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Reader Forum: IT as a driver of economic development and innovation in Brazil

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Brazil has emerged as the world’s sixth-largest economy and is expected to become the fourth in a few decades. It has achieved economic and political stability, and institutional maturity, and it is undergoing a broad and fast-paced expansion and a dramatic socioeconomic transformation. Besides its wealth in natural resources, the country also has a very innovative and diversified economy, and it exports sophisticated products.

Brazil’s innovative ICT sector is a key catalyst for economic development and global competitiveness. With a turnover of U.S.$213 billion in 2011—or 8.5% of the country’s GDP—the Brazilian ICT market is the world’s fifth-largest, growing at an average of 10% per year. Our advanced IT systems in finance, e-government, flex-fuel engines, telecommunications, agricultural production management, oil and gas reserves, visualization and manufacturing automation are assets in a global economy and contribute to productivity gains in several economic sectors.

It is perfectly possible that Brazil will leap from the fifth to the third-largest ICT market in the next decade, as the industry has scale, business knowledge, technical expertise, and capacity for innovation. Moreover, there are still areas where technology could play a more intensive role, such as healthcare, education and government efficiency. With an additional 52 million Brazilians entering the middle class in the next ten years, there will be new demands in those areas, and traditional technologies will most likely not be able to provide solutions at the scale needed.

This is a huge opportunity for the development of solutions based on technology, such as cloud computing, mobility, social media, clean tech and big data. Over the next few decades, the international scenario will see several changes that will also boost the growth of Brazil’s ICT market, since emerging markets will have increasing global importance as well as a large contingent of the population at an economically active age.

However, the country still needs to overcome some challenges in critical areas, such as labor costs, infrastructure, and education. The public and private sectors are playing important roles in addressing these issues and boosting the ICT sector. A recent law replaced the 20% social security contribution tax on payroll with a 2% tax on revenue for software and IT service companies, resulting in a 10% to 12% reduction in labor costs. Companies can shift these savings to R&D and human capital investments.

Even though the labor pool in Brazil has more than 1.3 million professionals, the country needs a scalable training system to prepare the human resources required to keep up with the country’s rapidly growing economy. With the support of the Ministry of Science, Technology and Innovation (MCTI), this month Brasscom launched a training program for young people in IT programming, promoting social inclusion. Run through e-learning, the courses are free and aim to train 50,000 students by 2015. The goal is to foster technological talent through interactive educational tools, setting objectives that result not only in qualification and certification but also in information sharing and networking. The federal government is also financing technical education for 8 million students as part of the National Access to Technical Schools Program (PRONATEC).

These issues will be covered during the 2012 Brasscom Global IT Forum, our annual conference. The conference will discuss IT as a driver of economic growth and IT excellence as a global competitive advantage; the outlook for the Brazilian IT sector and its key role in the country’s development strategy; actions that the government and private sector can take to fuel productivity and innovation; and the opportunities and challenges that lie ahead for the country to become a frontrunner in today’s competitive global IT market.

The global scenario creates great opportunities for Brazil to consolidate its increasing importance on the global stage. A strong ICT sector can fuel the country’s development, and Brazilians seem to have understood that. Government, academia and the ICT sector can now collaborate to create even stronger IT business models.

Antonio Gil is the president of Brasscom (Brazilian Association of Information Technology and Communication Companies) and a member of the Brazilian government’s National Council of Economic and Social Development.

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