By Jorge Sukarie, president of ABES
The year 2014 promises to be a challenging year for Brazilian entrepreneurs in the IT sector, with carnival out of season, which this year fell in March, the World Cup and the Elections. The market must also closely monitor the country's economy, which will need to prove its strength to maintain credit ratings (ratings) of Brazil with international institutes and, mainly, credibility with investors who have been skeptical about the country's economic performance due to the latest government actions and the increase in popular demonstrations.
A domestic market of over US$ 25 billion, the Brazilian Software and Services sector is growing rapidly, but still faces challenges that impede its ability to fully develop and compete. As if all the points above were not enough, we still live with an extensive bureaucracy in the country; high and complex tax burden; lack of manpower and training that place us among the countries with the lowest level of competitiveness in the world. According to the 12th Global Information Technology Report, released by the World Economic Forum, Brazil ranks 60th in the ranking of competitiveness in the IT sector, which assesses the influence and impacts of ICT on the development of 144 countries.
Innovation is a strategic point for the IT market that must be treated more closely among entrepreneurs. Without innovation, we will not be able to have attractive products that generate interest in the international market, and in this regard, Brazil has not been efficient either. The country ranks 64th in the Global Innovation Index, out of a list of 142 countries, according to a study by the World Intellectual Property Organization (WIPO) with the University of Comell (USA) and the French business school Insead. To support the sector and help change this scenario, ABES created, in 2013, an Innovation and Development department, which is encouraging partnerships and benefits to offer resources to encourage the growth and development of technology in the country.
From a legislative point of view, ABES works with government parliamentarians to ensure that the Bills under discussion in Congress are aligned with the interests of the sector, such as the Civil Rights Framework for the Internet, legislation on the ISS (Service Tax) and clarification on the importance of freedom to choose the software platform in public tenders. The entity is also actively participating in discussions with the MCTI (Ministry of Science, Technology and Innovation) on the evolution of the Strategic Program for Software and Information Technology Services (TI Maior) and its developments and results.
Despite all these challenges that the national Software and Services market presents, Brazil is still one of the few countries with great growth potential, which is currently experiencing the effects of “demographic bonus”, with most of its economically active population and an extraordinary increase in consumption, as a result of social ascension for the middle and upper classes, which is estimated to jump from 153 million consumers in 2013 to 196 million by 2023.
The IT sector in particular directly benefits from this enormous potential of the Brazilian economy and has demonstrated this with its double-digit growth every year over the past decade, since we launched the first Annual Study on the Brazilian Software and Services Market, in 2004. The trend is that this growth in the sector will continue to be much higher than the increase in Brazil's GDP and it will be up to entrepreneurs in the sector to take advantage of this opportunity.
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