With The Economist in Brazil this week focused on where Brazil is heading in the next decade, IT Decisions is commenting on a series of points raised during discussions in our LinkedIn forum. This section summarises the past few articles and issues a call to action for everyone in the IT industry in Brazil today… Click here for the complete State of Brazil IT report.
The latest data from the Economist Intelligence Unit (EIU) predicts that Brazil is about to overtake the United Kingdom to become the world’s sixth largest economy – measured by GDP. This is an historic milestone and leaves France and Germany as the only European nations that are still economically stronger than Brazil.
However, the EIU predicts that by the end of this decade things will look very different. The top five countries in the world ranked by GDP will be China, USA, India, Japan and Brazil, in that order. Where did Europe vanish? Now look at the predictions for Brazil – a high-ranking player, up there with the USA and China.
Obviously, ICT is going to be instrumental in realising this ambition. The ICT industry in Brazil is already huge, but is largely inward facing. Once that expertise starts getting applied to the world, there will be very little that can prevent Brazil becoming a hi-tech superpower, in just the same way India earned their reputation as an IT giant in only the past decade.
But as IT Decisions has outlined in this series of articles, there are obstacles ahead. Brazil has an enormous opportunity to be one of the top market players globally in ICT, but there is a need to focus on several key areas so this can happen.
- The World Cup and Olympics: with only three years left to go, there needs to be an immense push right now to ensure the infrastructure is going to be ready and enough people will be trained.
- The skills gap: the enormous economic growth and opportunities in Brazil are leading to a distinct skills gap in IT. The government is taking notice, but almost all the planned solutions are focused on the long term with no attention paid to the immediate crisis (see previous point).
- Exporting services: Tax breaks are being introduced, but the government continues to tinker at the edges of tax and export policy. A complete analysis is required to determine how the government can better support twenty-first century companies exporting services and products on the Internet.
- Outsourcing: the fact that employment law has not been updated for decades in Brazil – and as a result hazy gray areas have been left over outsourcing, freelancing and short-term contracts – is a disgrace. The government has created an outsourcing commission to address this, but this journal has yet to see their proposed scope for reform or projected dates for recommendations.
- English training: Brazil uses Portuguese as a national language and English is not required in most jobs, but if the IT industry is going to take advantage of global opportunities, the industry must ensure there are more English speakers. At present, government English programs are focused on people who will interact with tourists – not IT professionals.
This material is not intended as a criticism of the government, Brasscom, Apex Brasil, or any of the other agencies or bodies mentioned throughout the series of comments. IT Decisions operates within the same industry and remains optimistic about the enormous opportunities available for Brazil IT. We are offering an independent, unbiased voice into the forum – and hopefully, helping to steer legislators in the right direction – along with other organisations.
The most important issues that we at IT Decisions believe should be addressed soon are:
Migration: to avoid losing momentum it would be advisable to create a temporary scheme of migration, allowing highly skilled workers with genuine experience and qualifications in IT to come and work in Brazil. Work visas could be offered on a limited basis only, and the programs of long-term skills generation should continue. This migration of highly skilled IT workers would help to prevent a lack of IT resource over the critical three years to 2014.
Outsourcing practices: as mentioned throughout this report, the government outsourcing commission needs to announce their scope, targets, and projected dates for reporting recommendations to parliament. There are too many shady practices taking place because the law around contracting is not defined – this must not be allowed to just get lost in the long grass.
English training: there was an English training program for IT workers back in 2006. It was dropped this year because there was not enough cash to scratch the surface of what needs to be done, and it was not designed around international standards. If Brazil is serious about the hi-tech economy going global then there needs to be a plan, and budget, for a new program of training – even if it is just partially funded, with companies or individuals making up the final amount.
Brazil has an IT industry that is world beating in many industrial domains, with highly skilled and creative people. This industry now has the opportunity to go global and lead internationally. This will not be achieved by offering low-cost resource to wealthy nations; Brazil has some of the best technical expertise in the world and will succeed by being the best, not the cheapest.
But the fast moving demands of a global information society often rub against the more bureaucratic elements of Brazilian society; where executives are used to spending hours lining up in cartorios (notary offices) for an official paper to be stamped; where it can take months to incorporate a limited liability company; and where taxes and tariffs can destroy the value of any cross-border transactions. These realities deflate the dreams of many entrepreneurs.
As the recent research from Brasscom has highlighted, Brazil has the opportunity to lead a global industry focused on information technology that will not only create wealth for a few; it will generate jobs and wealth for millions of citizens, helping to ensure Brazil achieves that goal of being the fifth most wealthy economy in the world by 2020.
Here is to the decade ahead, the decade of Brazil IT!
Photo by Rodrigo Huerta licensed under Creative Commons