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CeBIT March 2011

Brazil IT: Regional Leader, Global Player Value Beyond Expectations


Agenda

1.

Brasscom: Objectives and Agenda

1.

The Brazilian IT-BPO Market

1.

Brazil’s Value Proposition

2


About Brasscom VISION

Position Brazil as one of the top 3 key global IT centers

MISSION

Spread the excellence and innovative capabilities of IT to other economic sectors, increasing their productivity and quality

3


Brasscom’s Agenda VISION

Position Brazil as one of the top 3 key global IT centers INSTITUTIONAL Institutional Relations

Strategic Plans

Public Relations

REGULATORY

HUMAN RESOURCES & EDUCATION

INFRASTRUCTURE & INNOVATION

MARKETING & EXPORTS PROMOTION

Competitive, fair, and ethical IT-BPO sector environment

Educational programs aligned with the IT-BPO sector

Strategic programs to support the the IT-BPO sector growth

Promoting Brazil’s potential in the IT-BPO sector

MDIC MCT

Productive Development Policy (PDP) Industrial and Technological Development and Trade Policy • Investments in innovation for sustainable economic growth • Strategic areas: ICT, Energy, Healthcare, Biotechnology, Nanotechnology, Defense •

Growth Acceleration Plan (PAC) Investments in infrastructure for sustainable economic growth US$ 300 B – 2007 to 2010; US$ 200 B – 2011 to 2013 • Strategic areas: Energy, Transportation, Housing, Sanitation, Digital Inclusion (PNBL - National Broadband Plan) • •

Mega Events: World Cup 2014 and Olympic Games 2016 4


US$ BILLION

The Brazilian IT-BPO Market 10 9 8 7 6 5 4 3 2 1 0

ICT MARKET

IT Spending 2009 US$ 31 Billion

10 9 8 7 6 5 4 3 2 1 0

Source: Brasscom, IDC

TOTAL ICT SPENDING ACCOUNTS FOR 7% OF BRAZIL’S GDP

5


The Brazilian IT-BPO Market - Offshore

IT-BPO EXPORTS

10 9 8

US$ BILLION

7 6 5 4 3 2 1 0

Application Services 73% Infrastructure Services 16% Others 11% Source: Brasscom, IDC

6


The Brazilian IT-BPO Market vs LATAM

0%

10%

20%

30%

40%

50%

Source: Gartner – Emerging Market Analysis, IT – Brazil – July 2010

60%

70%

80%

90%

100%

7


The Brazilian IT-BPO Market Finance  Inter-banking fund transfers in real time  Sophisticated solutions in automation, internet banking, operations via mobiles, and ATMs  Sound and dynamic electronic payment system  514 million cards in the market  5.3 billion transactions

Manufacturing, Retail and Services  Responsible for the greatest volumes of IT investments  Intensive use of ERP, BI, SCM, R&D systems, CRM and e-commerce

E-Government  Electronic Voting System, Online Tax Returns Energy, Food & Commodities

EXPERIENCE AND CAPACITY TO INNOVATE SET BRAZIL APART

Telecom, Healthcare

8


Brazil’s Value Proposition

BRAZIL’S VALUE PROPOSITION

FAVORABLE BUSINESS ENVIRONMENT STRONG RESOURCES AND INTELLECTUAL CAPITAL CULTURAL AFFINITY TOTAL COST COMPETITIVENESS

9


Brazil – Economic Strength and Political Stability 8th Largest Economy in the World and 1st in Latin America  2009 GDP: US$ 1.5 T 2010 Forecasted GDP Growth: 7.8%  2009 FDI: US$ 25.9 B 2010 Forecasted FDI Growth: 13.3%  Strong and diversified IT market: World’s 8th largest domestic IT market Industry Power  Top multinationals have been in Brazil for decades – IBM: 1917; GE: 1919; J&J:1933  4th largest manufacturer of aircrafts; 7th largest manufacturer of automobiles  World’s top 5 in regulation of securities and exchanges  30+ Brazilian companies in the Fortune Global 500 / Forbes Global 2000 – Petrobras, Vale, Embraer, Itau/Unibanco, Bradesco, Banco do Brasil, AB Inbev, CSN, Gerdau, Aracruz, Suzano, Brazil Foods, among others Food and Energy Power  World’s leading exporter of soy beans, beef, poultry, sugar, orange juice, iron, and ethanol  A global reference in the production of renewable energy: biofuels and hydroelectric power  World’s 10th largest oil reserves: Petrobras set the record for largest ever public offering: US$ 70 billion

Sources: Economist Intelligence Unit, IMF, World Economic Forum, Gartner

10


Brazil – Emerging Market Innovation


Brazil – Case Studies

12


Sound Infrastructure and Human Capital Human Capital and Education

Infrastructure Strong Telecom Country wide network access  184 million mobile phones (2010)  15 million broadband (2009) 

Technology Parks

Highly Skilled Workforce 1.7 million ICT professionals  Recognized for their knowledge, commitment and flexibility  100,000 new professionals / year 

9

2 13

Strong Energy Best among emerging countries  Leader in renewable clean energy: biofuels and hydroelectric power 

17

Educational Programs

2,281 Universities among Federal, State and Private (MEC, 2006)  6 million students (MEC, 2006)  1,714 academic programs related to Strong Transport ITO-BPO sector  World’s 2nd largest in airports - 34  More than 250 new public technical international / 35 domestic  881 weekly-international flights (2009) schools will be created by the end of 2010 (MEC, 2008) Growth Acceleration Plan (PAC) US$ 300 B - 2007 to 2010 US$ 200 B - 2011 to 2013

12

Brazil Ranks 17th in Scientific Research Worldwide

16

14 1 6 11 10 7 18 15 5 8 4 3

1

Campinas

10

Londrina

2

Porto Digital

11

Rio de Janeiro

3

Tecnopuc

12

Uberaba

4

Sao Leopoldo

13

Sergipe

5

Alfa Tech

14

Sao Carlos

6

Petropolis

15

Iptec

7

Univap

16

Itajuba

Valetec

17

Brasilia

8 9

Paraiba

18

Curitiba 13


Cultural Landscape

92.7 million

25 million

18 million

15 million

Afro-Brazilians

Italian-Brazilians

German-Brazilians

Hispano-Brazilians

10 million

1.8 million

1.6 million

Arabic-Brazilians

Polish-Brazilians

Japanese-Brazilians


Total Cost Competitiveness

Optimized On-Shore / Offshore Ratio

High Productivity

Timezone: Real-time communication

Industry / Business knowledge

Nearshore: Lower management / travel costs

Cultural compatibility

Low-turnover rates

High Quality 

Low levels of rework

15


Government Support

Strategic for the Brazilian Government, the IT sector has direct incentives in payroll and income taxes, and also in human resources’ qualification programs Law 11774: reduction of social security contributions on company payrolls by 50%  Law 11908: income tax deductions of 200% of the amount spent on staff training and R&D  Tax deductions on technology transfers, licenses and royalties  Fiscal incentives for special projects, such as reduction of Property Tax and Service Tax  North and Northeast regions: from 40% to 60% of the research-focused staff’s salaries subsidized  Training programs’ financing, increasing certifications and innovation 

16


Thank You sergio.pessoa@brasscom.org.br


IT Superpower Brasil  

Brasscom: Brasil -Superpower for Offshoring

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