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Offshore development in Brazil @ICT - LATIN AMERICAN CONGRESS ON ICT TRENDS JAIRO AVRITCHIR

Offshore development in Brazil @ICT - LATIN AMERICAN CONGRESS ON ICT TRENDS JAIRO AVRITCHIR. About BRASSCOM. Position Brazil as one of the top five key global IT centers. VISION.

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Offshore development in Brazil @ICT - LATIN AMERICAN CONGRESS ON ICT TRENDS JAIRO AVRITCHIR

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  1. Offshore development in Brazil @ICT - LATIN AMERICAN CONGRESS ON ICT TRENDS JAIRO AVRITCHIR

  2. About BRASSCOM Position Brazil as one of the top five key global IT centers. VISION Spread the excellence and innovative capabilities of IT to other sectors, increasing Brazilian economy’s productivity and quality. MISSION

  3. BRASSCOM’s Agenda INSTITUTIONAL National Councils Public Relations Strategic Initiatives Market Strengthening HUMAN RESOURCES & EDUCATION INFRASTRUCTURE & DIGITAL CONVERGENCE MARKET DEVELOPMENT REGULATORY Promoting Brazil’s potential in the IT-BPO sector Branding Market Research Publications Competitive, fair and ethical IT-BPO sector environment Reduce the cost of doing business in Brazil Educational programs aligned with the IT-BPO sector Long-Term: Curriculum Short-Term: Training Programs Infrastructure investments to support the IT-BPO sector Foster innovation Legislation and Taxes, International Agreements, IP & Piracy Control Technical Education, English Education, Talent Mapping, Career Promotion Broadband, Digital TV, Mega Events, IBCD, Innovation Demand Generation, Promotional Events, Roadshows, Media & Web BRASIT IT 2020 STRATEGIC PLAN • Outsourcing Law • Payroll and Taxes • Ethics Code • Government Procurement • Technological innovation • System “S” • Educational Portal • PcD’s • IFET’s • Distance Learning • National Broadband Plan • World Cup 2014 • Olympics 2016 • LAN • Digital TV • Global IT Forum • 2010-2011 IT-BPO Book • International Conferences • Roadshows 2011 PRIORITIES

  4. The Brazilian ICT Market ICT MARKET (2010E, US$):TOTAL IT 68,4 BiCOMMUNICATIONS 75,9 BiTOTAL 144,3 Bi Source: Brasscom 3,5

  5. The Brazilian IT-BPO Offshore Market IT-BPO Exports By Services (2008) Application Services 73% Infrastructure Services 16% Others 11%

  6. Opportunities and Challenges Market growth 2010 2020 Total Market: US$ 1,5 tri US$ 2,1 tri Additional opportunities: - US$ 900 bi Offshore: US$ 100 bi US$ 500 bi Brazilian perspective: US$ 68,4 bi US$ 150 bi – US$ 200 bi Sector’s share in the GDP 3% 5,5% a 6% Manpower Lower costs Innovation Infrastructure

  7. Why offshore to Brazil? The big elephant is the room: Is Brazil expensive today? No, and this is not a simplistic price/per hour decision

  8. The USD depreciated against many currencies last 5 years

  9. Diversification reduces geopolitical risk 9 May 2011 More than twenty thousand people have gathered in the centre of Mexico City to protest about the large number of deaths caused by drug-related violence and the government's response to it. The rally in the capital's main square completes a four-day protest march led by the poet, Javier Sicilia, whose son was killed earlier this year.

  10. Total Cost Competitiveness • Optimized On-Shore / Offshore Ratio • Time zone: • Real-time communication • Enables follow-the-sun support with Asia • Near shore: Lower management / travel costs • High Productivity • Industry / Business knowledge • Cultural compatibility • Low-turnover rates • High Quality • Lee expenses with rework

  11. Economic Strength and Stability • 7th Largest Economy in the World and 1st in Latin America • 2010 GDP: US$ 2.1 T 2011 Expected GDP growth: 5% • FDI 2010: US$ 48.5 B 2011 Expected FDI: US$ 45 B • Industry Power • Top multinationals have been in Brazil for decades – IBM: 1917; J&J: 1933 • 4th largest manufacturer of aircrafts; 6th largest manufacturer of automobiles • World’s top 5 in regulation of securities and exchanges • Strong and diversified IT market: world’s 7th largest domestic ICT market • 34 Brazilian companies in the Global Fortune 2000: Petrobras, Embraer, Vale, CSN, Gerdau, Aracruz, Suzano, Brazil Foods, Inbev, Itau/Unibanco, Bradesco, among others • Food and Energy Power • World’s leading exporter of coffee, soy beans, beef, poultry, sugar, orange juice, iron, ethanol • World’s 2nd largest biofuel and 9th largest oil producer; 30+ billion barrels reserves (pre-sal) • Self sufficient in energy; 85% comes from renewable sources Sources: Economist Intelligence Unit, IMF, World Economic Forum

  12. Key IT-BPO Verticals 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 • 403 million cards in the market (credit and debit) • 32,3 billion bank transactions Manufacturing, Retail and Services • Intensive use of ERP, BI, SCM, R&D systems, CRM and e-commerce Oil &Gas E-Government • Electronic Voting System • Online Tax Returns • Energy, Food & Commodities Telecom, Healthcare EXPERIENCE AND CAPACITY TO INNOVATE SET BRAZIL APART

  13. Solid Infrastructure and Human Capital Infrastructure Human Capital and Education Technology Parks Strong Telecom • Country wide network access • 203 million mobile phone lines • 31 million broadband connections • Strong Energy • Best among emerging countries • Leader in renewable clean energy: • biofuels and hydroelectric power • Strong Transport • World’s 2nd largest in airports - 35 international / 33 domestic • 880 weekly-international flights • Highly Skilled Workforce • 1.7 million IT professionals • Recognized for their knowledge, commitment and flexibility • 100,000 new professionals / year • Educational Programs • 2.314 Universities among Federal, State and Private (MEC, 2009) • 5 million undergraduate students (MEC, 2009) • 4.355 undergraduate courses related to IT sector (MEC, 2008) • 464 thousand opportunities in technical education (MEC, 2008) 9 2 13 17 12 16 14 1 6 11 7 10 18 15 5 8 4 3 • Campinas • Londrina 1 10 • Porto Digital • Rio de Janeiro 2 11 • Tecnopuc • Uberaba 3 12 • Sao Leopoldo • Sergipe 4 13 • Alfa Tech • Sao Carlos 5 14 • Petropolis • Iptec 6 15 Growth Acceleration Plan (PAC) US$ 500 B - 2011 to 2014 Brazil Ranks 17th in Scientific Research Worldwide • Univap • Itajuba 7 16 • Valetec • Brasilia 8 17 • Paraiba • Curitiba 9 18

  14. Cultural Landscape – a very diverse country 92.7million Afro-Brazilians 25million Italian-Brazilians 18 million German-Brazilians 15 million Hispano-Brazilians 10 million Arabic-Brazilians 1.8 million Polish-Brazilians 1.6 million Japanese-Brazilians

  15. Government Support Strategic sector for the Brazilian Government • Law 11774: 50% reduction on social security tax on payrolls- (contingent on export targets) • Law 11908: 200% income tax deductions for the amount spent on training and R&D • Tax deductions on technology transfers, licenses and royalties • Fiscal incentives for special projects, such as reduction of Property and Service Tax • Training programs’ financing, certifications and innovation programs • E.g. Pronatec, FIES • Edital MCT/SETEC/CNPq Nº 75/2010 – RHAE Pesquisador na Empresa • Edital “Doutor na Empresa”; • Decretos Nº 16.961 e 16.736, Porto Alegre

  16. Thank You! Jairo.avritchir@brasscom.org

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