This June, Mack Institute leadership traveled to Brazil for Wharton’s 56th Global Forum, which was held in São Paulo for the first time. Hosted annually in a different world city, the two-day business conference brings together Wharton alumni, faculty, and global business leaders for lectures, panel discussions, and networking.
This year, the Mack Institute hosted two events: a welcome reception featuring a talk on Generative AI in Innovation Management from Executive Director Dr. Valery Yakubovich, and a panel discussion on corporate venturing led by Prof. Serguei Netessine and featuring Brazilian business leaders Luis González (CEO and Co-Founder, Vidalink), Eduardo Horai (CTO, Ambev), and Anderson Thees (Venture Capitalist, Itaú Unibanco).
Yakubovich’s talk, held on the conference’s inaugural night in the Grand Hyatt Hotel, focused on how Generative AI can be leveraged for innovation management. Yakubovich drew on the research of Mack Institute faculty co-director Prof. Christian Terwiesch to argue that, when it comes to creativity, Generative AI’s tendency to “hallucinate” — to produce inaccurate or fabricated information as if it were real—is a feature, not a bug.
“We have some research showing that when you ask these models to produce something very specific or contextual, they often don’t perform well. However, if you pose an open-ended question or ask for something new, they can sometimes strike gold,” he explained. “Creativity in business is rarely about creating something entirely unheard of; it’s typically about recombining existing ideas in novel ways. This is exactly how these models function—they recombine text and tokens probabilistically, generating new kinds of statements that can potentially be innovative.”
Yakubovich went on to further detail Prof. Terwiesch’s experiment on Generative AI business innovation and to take questions from the audience, which was primarily made up of executives from South America and around the world.
The panel discussion, held the following day, kicked off with a presentation from moderator Prof. Serguei Netessine that showcased the Mack Institute’s forthcoming research on corporate venturing in Forbes 500 companies with a special emphasis on those in Brazil. Netessine explained that, while there are only six Brazilian companies on the Forbes Global 500 list, all of them engage with startups in some way, and four have a corporate venture capital arm (CVC). In fact, Brazilian Forbes 500 companies rank third for CVC engagement, with only France and Spain ahead of them.
“The numbers may be small, but Brazil has good engagement relative to other countries,” said Netessine.
Netessine then turned to the three panelists, all three of whom are leaders at Brazilian firms. They discussed the innovation ecosystem within both São Paulo and the country as a whole, including its unique assets and challenges.
For example, González spoke about some of the unique challenges, particularly structural ones, faced by Brazilian entrepreneurs. The influence of the U.S. dollar is one of them:
“Technology in Brazil is still very, very expensive,” he said. “Much of it is dollarized, so we’re subject to currency fluctuations.”
González suggested that technology companies should be incentivized to help Brazilian startups grow so that they can become larger and more reliable clients, but acknowledged that the dollar pricing issue remains a barrier. He also described a similar dynamic when it comes to attracting and retaining talent.
“In Brazil, hiring during the tech boom was particularly difficult because people were getting offered salaries in euros and dollars while living in Brazil,” he said. “For many smaller companies, it was quite a challenge to retain and to hire new talent. One of the things that can be done is to help create more talent, help educate more people.”
Horai, who works at brewing giant Ambev, spoke about his experiences working with startups in cities across Brazil. He explained that Ambev makes “a broad effort” to connect with entrepreneurs from all over the country, and finds that they are exceptionally willing to collaborate with big firms, even when it requires them to pivot.
“Sometimes they’re willing to completely change their business model to adapt to us,” said Horai. “I think this is true entrepreneurship. They don’t have a fixed idea. They just want to find a big problem and solve it. It’s one of the unique things I’ve seen here in Brazil out of all the places I’ve worked.”
But Horai cautioned that larger firms should avoid taking services from startups for free. Small startups often offer their services to larger companies gratis, hoping the name recognition will grant them legitimacy.
“I always push back on that when I can,” he said. “If something is a real problem for us that’s worth investing time and people and whatever else, it’s worth it to pay for the solution.”
Thees spoke about an initiative specific to São Paulo: an innovation cafe he built while working at Redpoint Ventures. After seeing how important networking events were for startups in Silicon Valley, he was inspired to create something similar in his own city: an event space where people could “stumble upon one another” and forge connections.
“Silicon Vallery is a very tiny place,” he said. “Actually, they take pride in it being boring because people focus on building startups. And São Paulo is the opposite. It is a huge place. It has the biggest concentration of startups [in Brazil], but people struggle to find each other.”
The event space Thees helped build was open to the public and held multiple events a day—and, further departing from the Silicon Valley model, also featured a dance floor and free beer after 6 p.m.
As the event concluded, moderator Netessine summed up what he learned:
“My takeaway is that Brazil has a fascinating and robust ecosystem that unites big companies and startups,” he said. “But there’s one major difference—you drink beer and dance.”