The Brazilian Market: Current Aspects & Opportunities

The Country 190 million inhabitants GDP: 1,6 trillion dollars – 18% Agriculture – 28% Industry – 54% Services Area : 8,5 million km 2 Qualified as Investment Grade by all international risk evaluation agencies Creditor country – International Reserves much higher than foreign debt – 15 billion dollars invested into the IMF

The worldwide IT market

The worldwide software market

The Brazilian market

Growth at “Chinese” rates Impacted by huge foreign exchange rates variation Recent evolution Source: IDC

Public Policies Since the industrial policy, established by the current government in 2003, the software industry has been declared “strategic”  Investment in software developing habilities can be deducted for double its value from the tax basis (limited to companies operating in ‘real profit’ mode)  There is still no public plan in place for a national and integrated “digital agenda”  E-gov in Brazil mostly focused on incrementing controls the State has over the Society!  Main initiative in work by Assespro, looking to capitalize on the 2010 electoral campaign

The Opportunity: The Business Consumer Market

The Map: companies in Brazil UF Agriculture Fishing ExctractiveIndustries TransformationIndustries Utilities Construction Holseale & Reatail Hotels & Restaurants Transportatoin Finance Real EstatePublic SectorEducation Health Other Services Total SP MG RS PR RJ SC BA CE GO PE ES MT DF PA MS MA PB RN PI AL AM RO SE TO AC RR AP Total

The Local IT Industry

Creation

Activities

Partnerships

Exports Brazilian Software Exports: – High value for clients – Low revenue for the country In recent years, the biggest companies have tried to export services – Emulation of India’s business model – Limited by costs and number of human resources available

Some final observations

Big effort, since 2002, on part of various government levels – Resulted into a big growth in the number of employees at state-owned data processing companies Assespro is for “open choice” of platforms Open Source

Entry Barriers “Natural” protection – Language very different from the rest of Latin America And even Portugal! – Very complex and ‘innovative’ tax system

Human Resources Deficit is a worldwide problem Big efforts to build up new resources involving all market agents How ever, no short-term solution is available – Maybe a solution will be found if we allow for a longer period of time