Scenario deserves attention, especially in a global context in which technology and innovation are essential for economic growth
*Per Evelin Priscilla Trindade
Internationalization is a topic that is relevant to companies all over the world. With remote access, it is becoming increasingly easier to compete with companies located geographically far away. However, in order to survive, they must take advantage of opportunities that go beyond those offered in the market of the country in which they are located.
When analyzing the numbers of the Brazilian software sector, it is possible to see that internationalization deserves attention, especially in a global scenario in which technology and innovation are essential for economic growth. However, this journey is not without its challenges.
According to data from ABES (Brazilian Association of Software Companies), presented in the Digital Market Study launched in 2024, the global Software and Services market in 2023 was US$1.8 billion, with Brazil's domestic market being US$1.8 billion, representing approximately 1.51 billion of the global Software and Services market.
Still analyzing the sector data, of the total US$26.863 billion dollars, the software market represents US$15.260 million (56.8%) and the services market represents US$11.603 (43.2%).
From this universe with a timid export market of just US$$809 million in 2023. Being US$$225 million for Software (0.84%) and US$$584 million for services (2.2%).
But why are our software and services export figures so small when compared to the sector's international market, which is worth US$1.8 billion?
The first explanation is that Brazilian software and services companies have focused their efforts on the domestic market for decades. This reality needs to change, as it limits their revenue potential to the Brazilian market, which, as previously shown, represents only 1.5% of the global market in the sector. In addition, there are barriers that Brazilian companies must overcome.
The first barrier that Brazilian companies face is linguistic and cultural, as the fluency and proficiency of Brazilian IT professionals can vary and affect communication in international negotiations.
Some other factors that Brazilian IT companies need to overcome to be successful in their internationalization strategy are:
- Find business opportunities abroad;
- Establish contacts with customers in the foreign market;
- Find information for analysis of the external market;
- Managers' time to research and analyze options for entering the foreign market;
- Government support (bureaucracy and tax burden) and;
- Lack of capital to finance export strategies.
When compared to the market with companies from India, a country that is also emerging and recognized for the “export” of talent in technology, it is clear that the country's strategies were focused on the international market, both in the preparation of qualified labor and also in the tactics of Indian technology companies.
Studying the history of the IT sector in both countries, it can be said that the biggest difference was in the strategy of IT companies and professionals in India to focus on the external market and IT companies and professionals in Brazil to focus on the domestic market.
Despite the challenges and the history of Brazilian companies in the sector, this situation is currently changing. It is increasingly common to find news such as: “Labor shortage drives Brazil as the 'new India' in the technology sector” (fusoesaquisicoes.com, October 20, 2024) or even “Brazil is the new India in providing technology services abroad (O Globo, October 2024).
These articles treat Brazil as the new global hub for technology, comparing our professionals in the field to the renowned Indian talents. This change occurred because of the pandemic, a situation in which Brazilian service providers faced fewer difficulties than those of Indian origin, in addition to the quality of our workforce, cultural affinity with other regions of the planet and smaller time difference.
By focusing on specific solutions, Brazilian companies can differentiate themselves and create a stable demand in international markets. The internationalization of Brazilian software companies is a promising path, with challenges but also great opportunities. The talent of Brazilian companies and workforce, combined with effective joint strategies between government, companies and educational institutions, can transform Brazil into a major exporter of technological solutions.
*Evelin Priscila Trindade is a researcher at Think Tank ABES, a postdoctoral fellow since 2023 and a PhD in Engineering and Management since 2021.Knowledge from the Federal University of Santa Catarina (UFSC), with a focus on the internationalization of knowledge-intensive companies.
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
Article originally published on the IT Forum website https://itforum.com.br/colunas/empresas-brasileiras-software-mercado-internacional/
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