly grow the number of people working in tech in Recife in the coming years. We also want our companies to generate most of their revenue outside the northeast, and preferably outside Brazil,” says Silvio Meira, one of the founding fathers and president of the board of the tech park, and a professor emeritus at the Federal University of Pernambuco.

The core idea behind Porto Digital is “triple helix collaboration,” which is about bringing government, academia, and businesses together to drive societal change.

One of the initiative’s founding institutions is the Recife Centre for Advanced Studies and Systems, known as Cesar, which conducts research for some of Brazil's largest companies and has its own higher education institution, with courses focused on technology, design, and business. The center has also been a breeding ground for some of the leading startups born in Recife, having supported more than 220 new businesses over the past few years.

Cesar was founded four years before Porto Digital. Its history is deeply intertwined with the local cultural fabric, most notably the Manguebeat movement, which combined traditional maracatu rhythms with modern rock, funk, and hip hop. Created in the 1990s by the late musician Chico Science and his band, Nação Zumbi, this was more than just a new genre; it was a call for cultural and economic rebirth.

Science's vision was to “inject energy into the mangrove,” which metaphorically referred to the then stagnating city of Recife. The movement manifested into multiple meeting points across the city where new ways of making music, art, cinema, fashion, and design were developed, blending global references and trends with Recife's rich cultural heritage.

Amidst this cultural effervescence, a group of students and professors from Federal University of Pernambuco’s informatics department, including Meira, started to translate the fundamentals of Manguebeat into the creation of a new tech scene, and so Cesar was born. "We decided that the paradigm shift that was taking place culturally could be applicable to the tech industry and started to work on making Recife a place where people wanted to develop their careers and stay,” says Eduardo Peixoto, Cesar’s CEO. An electrical engineer, Peixoto worked abroad for years—first in the Netherlands, then in Switzerland, and returned to Brazil to help build the organization he now leads.

Porto Digital provides an array of advantages to its resident businesses, which include a service tax reduction from 5 percent to 2 percent for companies based within the historical center, as well as property tax exemptions. In addition, the tech park offers consulting services, a program focused on business expansion and other intangible benefits such as networking events.

The combination of practical support and the sense of collaboration within the local tech ecosystem has helped bring in major companies, including automaker Stellantis, the cybersecurity firm Tempest—which was acquired by aerospace conglomerate Embraer in 2020—and Neurotech, an AI firm sold to B3, the Brazilian stock exchange, for around 1.1 billion reais ($226 million) in 2022. The consulting firm Accenture set up in Recife in 2010. It now employs more than 3,000 people in the city and is one of the main employers in Porto Digital’s tech apprenticeship program. Focused on students from the public school network, the Embarque Digital [Digital Onboarding, in Portuguese] program aims to usher up to 2,000 students into the local tech workforce by 2024.

"Relationships that could be perceived as transactional or even competitive in other ecosystems become true collaborations at Porto Digital,” says Luis Fernando Silva, a managing director at Accenture. “Reaching out to people across all spheres is simpler, and things happen faster that way.”

Porto Digital’s approach has, its supporters say, helped Brazilian companies to get in early to capitalize on emerging tech trends by turning cutting-edge academic research into real businesses.

"There is a difference between clusters that are purely focused on technology and science and those that can translate learnings into actionable insights, says Meira, whose digital transformation firm, TDS Company, was developed inside Cesar. “At Porto Digital, there is a lot of integration between those who think and research innovation and those who turn all that knowledge into value for clients and end users.”

Cristiano Lincoln Mattos, CEO and cofounder at Tempest, which also spun out of Cesar, attributes the very existence of his company to the ecosystem's ability to translate expertise from the academic world into market needs. "We wouldn't even be able to create the company if we didn't have Cesar's support at the start, especially considering the local cybersecurity market was nonexistent 23 years ago,” says Mattos, whose company now has offices worldwide and is moving into the defense industry, as well as other markets, after being purchased by Embraer.

Cesar wants to do the same for AI. The institute wants to become an international center to train businesses in how to adapt to generative AI and help their employees become “generative AI natives.” “We are focused on testing new ways to enhance productivity by combining human and machine input to create or enhance design, content, and code,” says Peixoto.

Considering Porto Digital's hyper-collaborative model, the Covid years weren't easy. The impact of not being able to meet in person was compounded by the suspension of key events organized by the nonprofit, such as Rec'n'Play, an annual festival aimed at sparking interest in tech careers among the population. Still, the district saw a 10 percent uptick in the number of workers over the past three years, with revenue growing by 29 percent. The previous government, under right-wing president Jair Bolsonaro, was also not a major supporter of the project.

"The years under Bolsonaro were really challenging for us, as the government's science and technology structures were completely dismantled—we had to reinvent ourselves," said Porto Digital's CEO Pierre Lucena. Since 2016, the organization running the tech district has not received resources from the federal government and conducts open innovation projects and consulting to other states to ensure its financial independence.

With the pandemic behind it, Porto Digital’s immediate goal is to have 25,000 professionals working in companies based in the tech district by 2025, and more than 600 businesses there. The tech park aims to train up to 50,000 people by 2050, focusing on underserved communities through initiatives from high school all the way to re-skilling professionals in technology areas such as AI disciplines.

The state government, which has backed the initiative from the beginning, hopes to leverage the tech hub’s success to build an economic base that extends beyond the state capital and into the rest of Pernambuco. Pernambuco is the third most unequal Brazilian state, with 51 percent of its citizens living below the poverty line, according to the Brazilian Institute of Geography and Statistics.

"Our challenge is to replicate [the Porto Digital structure and training initiatives] across the hinterland, to develop entrepreneurs in the state that already have a tech focus, and to support those who aren't yet in that space," says Raquel Lyra, governor of the state of Pernambuco.

Growing the tech sector could mean more employment and economic opportunities but also the chance to develop digital public services and innovative solutions to the state’s pervasive challenges. “We are a poor state, with 2 million people without food and an equal number without access to water,” Lyra says. “We know our problems, and that we fail in areas that could be addressed with use of data and technology.”

These aren’t straightforward challenges, but Meira, who has watched Porto Digital grow from an idea to its current prominence, is convinced there are reasons to be optimistic.

"Recife doesn't wait for things to happen; we are not interested in doing things that have been done before," Meira says. “This has worked for us in the past and will continue to make us stand out in the future.”