quarta-feira, 1 de abril de 2009

Compelling Reasons to Invest in Digital Economy in Brazil

Brazil FlagFirst of all, we should take in account CIA’s Mapping the Global Future Report (http://www.foia.cia.gov/2020/2020.pdf), prepared by the National Intelligence Council – NIC (www.european-security.com/index.php?id=5044) that situates Brazil as one of the world’s new superpowers 11 years from now.

Still according to this report, the world’s geo-economical landscape will be totally different because of a group of six new emerging power countries composed by Brazil, Russia, India, China, Indonesia and South Africa. A good example of this new reality is that Brazil’s economy will be bigger than all European countries economies.

Moreover, China, India and Brazil will host the main bases of the multinational corporations by 2020.

Furthermore, Goldman Sacks sad that the new superpower countries block BRIC (Brazil, Russia, India and China) will be economic stronger than G7 by 2040.

Privatizations and liberalization in the 1990s attracted major inflows of private investment into the telecommunications sector, leading to an increase in fixed-line density from extremely low levels (although these remain low by international standards).

Growth of fixed-line penetration has tailed off in recent years, as cheaper mobile technology has become the major driver of increased telephony penetration among low-income users. Income is highly skewed in Brazil, and fixed-line services are accessible only to higher-earning groups. Mobile-phone penetration overtook fixed lines in 2003 and continues to experience dynamic growth, spurred by the availability of cheaper handsets (most of them manufactured locally) and the introduction of pre-pay contracts in 2001.

Brazil is by far the largest Information Communication and Technology (ICT) market in Latin America, with an industry producing computer and telecoms equipment worth over US$ 30 billion. Government policy proactively encourages the development of new technologies. Computer penetration has multiplied many times from a very low base in the past five years, and Internet penetration has also risen strongly, although both remain low by international standards.

Still Regarding the ICT scenario, the emerging Latin America countries are already positioning themselves as an outstanding choice for the new Offshoring concept called Nearshoring[1]. America Economia magazine (www.americaeconomia.com) published an interesting article about this subject, situating São Paulo City as the 2nd better place in the world for Offshoring (or Nearshoring), if the main focus are not only cost, but qualified workforce and sophistication.

Brazil is one of the most promising countries for Internet development. It has the largest market for e-commerce of goods and services in South America and is also the most important advertising online market in the region.

Finally, Brazil is doing very well concerning the Return on Investments of Foreign Investors[2], because, in the last 10 years, the average Return on Investment (ROI) in this scenario in Brazil was around 26.4%. Showing that invest in Brazil is clearly profitable. Besides, Brazil doesn’t restrict the profitability transfer to the multinational headquarters.

[1] Nearshoring – An offshoring evolution that focuses in value added services. In this scenario the geographic cultural proximities between the customer and the provider are extremely important.

[2] Foreign Direct Investment (FDI) – This is an UNCTAD’s Index that measures the amount of investment money a country receives from abroad


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