Economy and Society
The German craftsmen eventually started to manufacture shoes and machinery on a large scale and in the 1960s began to export goods, a process that transformed the city into a magnet for internal immigrants from impoverished areas around the state and the country. This caused significant demographic growth that was not accompanied by the infrastructure needed to accommodate the recently arrived population; favelas then formed, which are the source of many of today's social problems. Today's Novo Hamburgo depends heavily upon shoe exports, although it diversified its industrial and commercial base in the early 1990s.
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