Brazil: At the Crossroads

The diversification of economic activity places Brazil at an advantage when compared to other rising off shoring destinations, especially the near shore rivals. Along with that diversification comes the development of long standing business expertise, which ever so more, has become critical for the new types of customer relationships that are beginning to become main stream, and where there is big load of expectations on client market strategy alignment by the vendors.

The “business expertise” advantage coupled with its easiness for cultural alignment makes a strong case for Brazil to always be part of a select “short list” of top destinations for off shoring IT services worldwide. The Brazilian Government has an official goal to become one of the 3 top world leaders together with India and China.

Walk the Talk

However, in order to keep pace with the developed economies and especially in the face of what the emerging economies are currently doing, the country needs to walk the talk and invest much more in education and training of its human capital.

Currently, Brazil has a deficit of approximately 350,000 qualified IT professionals, just to address the immediate domestic demand alone. This number should climb  drastically, as pressure is expected to rise because of all the infra structure projects related to the Soccer World Cup in 2014 and the Summer Olympics in 2016, which are planned to be rolled out in the second half of 2010.

While being able to graduate around 200,000 engineers and IT professionals a year, which will not suffice the current need, it is also much behind the direct competition of India and China, who pump out the same number just in master degrees in engineering alone.

Education: In Sync

The problem is really at its roots, where basic and fundamental education is very poor and needs to overhauled, so it can become aligned with the current market trends and in sync with employment demand.  There is urgency for government and academia to come together around a new strategic vision of quality of education and the role it plays in the country’s competitiveness and of its citizens.

Brazil needs to train and upgrade the teaching skills of its teachers, so they in turn, can help educate better and prepare the citizens to operate properly in a globalized environment. It needs to stimulate the better teaching of Math and Sciences. The Brazilian government needs to create incentive programs for the universities to prioritize the graduation of more and better teachers.

Also, as a result of the lack of a strategic vision and direction, there is a weak link between the academia and the R&D in the private sector. While Brazil currently produces around 2 % of all of the world’s scientific content, and this is on par with how much overall wealth it produces, it still has not been able to tie this production to a business outcome. Brazil has learned to convert money into content, but still has done very little to learn how to turn knowledge into wealth.

The origin of this complete shortsightedness by government stems from of our colonization days and the “mercenary” mentality by the Portuguese. The Portuguese and their “extractivist” attitude left an inheritance that is still very much prevalent today, where being part of government is perceived as being part of the royal family. Many government officials are generally separated from population and actually think they are in fact royals upon whom some deity laid the mantle and transferred the power to govern the people.

Many government officials really think they do not have an obligation to serve the people who pay their salaries. Some think they are actually doing a favor to the citizens. This absurd mindset prevails in several aspects of government and must be tackled head on in order to implement successful market sensitive education upgrade initiatives.

Global Mind

Bottom line, Brazilian government officials need to understand that we are in a globalized world, which requires a different train of thought and approach. It requires greater understanding of how local legislation and incentives affect the competitiveness of its country fellowmen and private enterprise. It requires they realize they can’t sit on top of a fiscal reform for over 10 years, and do nothing, while the national companies lose ground to the international competition.

Brazil and specially the officials in public office are at a crossroads, where the wrong turn can represent the difference in becoming a truly developed country, or remain as the “forever sleeping giant”. It is time to stay tuned with the upcoming presidential elections. Let us see if new winds will blow, and hope it will be able to harness some true “global sense” in the mindsets of the Brazilian people. After all they are the ones that elect and also govern.

Robert Janssen is the managing partner for Outsource Brazil, providing advisory services for business growth and market development strategies for organizations wanting to expand business in the North and South American markets and Europe.