What Recession? Rio Grande do Sul Proves Brazil is Already Bouncing Back

The IT hub around the Porto Alegre metropolitan area in the southern Brazilian state of Rio Grande do Sul is quickly emerging to be one of the biggest tech centers in the region. Many international tech companies such as SAP, HCL, Dell, HP, Dell, Accenture and Microsoft have been attracted by the Tecnosinos and Tecnopuc clusters and have set up their operations in the area.

In December, SAP will open a new research and development (R&D) center at the Tecnosinos Park, located at the Sinos River Valley in the city of São Leopoldo city, 34 kilometers from the state capital Porto Alegre.

The new SAP lab will employ 500 workers and will serve Brazil and Latin America markets, said Fernando Lewis, vice president for South Latin America operations at SAP. The objective is to develop software to first serve the local market in Brazil and then export it to other countries, he explained. Sap chose to set up the R&D center in Tecnosinos Park because of the high-quality workforce, the cultural environment and the close contact with clients in the region, Lewis added.

Tecnosinos and Tecnopuc

Created 14 years ago, Tecnosinos Park is the largest international platform for technological production in the Latin America. The park is home to 75 tech companies from 10 different countries and many different sectors.

The combined annual turnover of these companies is one billion Brazilian real ($453 million USD) and in total they employ 4,500 workers, said Suzana Kakuta, director of Tecnosinos.

The Rio Grande do Sul’s other major tech park is the Tecnopuc Park, which opened in 2003. Also located in the Porto Alegre metropolitan area, it is home to companies such as Dell, HP, Microsoft, TO TVS and Stefanini. “Almost 70% of its 93 companies belong to the IT sector,” said Roberto Astor Moschetta, director of Tecnopuc.

Both of these parks were voted among the best technology parks in Brazil by Anprotec – the Brazilian Association of Science Parks and Business Incubators.

University-Driven Development

The Tecnosinos started as an entrepreneurial initiative to diversify the local industry that was concentrated in the footwear sector and had been facing competition from China. The project received the support of the local government and a partnership with Unisinos University was established. Today, the university offers a high-quality workforce to the companies in the park.

The Tecnopuc Park was the result of a project from the PUC University and was later taken over by the government and private sector. In addition to Tecnosinos, the Sinos River Valley has other important technology clusters such as the Valetec (a technological development association in the Valley). Located 30 kilometers from Porto Alegre in the city of Campo Bom, this park was created in 1998 to encourage innovation and entrepreneurship in the region. It currently has 83 associated companies.

Another region that has emerged as an important IT and computer hub in Rio Grande do Sul is Serra Gaucha, through its Trino Polo Park. The park is located in Caxias do Sul, a city in the northeast of the state. Its companies were the first to organize a local productive arrangement (APL) focused on the IT sector and recognized by the state government’s Development and Investment Promotion Secretary.

An APL is an agglomeration of businesses located in the same territory which is permitted to for funds from state agencies and the federal government. The Serra Gaucha APL was one of three APLs selected by the Gaucha Agency for Development and Investment Promotion (AGDI) to receive 500 million Brazilian real ($226 million USD) until 2015 to invest in local development and the companies’ development.

The partnerships with private universities aid these clusters in the development of research in the technology sector and the creation of new products, while startups receive support through the university incubators.

Government Incentives

One of the most important technology hubs in Brazil, Rio Grande do Sul is has attracted many companies with its excellent urban infrastructure and the high-quality, low-cost workforce available through the partnerships with universities. In total, the state’s four software clusters are home to almost 1,500 IT companies with an annual turnover of up $2 billion USD, according to Softsul.

The local government has offered several incentives for technology companies to set up businesses in Rio Grande do Sul, including a reduced sales tax of just 2%, a workers training program and financial support through a science research scholarship by the State Research Foundation (Fapergs).