Looking To Expand Your Business? IT Outsourcing in Brazil Might Be The Best Move

4/13/21
By
Jimena Baliero

We can’t talkabout the Latin American IT industry without mentioning Brazil. The largest country in the region and the sixth most populated in the world, the “VerdeAmarelo” is also a major player when it comes to IT services and nearshore operations.

Brazil has constantly been among the top 15 countries with the highest IT investments in the world, and its growth only continues with every passing year. Let’s learn more about what this Latin American powerhouse has to offer and what makes IT outsourcing in Brazil a solid business strategy.

Economy, Investments, and Tech Ecosystem

In 2019, while the global IT sector registered 5% growth, Brazil achieved an increase of 10.5%, earning US$44.3 billion from software, services, hardware, and exports. In 2020, Brazil’s IT sector achieved 12% growth, solidifying its position as the largest IT market on the continent.

Brazil represents 1.8% of the world’s IT market and 40.7% of the Latin American market, according to the Brazilian Association of Software Companies (ABES). At a national level, IT represents around 7% of the country’s GDP, which grew 1.1% in 2019, according to the Brazilian Association of Communication and Information Technologies Companies (Brasscom).

Investments

In 2019, IT investments made up 2.3% of the country’s GDP, with analytics, cloud computing, and artificial intelligence solutions becoming increasingly popular. Investment into SaaS solutions increased by 48.7%, while PaaS solutions increased by 55.4% percent. Hardware, software, and services experienced 18.7% percent growth overall.

Ecosystem

The Brazilian IT outsourcing industry is founded on a solid technology ecosystem. Some of the biggest names in technology have set up branches in Brazil, including Apple, Samsung, Facebook, IBM, Google, Microsoft, Oracle, Dell, Intel, Cisco, Tecban, Nokia, and Huawei.

Brazilian developers and entrepreneurs have also left their mark. The country is home to several incredibly successful unicorn companies, including iFood, 99, Nubank, Pagseguro, Ebanx, Wildlife, Gympass, Loggi, and Quinto Andar.

Tech Hubs

Since the mid-1990s, software development in Brazil has been growing exponentially. The country has heavily invested in the development of tech hubs throughout the territory. Today, the cities considered as major tech hubs and innovators in the local IT market are:

Recife, Pernambuco

Since the 2000s, the city of Recife has worked on attracting IT companies for Pernambuco. Today, more than 250 companies operate from the city, generating more than 1 billion reals per year (US$173 million).

Recife’s tech hub is considered one of the most significant drivers of economic growth in the region, housing big names such as Microsoft and IBM, as well as three incubators.

Campinas, São Paulo State

Ever since the Campinas State University was founded, the city has become a generator of qualified professionals such as engineers, physicists, chemists, computer science majors, and more. Due to this, many high-profile companies such as HP and Samsung have opened offices in the area to capitalize on talent.

Porto Alegre, Rio Grande do Sul

The Pontifical Catholic University (PUC) is one of the biggest generators of software developers in Brazil as well as IT talent in general. Many of its graduates in the Porto Alegre campus go on to join companies in the local technological park, which is home to more than 120 small- and medium-sized companies, as well as a large portion of researchers and innovation specialists.

Other innovation-centric cities in Brazil include Belo Horizonte, São José dos Campos, Florianópolis, and Santa Rita do Sapucaí.

All of the above-mentioned cities have highly successful technological parks, including:

●       Parque Tecnológico do Porto Digital

●       Parque Tecnológico de San Pedro Valley

●       Parque Tecnológico do Rio de Janeiro

●       Parque Tecnológico do Vale da Eletrônica

●       Parque Tecnológico de São José dos Campos

●       Parque Tecnológico Sapiens (Florianópolis)

●       Parque Tecnológico TecnoPuc

Coworking Spaces and Accelerators

Ever since the word “coworking” made its way into Brazil in 2007, coworking spaces have become extremely popular among professionals and companies all over the country. According to the Coworking Brazil Census, the country went from housing 238 spaces in 2015 to 1,497 in 2019.

Apart from local coworking spaces such as Gowork, Campus Inc., Co.w Berrini, Union, Rio Coworking, and Coworking Town, major multinational co-working space brands also operate in Brazil, such as WeWork, with 20 units throughout the country, and Regus, with 46 spaces in 11 cities.

When it comes to accelerators and incubators in the country, these are some of the best:

●       Startup Farm: considered one of the most experienced accelerators in Latin America, Startup Farm has more than 250 startups in its portfolio, all of which add up to more than 3.3 billion reals and operate in more than 110 countries. Additionally, this accelerator has received over US$100 million in investment since it first started.

●       ACE: founded in 2012, this accelerator provides a complete ecosystem for startups. Today, more than 100 businesses have gonet hrough its acceleration process, earning the company important recognitions, such as the Best Startup Accelerator in Brazil and Latin America.

●       Bio-Rio: this incubator was created in 1988 in Rio de Janeiro and works specifically with biotechnology companies.

●       Cietec: the Center for Innovation, Entrepreneurship,and Technology (Cietec) is an incubator linked to the University of Sao Paulo(USP). It selects startups related to electronics, biotechnology, medicine, environment, health, and information technologies and has incubated more than 130 businesses.

●       CIDE: The Incubation and Business Development Center (CIDE) was founded in Manaus in 2000. Since its foundation, CIDE has incubated over 40 startups in different areas, including nutrition, cosmetics, beverages, and bio jewellery.

Skills and Employment

While much of the world struggles with a technology talent shortage, it’s less of a challenge to find excellent software developers in Brazil, as well as skilled engineers. According to Coursera’s 2020 Global Skills Index, which ranks Brazil as the second-best country for cutting-edge technical skills in Latin America, software engineering is one of its strong suits.

Additionally, HackerRank published a list of countries with the best programmers in the world. After putting their programmers to the test, Brazilian developers are among the top 40.

Currently,the most popular languages in Brazil are:

●       Java

●       C++

●       Python

●       SQL

●       Ruby

In terms of employment, according to a 2020 research conducted by Indeed, there has been a continuous increase in demand for tech professionals, especially:

●       Programmers + 33.43%

●       Developers + 32.95%

●       Back end developers + 31.15%

●       Full stack developers + 29.67%

●       QA Analysts + 26.81%

●       .NET Developers + 18.05%

●       Testers + 14.34%

●       Front end developers + 14.06%

●       PHP Programmers + 10.29%

●       Web Programmers + 7.40%

Local Universities with IT Degrees and Masters

With over 1,700 IT-related graduate and technical courses, all of which produce approximately 100,000 graduates every year, in terms of nearshore operations, Brazil is an extremely attractive destination.

In addition, more than 100 institutes of science operate throughout the territory, as well as 400 incubators.

Several local universities are also included in some of the best rankings in the world. According to QS Rankings, the top Brazilian university in computer science and information systems is the University of Sao Paulo (USP), which has the second-highest score in Latin America and ranks among the top 90 universities in the world for engineering and technology.

The USP offers two degrees in computer engineering and applied math and scientific computing, as well as specialized courses such as programming in R language, C# and information architecture, and system projects.

The Campinas State University (Unicamp) ranks fifth in Latin America in the QS Ranking and is also ranked among the best 150 universities in engineering and technology in the world. Unicamp offers degrees in computer science, computer engineering, and information systems, as well as masters and PHDs in computer engineering.

The third best-ranked university in Brazil and the ninth in Latin America in the QS ranking, as well as one of the top 200 universities in engineering and technology, is the Federal University of Rio de Janeiro (UFRJ). UFRJ provides degrees in computing, information engineering, and nanotechnology along with several masters in nanotechnology engineering, computer and systems engineering, and computer science.

Other Brazilian universities that have achieved international recognition in rankings and produce some of the best Brazilian developers, are Paulista State University “Júlio de Mesquita Filho” (UNESP), the Federal University of Minas Gerais (UFMG), the Catholic Pontifical University of São Paulo (PUC-SP), the Federal University of Rio Grande do Sul (UFRGS), and the Federal University of Ceará (UFC).

Aside from degrees, there are some additional initiatives that help train students and professionals in IT, including Hack Station, run by Facebook, that provides training in programming, or Start-Up Brazil, a government-led program to connect accelerators with tech startups.

English Proficiency

When it comes to fluency in English, Brazil is consistently located in the middle of the Education First English Proficiency Index (EF-EPI). In an effort to improve the country’s position both in the region and the rest of the world, the government implemented mandatory English lessons in 2020. Children now start to learn the language from the last year of primary school and throughout secondary school.

In 2014, the Ministry of Education created a program called Languages Without Borders, aimed at promoting university programs for foreign languages, including English.

Connectivity

Currently, Brazil has an average connection speed of 24.6 Mbps, making it one of the top five countries in Latin America for fast internet.

Three out of four people in Brazil have access to the internet, which amounts to 134 million people. In November 2020, fiber optic broadband reached 16.4 million homes, which represents a 70% increase since November 2019, according to the local regulatory authority, Anatel.

The same regulator approved the Telecommunications Networks Structural Plan (PERT), which aims to extend fiber optic cables to guarantee access to more than 35 mobile service providers. The project received 92 contributions from companies, manufacturers, entities, and individuals.

More recently, the European operator EllaLink started to build the first fiber optic cable to link Brazil directly with Europe, boosting data traffic speeds to 72 terabits per second between both regions.

Conclusion

With a large pool of software developers, cultural compatibility with the U.S., a similar time zone (Brasilia’s time zone is just one hour ahead of Washington D.C. and New York), and convenient opportunities for foreign companies, Brazil’s IT market is getting better with every passing year.

Combined with these benefits, its successful outsourcing history and solid IT outsourcing industry have earned Brazil a place as one of the region’s most attractive nearshore destinations.

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