Brazil presents opportunities for IT companies rather than just being a low-cost outsourcing location as previously believed. While bureaucracy can be challenging, Brazil has a large and growing IT market with $165.7 billion spent in 2010. With 8 million new professional jobs predicted between now and 2015 and major sporting events like the World Cup and Olympics driving infrastructure investment, Brazil offers partnerships and acquisition opportunities for global IT companies as the country becomes a more important economy.

1. A Brit in Brazil: A few myths and
a wealth of opportunity…
Mark Hillary: CEO of IT Decisions
Embassy of Brazil
London, January 20, 2012

2. Agenda
• Outline of Brazil
• IT myths
• The famous bureaucracy
• Opportunities

3. A Brit in Brazil j.mp/markhillary
• Seven books about technology and
globalisation so far, next is on Twitter
• Running IT Decisions in São Paulo, focused
on tech research, analysis, advice,
consulting… very close to Brazil CIOs
• Blog for Huffington Post, Reuters etc…
shortlisted for ComputerWeekly business
blogger of the year award in 2009 and 2011

4. Think back to 2005
• Tom Friedman sold
millions of books
explaining the
globalisation of services
• Focus was on the back
office services,
outsourcing, offshoring,
nearshoring…. Often
involving labour arbitrage

5. BRICs
• I explored the
BRICsand offshoring
in 2007
• I also wrote another
book that year with Dr
Richard Sykes of
Intellect, commenting
on the global flow of
services

6. Global Services
• This was 5 years ago,
but we showed that
global IT is a lot more
complex than just
cheap offshore
offshoring…
• Locations such as the
UK can contribute just
as much as India – ask
Richard today, he will
tell you!

7. Most predictions were wrong…
• Focused on the Friedman view that new
markets were opening up and would
become the global ‘back office’ for EU
and US firms…
• Global crash changed growth
expectations
• Brazil now looks like a market that
should be explored for partnerships –
not a back office

8. Myths of IT in Brazil
• It’s not cheap and ‘offshore’ – one US
company boss recently told me his IT staff
are lower cost back in the US
• It’s not a market created only by the IT boom
since the millennium
• $165.7bn ICT spend in 2010 with only
$2.4bn of services exported
• There are several industry sectors where
Brazil has outstanding world class resource
– banking, mining, oil & gas… and the IT
expertise supporting these industries!

9. Economic changes
• The world is changing – you can see this
in the news from the US and EU each day
• EIU predicts by the end of this decade,
the new world order in GDP will be:
China, USA, India, Japan, Brazil
• Just this month, Brazil’s GDP grew larger
than the UK

10. Need a job? Try Brazil…
• Prediction of 8m new professional job
openings from now to 2015
• 1.9m new jobs that were created in 2011
• 34,000 job openings in IT alone in 2012
• Lowest unemployment (6.7%) in recent
history
• 40,000 graduates of engineering each year,
but industry needs three times as many!

11. Changing Class Class A = > £3300 pm … class E = < £370 pm
2003 2009 2014
AB 13 20 31
C 66 94.9 113
DE 96 73.3 59
29 million entered class C between 2003 and 2009
In the period to 2014, class A and B will grow by 50%
Source: Social Policies Centre of FGV-Rio

12. Bureaucracy
• Paperwork needed for foreigners to reside in
Brazil can be a headache, even when
married to a local
• A company can be started quite easily, but
does require paperwork (at least 15
documents) and many cartorio (notary)
visits
• Different regulations at federal, state, and
municipal level means you need good advice
– and you have to trust your accountant!

13. Bureaucracy
Concept of proving identity
with just a passport or
other single document is
quite alien in Brazil… leads
to some Kafkaesque
situations…

14. Opportunities
• In 2010 CapGemini bought a controlling
stake in CPM Braxis
• In 2011, Indra bought Politec
• Other IT firms being watched –
Brasscom chief approached ‘every week’
by companies keen on IT M&A
• Remember those spending numbers,
almost $200bn on ICT in 2010…

15. Opportunities
FIFA World cup 2014 and Rio Olympic
games 2016 – investment in £
Hospitals
Energy
Security
Stadiums
Ports/Airports
Sanitation
Hotels
Urban Transportation
0.00 5.00 10.00 15.00 20.00 25.00 30.00

16. Summary
Brazil is a market to work with, not a low-
cost offshore outsourcing location
Global IT players all there now
Many local IT firms already being snapped
up or entering partnerships
Bureaucratic, but can be worked around
with good advice
With the EU turmoil, where better to be
working?

17. Mark Hillary
There is now a panel
session for Q&A
------
But if you want to stay
in touch, you can find
me here:
www.markhillary.com
twitter.com/markhillary