Information Technology in Brazil: IT services push GDP numbers up
Data from the Brazilian Institute of Geography and Statistics (IBGE) released on recently show that the information services segment increased 4.9% in 2011, high above the countrys GDP, which was 2.7%, and ahead of most activities prominence in recent years, as construction 3.6%, manufacturing industry 0.1% and trade 3.4%. In 2010, the sector had advanced 3.8%. In 2009, when GDP had a negative change, information services recorded growth above 4%. information services include the activities of telecommunications, internet, audiovisual services, publishing and information technology, which accounts for the majority of companies in the industry and about 50% of the labor force employed.
Services related to information technology are gaining an increasing participation in the economy and the outlook for those who invest in a promising career in the field below. Currently there are about 1.2 million workers in the area, whose average salary is $ 2,950, and the lack of professionals in the market is estimated at 115,000 people.
According to the Brazilian Association of Information Technology and Communication (Brasscom), the IT market grew 61% in the last three years. In 2011, the sector topped $ 96 billion, up 13% over the previous year, representing 4.4% of Gross Domestic Product (GDP). Considering also the telecommunications market, the total in 2011 reached U.S. $ 190 billion, equal to 8% of GDP.
The advancement of the IT market reflects demand for efficiency gains and quest for leaner administrative structures through outsourcing services and the incorporation of technology solutions for almost all sectors of the economy is agriculture, industry or commerce. For 2012, the industry projected growth of 12% to 13%. “One of the differences in the industry is that there is no retraction. The IT curve is slightly independent of country’s economic growth, “says Antonio Gil, president of Brasscom. He notes that technology services are demanded in both expansion projects of investment and innovation to cut costs and economies of scale.
“In recent years, we had the rise of more than 40 million people for the class C, a universe of emerging consumers that in addition to appliances, want health, education, banking and security, and there is no way to increase the supply of these services without make use of IT, “says Gil. IT may have 6.5% of GDP in 2022 volume of U.S. $ 96 billion in Brazil is the sixth largest IT market in the world, according to Brasscom. The organization predicts that in 10 years, the market will reach $ 220 billion, which may correspond to 6.5% of GDP. “We may be the fourth or fifth largest market. The IT industry in Brazil is one of the most advanced in the world. We are good at what we do. Our banking system is one of the most advanced in the world and we have a number of areas that are not effectively addressed, such as health, education and security, “says Gil.
IBGE data show that between 2003 and 2009, the number of business information services rose from 55 000 to 70 000. According to the Confederation of National Service (CNS), the sector accounts for only 7.7% of all private companies specialized services. On the other hand, the segment accounts for the largest share of net sales (28.8%), with an average revenue per company about four times higher than the level of revenue from other service companies. According to the Brazilian Association of Companies Software (ABES), only the market development, production and distribution of software and service is currently operated by about 9,000 companies, 85% of them being micro or small businesses.
The investment cost for opening a company in the genre is relatively low, primarily people and training, which encourages entrepreneurship.
“The increase in family income has been growing demand for services for the domestic market. The sector is the largest employer in the country and the fastest growing. For 2012, we expect a high of around 5%,” says Luigi Nesse, chairman of the National Services Confederation (CNS), emphasizing that all activities related to services (including trade) now account for 67% of GDP and tend to represent more than 70% of GDP in a period of up to five years.
“In the technology area, the big advantage is that every day comes a new opportunity to undertake, whether it is creating a portal, a software, an information system, an application. And, usually, just to get an idea and can gather a handful of professionals, “adds this
All these numbers don’t come without challenges: although the area of IT has been a major generator of jobs, the great challenge of the sector has been just supply all the demand for qualified professionals. Spending on labor represents about 70% of the costs of IT companies. “The country needs to create about 750 000 new jobs by 2020 to achieve the goal of responding for 6.5% of GDP,” says the president of Brasscom. Among the barriers to meet the demands of the sector, he cites the low percentage of graduates from higher education in the field of exact sciences (11%), high school dropout in IT courses, lack of basic math in elementary school and low number of professionals with domain of a second language.
These deficiencies make the Brazilian IT sector is still highly dependent on the internal market. Exports totaled U.S. $ 2.65 billion in 2011, according to Brasscom, which represents a share of less than 3% of the market. The Indian foreign markets, for example, known locally for serving companies from other parts of the globe in their call centers, is about $ 70 billion. President of Abes, Gerson Schmitt points out that, within the Brazilian software market, 79% of the programs are still developed abroad. To balance the scales, he advocates a policy of not only relief but also to promote the protection of intellectual property.
“Today we sell only services and not replicable solutions. If we follow this model, which is the Indian colony we just technological, sale of labor to commodity price,” he says. He also warns the strong trend of internationalization and concentration of the sector. “There are few large companies in Brazil and those that exist are being approached by international clients,” he says.