Nearshore Americas

Brazil Tech’s Loss Could Be Education’s Gain

When the president of Brazil rolled out her administration’s new “Greater Brazil Plan” last August at a big-splash event, one of the main players on the stage that day was Aloizio Mercadante. As minister of Science, Technology and Innovation, he helped shape the new “Plano” that featured several measures aimed at boosting the Brazilian IT industry.But now Mercadante is expected to be leaving the Science post to, according to news sources, become the minister of Education. The personnel change raises at least two major questions: Without Mercadante’s advocacy, will the government now put less emphasis on innovation, the technology sector, and export of IT services? And will Mercadante’s Education ministry put more emphasis on science and high-tech skills in Brazil’s schools?

At the beginning of Dilma Rousseff‘s administration, Mercadante was put in charge of the Ministry of Science and Technology, or MCT (Ministério da Ciência e Tecnologia). Under his command, the department acronym gained a letter “I,” which stands for “Innovation,” suggesting that this is an important topic for the government.

Mercadante is a name associated with the Partido dos Trabalhadores (Party of Workers), or simply PT, which was founded by former president Luiz Inácio Lula da Silva in the 1980s and is the party of Ms. Rousseff. Former senator for the state of São Paulo, the richest and most influential in the country, Mercadante ran for governor of São Paulo but lost during the same elections in which Dilma won the presidency.

Dilma decided Mercadante should become one of her ministers, and gave him an area that did not get much attention during Lula’s years. With that move, and others since, she has indicated that technology would be a priority, at least in theory.

Mercadante seemed pretty busy as sci/tech minister, and enthusiastic about boosting the role of technology in Brazil’s economy. In April he went to China with Dilma and a crew of Brazilian entrepreneurs, politicians, and business executives and, during the trip, announced the huge investments Foxconn and its founder and CEO, Terry Gou, said they would make in order to manufacture tablet PCs in Brazil.

Production of tablets on Brazilian soil became a hot item for the ministry and for the President. Medida Provisória (MP) 534/11 was approved to exempt companies that manufacture the devices in the country from paying two major local taxes, known as PIS and Cofins.

However, despite Mercadante’s proclamation that tablets would be rolling off the assembly lines by December, thus far no tablets have been manufactured in Brazil by the Foxconn operation.

Major Backer of Major Plan

Mercadante played an important part in the conversations that ended up shaping Plano Brazil Maior, an important package of incentives for the local IT industry that included exemption from some payroll taxes – which was welcomed by IT companies doing business in Brazil.

Mercadante also announced the program Science Without Borders, which is aimed to promote, internationalize, and increase the number of science and technology professionals in the country. Again, he and his ministry were trying to deal with one of the main problems of the IT services industry in the country: the lack of qualified technology workforce.

The expectation from some observers now is that Mercadante will focus on technical skills courses and high-level qualification as the minister of Education. If this turns out to be the case, this could be good for the Brazilian IT industry, which needs more tech professionals to meet the high demand for IT services.

Sources close to Senhora Presidenta, or Mrs. President, told Brazilian media that she wanted a strong name to focus on a strategic area for the development of the country, and Mercadante would be better than any unknown employee of the ministry.

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It is worth noting that Dilma has been in the middle of a ministerial crisis after six of her ministers, most of them inherited from Lula’s era, were either fired or resigned after corruption scandals. With Haddad running for mayor in São Paulo, the Education post had to be filled by a safe and untainted name.

So far, Dilma’s administration has made efforts to boost the IT sector with measures that would lower business costs – and in turn be a boon to outsourcing companies competing with lower-priced provider nations. By all accounts, Mercadante played an important role in those policy changes.

But it is still not known who will be the new head of MCTI, or if he or she will come from the technology community or be more of a political appointee. The apparent lack of a nominee might make people wonder if development of a strong IT industry will remain a national priority for the president.

On the other hand, a greater emphasis on science and technology in Brazil’s schools could, in fact, contribute to a stronger IT industry.

An official announcement, according to reports, is expected this month.


Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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