Brazil is the country benefiting the most in the Latin American countries from the new round of global service trade transfer. Although Brazil currently earns about 500 million US dollars in outsourcing services annually, but consultants in global service outsourcing industry are all optimistic about Brazil thinking that Brazil will soon become the main centre outsourcing of services in the Latin American region, and even will be listed in the top five in the service outsourcing centers of the world. Year 2007 will be the year Brazil will be fully recognized on the market. The reason for the foreseers to be so optimistic is that Brazil has its own advantages in undertaking outsourcing business:
1. low cost, time zone and culture
Although the cost of labor in Brazil is not as low as India, but it is still far lower than that of the United States. Compared to India and China, Brazil's largest "selling point" is perhaps its time zone and closer location to the United States culturally. The time of Brazil's major cities is only1-3 hours earlier than New York, while that of Indian cities usually is 11-12 hours earlier. In addition, Brazil is considered to have similar values and culture to the United States, but cultural conflicts often happen between the American and India or other Asian countries.
2. Things turn into opposites, a blessing in disguise
In the 1980s and 1990s, Brazil prohibited imports of business computers, which stimulated the domestic computer industry. And in order to deal with serious inflation at that time, Brazil's Great Bank had to develop complex software systems for computer. It results in that Brazil has much more programming talents than any other countries in Latin America. In other countries surrounding Brazil, Mexico's IT personnel have poured into the United States; Chile has a small population of only 16 million despite its high education, so Brazil with its population of 190 million is outstanding in the services outsourcing market in Latin American. Different from India, Brazil has already established a domestic market of IT services, and it is estimated that the market capacity is about 7.7 billion US dollars per year. Many international large IT companies have already entered Brazil. Now, these companies are re-deploying their global resources, from which Brazil will benefit. It is precisely the chaotic situation of Brazil economy over the past years that has promoted the rapid development of the IT industry for the country.
3. Brazil becomes the destination of India's outsourcing business
Recently, Indian companies have started subcontracting businesses to Brazil. Last year, one of the three Indian IT services outsourcing giants paid 50 million US dollars to a Brazilian software company for a long-term business. The latter employed 70 local staff, and planed to expand to 200 people. The cost of labor in Brazil is not as cheap as before. As the economy has gradually stabilized from 2003, the Brazilian currency has been appreciated substantially. Rising wage and the Brazil's tax system make some companies to hold the view that the prospect in services outsourcing market is not very clear for Brazil. Analysts optimistic about Brazil believe that Brazil will be highly competitive in services outsourcing market and will gain international outsourcing business of 10 billion US dollars in 2010.
