Brazil as a major IT center in the world

Information Technology has helped the world to develop economically, socially and culturally, and it is currently going through significant developments. Several technologies are entering the market. Mobile technology, digital TV, broadband and the Internet itself are means of crossing over from B2B to B2C and even to C2B, which will potentially create a leap in the use of IT and communications. These new technologies and the large number of newcomers to the system force us to adapt everything that has been created in 45 years of IT development to current technical advances. The world has today, for instance, 4.1 billion mobile phones that will interact with every system already developed.

At the same time, companies need constantly to invest in IT in order to control, develop and expand their businesses globally. And it is vital that they do this progressively faster and at lower costs. IT investments represent on average 5% of a company's budget and each percentage point subtracted from it will have a direct and positive impact on profitability.

These are the engines of an industry that will reach US$ 1.3 trillion in the world in 2010, with an annual growth rate of about 3%. Leading this growth are offshore outsourcing services, which will reach US$ 101 billion in 2010 and have been growing 20% yearly. Offshore outsourcing will soon become a US$ 300 to US$ 400 billion business.

Brazil has the eighth largest internal IT market and an IT industry that ranks among the most advanced in the world such as in finance and government systems, yet it only exports US$ 2.2 billion in offshore outsourcing services (2008). Why is a country that is so competent in meeting internal needs such a small participant in the world market?

It´s a matter of strategy. In order to export IT services, no trucks, roads or ports are needed. With current telecommunications, one needs only to press a computer key. But a simple key press is also needed for any other country to export their IT services to Brazil. The industry is undergoing such a profound transformation that exporting has become a vital necessity.

BRASSCOM was created to pursue those goals. The market is searching almost desperately for offshore outsourcing alternatives to India, which holds US$ 50 billion of the US$ 84 billion market in 2009.

More important, after many years boasting that it would become an IT power, Brazil has finally taken concrete steps to make good on that claim. The recently issued Law 11,774, which reduced labor taxes for the IT sector in an unprecedented way, was the result of a great effort, undertaken mostly under BRASSCOM´s leadership.

The challenge now for BRASSCOM and for the IT companies is to persevere in the effort to turn Brazil into one of the three greatest technology centers in the world, on a par with India and China. There are many hurdles to overcome. But with the political support we now have, we will show that we are qualified to make this project a reality.

Antonio Carlos Rego Gil
President of BRASSCOM