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Market Volume and Dynamics
2020: The IT market accounted for 5.6% of Brazil's GDP
On January 12, 2022, a study was published according to which the IT market accounts for 5.6%. In GDP Brazil 2020, the volume of this market reached 426.9 billion reais ($76.7 billion). Against the background of the coronavirus pandemic COVID-19 , the number of companies in this industry is growing rapidly.
In 2020, about 85 thousand new enterprises were created in the technology sector, which is 25.1% more than in 2019, according to a study conducted by the Technology Association of Santa Catarina (Acate) in partnership with the technology firm Neoway with the support of the Brazilian Research and Project Financing Authority (FINEP).
 | We have seen steady growth despite the pandemic. With the acceleration of digital transformation, we have increased revenues, [the emergence of] new companies and [increased] demand for personnel, "said Yomani Engelmann, president of Acate. |  |
The study notes that in Brazil, by the beginning of 2022, 422,300 companies are actively working in the IT sector. In the state of Santa Catarina, there is the highest growth in the country (63.2%) in the number of technological enterprises created between 2015 and 2020. According to the study, the growth rate in the state is significantly higher than the national average (26.1%).
However, the state of São Paulo stands out in terms of the number of technological entrepreneurs. According to the study, out of 542 thousand entrepreneurs in the IT sector of Brazil, about 197 thousand (36.4%) work in São Paulo. This is followed by Rio de Janeiro, where 50,000 IT entrepreneurs are located (9.2%), and the state of Minas Gerais, where 39 thousand entrepreneurs are based (7.2%).
The study notes that almost half of the revenues of the IT sector (48.4%) are generated in the state of São Paulo, which is approximately 206 billion reais ($36.9 billion). In terms of participation in IT sector income in 2020, São Paulo is followed by the Brazilian states of Rio de Janeiro (10%), Minas Gerais (6.3%) and Rio Grande do Sul (5.4%).[1]
2014-2015
According to IDC, in 2014, Brazil's ICT market grew by 8% compared to 2013. For 2015, analysts predict its more moderate growth - within 5%. The market volume in 2015 will reach about $165.6 billion. With this result, Brazil will be the sixth largest ICT market in the world.
The slowdown will be affected, among other things, by the volatility of the dollar against the Brazilian currency, IDC believes.
At the same time, the telecom segment is expected to grow 80% faster than the IT segment in 2015 and reach $104 billion, IDC predicts. The main drivers of this segment will be services related to mobile technologies and corporate networks.
2011
According to the Brazilian Association of Computer Technology and Telecommunications Companies (BRASCOM) in 2011, the volume of the Brazilian IT market amounted to $102.6 billion or 4.4% of GDP. Of these, IT exports, which include support and consulting in addition to software sales, accounted for $2.61 billion. These calculations are based on customs statistics and data from the tax administration of the country[2].
For comparison, the volume of the Russian IT market, according to the Ministry of Economic Development in 2011, amounted to 649 billion rubles. (about $21 billion), which is about 5 times less than Brazil. The share of the IT market in Russia's GDP (54.6 trillion rubles over the same period according to the Ministry of Finance) was at 1.2%.
The domestic association Russoft"" considers Russian IT exports without taking into account consulting outsourcing business processes and (for example, call centers, etc.). But even with these reservations, the total export amount of Russia is about 1.5 times higher than that of Brazil. Russoft speaks about the income of Russian companies from abroad in 2011 at the level of $4.1 billion.
Most significant national market players
- ITAUTEC (engaged in both personal engineering and integration, develops software for the financial sector and retail),
- TIVIT (outsourcing IT Infrastructure and, business processes system integration),
- BRQ (IT solutions and outsourcing services provider specializing in CRM, BI and ERP),
- BSI Tecnologia system integrator.
- Federal Data Processing Service, Serpro (Brazil's largest state-owned IT company)
- Dataprev (State Information Systems Developer)
According to BRASCOM at the beginning of 2012, 8520 IT companies were registered in Brazil. About a quarter of this number is directly focused on software development and service delivery. The remaining half is engaged in the commercialization of third-party products. More than 97% of Brazilian software companies are small enterprises.
The total number of IT employees according to the national association is 1 million 200 thousand people, of which 400 thousand people work directly in IT companies, and 800 thousand - on the side of customers from commercial and government structures.
Major IT Projects
Of the largest IT projects implemented in the country, Brazilian market participants highlight the creation of an electronic system for universal voting, a system for managing agricultural production, automation of exploration and production of oil and gas, as well as software for alternative fuel engines. In addition, in Brazil, electronic services for interaction between citizens and authorities are developing.
For example, Brazilians have for several years been able to submit an "electronic report" to the police without a personal presence.
National Internet of Things Program
At the end of March 2018, the Ministry of Science, Technology, Innovation and Communications (MCTIC) of Brazil announced the launch of a national Internet of Things program.
Over the past decades, Brazil has developed several programs to expand and strengthen various industries, including IT and telecommunications. One of the most famous and successful initiatives was the national Internet access programme, launched in 2010. The program provided affordable network access to all Brazilian municipalities and paved the way for many other telecommunications services and technologies that depended on this basic infrastructure.
In order to modernize public and private services, develop entrepreneurship and promote innovation, a national Internet of Things programme has also been activated. Some aspects of the program were already considered earlier in the decree of Brazilian President Michel Temer in 2017. So, as part of the development of the Internet of Things, the Internet for All will be promoted - a program re-launched in early 2018 to provide Internet access in hard-to-reach regions of the country.
But the four main aspects of the new program are agriculture and "smart cities" health care, in fact, the Internet of Things. Smart cities will become a priority project for the use of new technologies in order to improve communications, public safety and the level of public services. In this area health care , the focus will be on the treatment of chronic diseases, the prevention of epidemics, improving efficiency and reducing costs in hospitals. Similarly agricultural , in the industry, innovation will focus on the efficient use of natural resources, materials and mechanisms, as well as on sanitary control.
As part of the Internet of Things program, the implementation of which will begin in April 2018, it is planned to improve the economic situation of the country as a whole. Projects or solutions aimed at improving technology, promoting the development of new types of equipment and new business models that include the Internet of Things will be promoted.[3]
Key IT Service Consumers
The main consumers of IT services in Brazil are industry and the financial sector, which in 2011 (data as of December 31, 2011) provided 45% of the demand. Among the largest consumers in the domestic market, the oil company PETROBRAS, the aircraft manufacturer Embraer, the steel manufacturer CSN, the food company BRF Brasil Foods, banks Banco do Brasil and Itaú, etc.
Segmentation of Internal Software Market by Consumer
Smartphone Market
Proportion of residents without a smartphone
Tax burden for IT companies
According to the Russian trade representative office in Brazil for local IT companies, it totals 35% of the wage fund. This rate consists of deductions for INSS social insurance (20%) and payments to the FGTS pension fund (15%). Of the first amount, 8% is paid at the expense of the employee, and 12% is accounted for by the employer. Since Brazil is interested in exporting products, payments are reduced by 50% if you work in the foreign market.
Cooperation with Russia
Russia and Brazil intend to jointly develop software
In April 2015, the head of the Ministry of Communications Nikolai Nikiforov held a working meeting with Brazilian Minister of Communications Ricardo Berzoini as part of a visit by a delegation of the Russian department to this country. During the meeting, the ministers discussed issues of cooperation in the development and promotion of software.
Speaking about the prospects of such cooperation, Nikiforov noted the high level of import dependence of BRICS markets from the development of several global companies and proposed to combine efforts for the joint development of software in these significant markets. In turn, the Brazilian Minister of Communications expressed interest in joint development of critical types of software.
As part of the exchange of experience in creating software products and providing ICT services, the delegation of the Ministry of Communications visited the offices of the largest Brazilian state IT company Federal Data Processing Service (Serpro), as well as Dataprev, a state developer of information systems, whose clients are a number of local departments.
In addition to cooperation in the field of software development, the ministers also discussed the internationalization of Internet governance, cooperation in the field of e-government services, improving the efficiency of radio frequency spectrum management, reducing prices for international roaming, and cooperation between countries in the field of mobile and satellite communications. The meeting participants agreed to work out the issue of sharing orbital satellite positions to increase the share of Russian and Brazilian satellite telecom operators in the world market.
Ricardo Berzoini also supported the inclusion in the agenda of the upcoming BRICS summit, to be held in Ufa on July 9-10, 2015, of the topic of ICT and the holding of a separate meeting of BRICS ministers of communications.
Notes
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