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It is time to move forward
The Brazilian software and Information Technology services industry employs over 600,000 people, paying salaries which are twice the national average. The Brazilian IT market is the eighth largest in the world, turning over about US$ 60 billion and exporting US$ 3 billion in 2009. IT is today the base on which services and modern businesses are built. Brazil has taken great strides towards the global market and its industry has grown at a surprising rate, but is still not close enough to what it could be.
To promote this sought-after sustainable growth and to build relationships between the industry and the government, in an unprecedented initiative the associations that represent the Brazilian IT industry (Brasscom, Abes, Assespro, Fenainfo, Softex and Sucesu) got together to produce a document that will guide the sector in the years to come. Thinking about the new scenario that will begin after the October elections, the document defends the sector’s interests, calls for changes, makes proposals and shows the candidates – at federal and state levels – the strategic potential of IT for Brazil’s economy and development.
Generally speaking, the sector has proposed to the candidates running for President and State Governor a pact to make Brazil a leader in IT among emerging countries. Including daring measures, the associations have recommended joint efforts to increase IT’s share of GDP by at least 50%, boosting it from 3.5% now to 5.3% in 2020. They have also suggested increasing software and IT service exports to US$ 20 billion in the same period, creating over 300,000 jobs. The plan, considering the domestic and export markets, is to double the number of people in the IT industry in Brazil, reaching approximately 1.4 million jobs.
Measures have been proposed to the government to make the sector more competitive. Reducing payroll taxes, changing them to turnover taxes, is the most urgent measure – and one which has a direct impact on the “Brazil cost”. It is also essential that the government offer support so that Congress passes a law backing outsourcing. Furthermore, the boosting of innovation to encourage the creation of added value solutions and the reform of governmental purchasing mechanisms to recognize the technique are other points that must be revised.
The document was handed over to the candidates last week and the joint work between the associations representing the sector will continue. The industry is committed and is ready to meet the challenges ahead. To achieve the goals, the government must do its part. With this pact, Brazil will be one of the global leaders in IT.
Antonio Gil
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Brasscom promotes IT at Formula Indy
Brasscom and two of its member companies were at Formula Indy-2010 race in Chicago, on August 29th. Attending the race is part of the strategy to strengthen Brazil’s image as an exporter of IT services and is included in the promotional push being made by the Brazilian Export and Investment Promotion Agency (Apex-Brasil), which supports Brazil’s foreign trade. The aim is to make the Brazilian box a meeting point for executives from Brazilian companies from every sector of industry and international clients and agents, invited by participating companies.
The president of Brasscom, Antonio Gil, says attending this kind of event is strategic, as it allows closer contact with large international companies, so leading to the presentation of the advantages to be offered by Brazilian IT service suppliers. “At the Formula Indy race in Chicago we made contact mainly with US and Canadian executives, and had a chance to show them that Brazil is an excellent IT service center”, he says. “We are much closer to North America that the countries that normally get involved in IT outsourcing. We work almost at the same time as the United States and Canada, and in addition we have a Western culture and expertise in IT. Brazil is very competitive and has great potential. The world needs to know this”.
According to the vice president of Ci&T, Leonardo Mattiazzi, the company’s participation at Formula Indy is one of its strategies to generate export opportunities. “We look for close relationships and loyalty. The event is an excellent chance to create bonds with executives, which helps in commercial relations, despite not being a direct sale”.
Marco Stefanini, founder and president of Stefanini IT Solutions, believes Brazil still has a long way to go before being recognized as a major IT provider at the levels desired, but that events like this are an interesting way to showcase Brazil’s potential. “We have taken very important steps. Fewer than six years ago, Brazil was not even considered to be an IT supplier and today we are recognized as a specialist on certain markets, such as finance. Thanks to the joint effort made by businesses, the government and associations, our aim is to boost exports of software and IT services, and the work done by APEX, especially this year, in promoting events to showcase the differentials offered by Brazil have been of great importance. Transforming Brazil into what we want is an ambitious but achievable target, if we look at all the things we have done in recent years,” Stefanini adds.
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Associations get behind the IT sector
A press conference on August 25th in São Paulo marked the coming together of the associations that represent the Brazilian Information Technology industry to support the strengthening and development of the sector. In a partnership, Brasscom, Abes, Assespro, Fenainfo, Softex and Sucesu, have formulated a set of proposals for the government and political candidates at federal and state levels, aiming to show them what the IT sector has to offer the Brazilian economy and calling for measures to be taken that will help the software and IT service industries. “For the first time, all the associations have gotten together to produce a document. We are talking about an industry that permeates all the activities in society and which, for this reason, must be recognized as strategic to the growth of the country”, said Antonio Gil, president of Brasscom.
At about six pages long, the document puts forward the proposals that, besides supporting the IT industry, aim to establish projects that contribute to the technological development of the country, generating a huge number of jobs and making Brazil competitive on the international market. “This document was developed by all six associations and it represents consensus in the industry. We can double the Brazilian IT market in ten years, but our efforts alone are not enough. We need the government to carry out what has been proposed”, said Gerson Schmitt, president of Abes.
Among the issues dealt with are action that needs to be taken in the tax area, in government purchasing, and fostering of the industry, exports and the training of the labor force. The targets are audacious but the current figures from the sector have confirmed that they are possible – such as growth in the sector at more than twice the rate of that in GDP. The goal is to increase the share of GDP accounted for by IT by at least 50% in the next ten years, from 3.5% now to 5.3%. In the same period, the Brazilian IT market will climb from eighth to fourth in global ranking and the value of IT service exports will increase from the US$ 3 billion made in 2009 to US$ 20 billion in 2020, which will result in the hiring of 300,000 professionals just in the provision of international services, with another 450,000 professionals needed to supply domestic demand.
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R$ 500 million from Finep for innovation
The Financier of Studies and Projects (Finep), an agency at the Ministry of Science and Technology (MCT) in Brazil, in August announced its economist subsidies for 2010, worth R$ 500 million. The money will support innovation in Brazilian companies in six strategic areas: information and communications technology (ICT), energy, biotechnology, health, defense, and social development. Projects related to the World Cup in 2014 and Olympics in 2016 will be included in ICT, as well as innovative devices and systems for high-speed communications capable of fostering the action included in the National Broadband Plan.
Antonio Gil, president of Brasscom, says that although Finep has promised to make 40% of its budget available to small and micro-companies, large and medium-sized companies will also have a good chance of getting part of the finance. “This is an excellent opportunity for IT companies to enhance their projects and begin to work on the big events coming up. Without any doubt, they will create a lot of opportunities for companies based in Brazil”, said Gil.
The lowest amount applied for is R$ 500,000, and the finance can reach up to R$ 10 million. Companies of any size can apply, individually or in association with other companies, and companies that are successful in their applications will also need to invest their own resources in research. This amount may vary from 10% to 200% of the finance, depending on the size of the company. Interested parties have to fill out an electronic form at the Finep website by October 7th.
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Brasil IT+ goes to Orlando
Brasscom will take part in the Gartner Outsourcing & Vendor Management Summit, in Orlando, the USA, from September 14th to 16th. In a partnership with the Association for the Promotion of the Excellence of Brazilian Software (Softex) and supported by Apex-Brasil, Brasscom will be taking the Brasil IT+ brand to this, one of the largest IT industry events in the world. “Joint efforts between two associations from the sector and Apex-Brasil will allow us to further emphasize the enormous potential of the Brazilian market”, says Sergio Pessoa, Marketing Director at Brasscom in the United States.
In its eight edition, the event will be totally focused on the development of business and trade relations. This year, seven companies will make up the Brazilian delegation, two of them having their own stands. “We are the main sponsors of the conference and this also shows the credibility and interest Brazil has in positioning itself as a strategic player”, says Pessoa. As one of the benefits offered by the initiative, the Brazilian executives will have individual meetings with potential clients, chosen according to the companies’ interest. They will also take part in interactive sessions, talks, and structured meetings with potential buyers at the event.
The summit will be held at the Gaylord Palms Resort, bringing together about 600 executives involved in Information and Communications Technology (ICT) management, as well as analysts from Gartner Group.
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