Information Technology accounts for some 5% of the total Gross Domestic Product (GDP) in Brazil, handling some BRL 300 million (USD 93 million) per year. The country currently dominates 46% of the Latin American market and is one of the seven largest markets in the world. There are so many possibilities that the sector remains prosperous, even in the general economic and political crisis that has destabilised the Brazilian economy in recent years. The forecast for 2016 is that this segment shall grow by 2.6%. Check out some of the country’s highlights within this universe:
TELEPHONE AND INTERNET
Brazil is the fifth largest market for the Internet and for mobile telephones in the world, and there is still plenty of room for growth in the country; only half the population has Internet access in the country while just over half the people have a smartphone. Together with this, the fact is that the Brazilian population is one of the most connected in the world.
According to data released by the American risk capital company Kleiner Perkins Caufield & Byers (KPCB), Brazilians stay on the computer for 146 minutes every day, together with 149 minutes on their smartphones and 66 minutes on tablets, putting Brazil in fourth position in the world. It therefore comes as no surprise that companies such as Facebook, Twitter and Google consider Brazil to be one of their largest markets.
Within the universe of start-ups (business ventures in the technology area), the figures are also at full throttle. The resources injected have grown at a rate of some 30% per annum since 2011 and now surpass the total of USD 1.3 billion, according to the Latin American Venture Capital Association (Lavca), an organization that specialises in the Latin American economy. Last year alone, more than a thousand new companies with high growth potential were established in Brazil, this figure being 30% higher than that of 2014. The investments made in the segment came to about USD 150 million in the second half of 2015.
According to the Brazilian Startups Association (ABStartups), Brazilian start-ups have been mainly in areas such as SaaS (Web applications), education, the Internet, communication, and media, but there are also many venture developers interested in areas such as mobile applications, finance and entertainment. In the financial segment, there are over 130 companies that offer services such as financial management, loans, insurance, bitcoins and blockchains. According to a study published this year by FinetechLab, half these developments had a return of more than 280 thousand dollars, and one in five has more than 20 employees.
Even with a declining GDP, the e-commerce and Internet segment grew by 21% last year, according to a research study conducted by BigData Corp. at the request of PayPal. Online sales should rise by some 8% up to the end of 2016. In the first half of this year, such sales involved a volume of BRL 19 billion (USD 5.92 billion), according to EBIT, and the current trend is for this figure to rise further. More than 23 million consumers made online purchases in 2016, a volume 31% than in 2015.
With so much untapped growth potential, this industry has attracted both the Brazilian Government and large multinational companies. On the Government side, the Sebrae Innovation Tender, for example, offers cash funding of up to BRL 120,000 (USD 37,360) for the development of business ventures in the areas of innovation and technology, with a total budget of BRL 20 million (USD 6.23 million). In the private sector, companies such as Google have their eyes on Brazil. The American giant plans on setting up an innovation centre in São Paulo, aimed at start-ups. The company already has similar spaces in cities such as London, Madrid and Tel Aviv.