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Market Size and Dynamics
2020: 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 2020, the GDP Brazil volume of this market reached 426.9 billion reais ($76.7 billion). Against the backdrop 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 Santa Catarina Technology Association (Acate) in partnership with the technology firm Neoway with the support of the Brazilian Research and Project Financing Authority (FINEP).
 | We are seeing 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 Yeomani Engelmann, president of Acate. |  |
The study notes that in Brazil, by the beginning of 2022, 422,300 companies are actively operating in the IT sector. The state of Santa Catarina has seen the highest growth in the country (63.2%) in the number of technology businesses established between 2015 and 2020. The state's growth rate is well above the national average of 26.1%, according to the study.
However, the state of São Paulo stands out in terms of the number of technology 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 (9.2%) are located, and the state of Minas Gerais, where 39 thousand entrepreneurs (7.2%) are based.
The study notes that almost half of the IT sector's revenues (48.4%) are generated in the state of São Paulo, which is approximately 206 billion reais ($36.9 billion). Sao Paulo is followed by the Brazilian states of Rio de Janeiro (10%), Minas Gerais (6.3%) and Rio Grande do Sul (5.4%) by the share of participation in the IT sector's income in 2020[1]
2014-2015
According to data, in IDC 2014, the ICT market Brazil 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 decline in growth will be affected, among other things, by the volatility of the dollar against the Brazilian currency, according to IDC.
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, Brazil's 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 IT market in Russia 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 for 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, Russia's total exports are about 1.5 times higher than Brazil's. Russoft talks about the income of Russian companies from abroad in 2011 at the level of $4.1 billion.
The most significant national market players
- ITAUTEC (engaged in both personal equipment and integration, develops software for the financial sector and retail),
- TIVIT (outsourcing IT infrastructures and, business processes system integration),
- BRQ (IT solutions and outsourcing services provider specializing in CRM, BI and ERP),
- system integrator BSI Tecnologia.
- Federal Data Processing Service, Serpro
- Dataprev (state developer of information systems)
According to BRASCOM at the beginning of 2012, 8520 IT companies were registered in Brazil. About a quarter of this number are focused directly 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 businesses.
According to the national association, the total number of IT employees is 1 million 200 thousand people, of which 400 thousand people work directly in IT companies, and 800 thousand are on the side of customers from commercial and government structures.
Major IT projects
Among the largest IT projects implemented in the country, Brazilian market participants highlight the creation of an electronic universal voting system, an agricultural production management system, automation of oil and gas exploration and production, as well as software for alternative fuel engines. In addition, electronic services for interaction between citizens and government agencies are being developed in Brazil.
For example, Brazilians have been able to submit an "electronic report" to the police without personal presence for several years.
National IoT Program
In late March 2018, Brazil's Ministry of Science, Technology, Innovation and Communications (MCTIC) announced the launch of a national IoT 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 program, launched in 2010. The program provided low-cost network access to all Brazilian municipal institutions 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, the national Internet of Things program was also activated. Some aspects of the program had already been addressed earlier in a 2017 decree by Brazilian President Michel Temer. Thus, 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 smart cities, health care, agriculture and, 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 utilities. In health care, the focus will be on chronic disease management, epidemic prevention, efficiency improvement and cost reduction in hospitals. Similarly, in the agricultural sector, 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, 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 technologies, promoting the development of new types of equipment and new business models that include the Internet of Things will be promoted.[3]
Key consumers of IT services
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 demand. Among the largest consumers in the domestic market, oil company PETROBRAS, aircraft manufacturer Embraer, steel producer CSN, food company BRF Brasil Foods, banks Banco do Brasil and Itaú, etc.
Internal Software Market Segmentation by Consumer
Smartphone market
Proportion of residents without a smartphone
Tax burden for IT companies
According to the Russian trade office in Brazil for local IT companies, it totals 35% of the wage fund. This rate consists of social security contributions to INSS (20%) and payments to the FGTS pension fund (15%). Of the first amount, 8% is paid at the expense of the employee, and 12% falls on the employer. Since Brazil is interested in exporting products, in the event of work on the foreign market, payments are reduced by 50%.
Cooperation with Russia
Russia and Brazil intend to jointly develop software
In April 2015, the head of the Ministry of Telecom and Mass Communications Nikolai Nikiforov held a working meeting with the Minister of Communications of Brazil Ricardo Berzoini as part of the visit of the delegation of the Russian department to this country. During the meeting, the ministers discussed cooperation in the field of software development and promotion .
Speaking about the prospects for such cooperation, Nikiforov noted the high level of import dependence of the markets of the BRICS countries on the development of several global companies and proposed to unite efforts for joint software development 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 management, cooperation in the provision of e-government services, improving the efficiency of radio frequency spectrum management, reducing prices for international roaming, cooperation of countries in the field of mobile and satellite communications. The meeting participants agreed to work out the issue of joint use of 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, which is to be held in Ufa on July 9-10, 2015, of ICT topics and a separate meeting of BRICS communications ministers.
Chronicle
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Notes
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