By: Gustavo Brigatti, Valor Online

Brasscom, an organization that represents Brazilian software and technology service exporters, and Apex, a governmental export agency, have today announced an agreement to speed up a process which has been repeated mantra-like in recent years by companies in the sector: to make Brazil an alternative for companies interested in outsourcing these activities outside their countries of origin, known as "offshore outsourcing".

Inspired by the success of Indian companies, which have been a reference in the area for over a decade, with business worth around US$ 50 billion, Brazilian companies have been fighting to attract international clients and increase their turnover.

The figures on technology service exports are not very precise as there is no single reference or indicator in the country, but the estimate is that the value was close to US$ 1.3 billion in 2008. This is an interesting leap compared with the US$ 200 million recorded in 2004, but it remains far from the target set for 2007: US$ 2 billion.

The president of Brasscom, Antonio Carlos Rego Gil, says the cost of labor, the need to train professionals in the English language, the size of the Brazilian companies (five to ten times smaller than the Indian ones) and the lack of recognition of the country in the area are the factors that have limited its growth in this business.

Brasscom?s project with Apex will tackle this last issue. In the next 24 months R$ 14 million will be invested in promoting Brazil internationally, with action including the hiring of an international public relations consultancy, an advertising campaign running in business magazines and newspapers, holding seminars for potential clients, carrying out market studies, and an annual conference in Brazil. Half the budget will come from Brasscom and the other half from Apex. "This is a billion-dollar game, you can?t go in unprepared", says Gil.

According to Gil, now is the time to begin promotion. Costs in India have risen because its currency, the rupee, has appreciated, and governance issues are arising because of recent problems such as the financial scandal involving Satyam, one of India?s largest IT companies.
Global spending on offshore outsourcing will grow by 20% a year from 2009 to 2010. This is a much slower rate than the 40% seen in recent years, but enough to create an additional market worth US$ 30 billion. The forecast is that total turnover, at US$ 70 billion last year, will reach US$ 101 billion in 2010. Of this new revenue, India will probably get US$ 15 billion. The other half will be fought for by countries such as Brazil, China, the Philippines, Mexico, and Russia.

By Gil?s reckoning, Brazil could gain US$ 3.5 billion by 2010, if not before. He adds that fiscal exemptions stipulated in law 11.774/2008 will also help in the process. "We have not yet understood the total impact of these measures", says Gil. The law allows, for example, exporters to benefit from the Special Regime for the Acquisition of Capital Goods (Recap), if their export revenue is equal to or greater than 70% of gross total revenue the year before.

Ricardo Schaefer, director of management and planning at Apex, says the partnership with Brasscom is part of the agency?s new guidelines to promote Brazil as an exporter of high technology.