Brazil IT: Regional Leader, Global PlayerValue Beyond Expectations
CeBITMarch 2011
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
INSTITUTIONAL
Competitive, fair, and ethical IT-BPO sector environment
REGULATORY HUMAN RESOURCES& EDUCATION
INFRASTRUCTURE & INNOVATION
MARKETING & EXPORTSPROMOTION
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
Institutional Relations Strategic Plans Public Relations
VISION Position Brazil as one of the top 3 key global IT centers
MDIC MCT
Productive Development Policy (PDP) Growth Acceleration Plan (PAC)• Industrial and Technological Development and Trade Policy• Investments in innovation for sustainable economic growth• Strategic areas: ICT, Energy, Healthcare, Biotechnology, Nanotechnology, Defense
• 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
The Brazilian IT-BPO Market
Source: Brasscom, IDC TOTAL ICT SPENDING ACCOUNTS FOR 7% OF BRAZIL’S GDP
US$
BIL
LIO
N
0
1
2
3
4
5
6
7
8
9
10
ICT MARKET
0
1
2
3
4
5
6
7
8
9
10
5
IT Spending 2009 US$ 31 Billion
0
1
2
3
4
5
6
7
8
9
10
The Brazilian IT-BPO Market - OffshoreUS
$ BI
LLIO
N
Application Services 73%Infrastructure Services 16%Others 11%
IT-BPO EXPORTS
6Source: Brasscom, IDC
The Brazilian IT-BPO Market vs LATAM
Source: Gartner – Emerging Market Analysis, IT – Brazil – July 2010 7
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
EXPERIENCE AND CAPACITY TO INNOVATE
SET BRAZIL APART
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
Telecom, Healthcare
8
The Brazilian IT-BPO Market
Brazil’s Value Proposition
9
BRAZIL’S VALUE PROPOSITION
FAVORABLE BUSINESS ENVIRONMENT
STRONG RESOURCES AND INTELLECTUAL CAPITAL
CULTURAL AFFINITY
TOTAL COST COMPETITIVENESS
Brazil – Economic Strength and Political Stability
Industry PowerTop multinationals have been in Brazil for decades – IBM: 1917; GE: 1919; J&J:19334th largest manufacturer of aircrafts; 7th largest manufacturer of automobilesWorld’s top 5 in regulation of securities and exchanges30+ 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 PowerWorld’s leading exporter of soy beans, beef, poultry, sugar, orange juice, iron, and ethanolA global reference in the production of renewable energy: biofuels and hydroelectric powerWorld’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
8th Largest Economy in the World and 1st in Latin America2009 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
10
Brazil – Emerging Market Innovation
Brazil – Case Studies
12
Highly Skilled Workforce 1.7 million ICT professionals Recognized for their knowledge, commitment and flexibility 100,000 new professionals / year
Educational Programs 2,281 Universities among Federal, State and Private (MEC, 2006) 6 million students (MEC, 2006) 1,714 academic programs related to ITO-BPO sector More than 250 new public technical schools will be created by the end of 2010 (MEC, 2008)
17
10
92
13
12
1416
15
6
4
5
111
83
187
1
2
3
4
5
6
7
8
9
Campinas
Porto DigitalTecnopuc
Sao LeopoldoAlfa Tech
PetropolisUnivap
ValetecParaiba
10
11
12
13
14
15
16
17
18
Londrina
Rio de JaneiroUberaba
SergipeSao Carlos
IptecItajuba
Brasilia
Curitiba
Infrastructure Human Capital and Education Technology Parks
Strong TelecomCountry wide network access184 million mobile phones (2010)15 million broadband (2009)
Strong EnergyBest among emerging countriesLeader in renewable clean energy: biofuels and hydroelectric power
Strong TransportWorld’s 2nd largest in airports - 34
international / 35 domestic881 weekly-international flights (2009)
Sound Infrastructure and Human Capital
Growth Acceleration Plan (PAC) US$ 300 B - 2007 to 2010US$ 200 B - 2011 to 2013
Brazil Ranks 17th in Scientific Research Worldwide
13
92.7 million
Afro-Brazilians
18 million
German-Brazilians
15 million
Hispano-Brazilians
10 million
Arabic-Brazilians
1.8 million
Polish-Brazilians
1.6 million
Japanese-Brazilians
25 million
Italian-Brazilians
Cultural Landscape
High Productivity Industry / Business knowledge Cultural compatibility Low-turnover rates
High Quality Low levels of rework
Total Cost Competitiveness
Optimized On-Shore / Offshore Ratio Timezone: Real-time communication Nearshore: Lower management / travel costs
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 subsidizedTraining programs’ financing, increasing certifications and innovation
16
Thank You