A recent survey from Grant Thornton U.K., prepared by Experian, placed Brazil among the top most attractive countries for information and communication technology (ICT) business investment and expansion. “The huge potential consumer market, which is increasing due to the advancement of the middle class, and the growth in the number of companies starting business in the country, as well as the future events of the World Cup and Olympic Games are driving investments,” Eric Peterson, Grant Thornton Brasil’s partner for the IT vertical, told RCR Wireless News.
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Including telecommunications, IT end-user spending in Brazil is expected to approach U.S.$134.2 billion in 2014. Peterson explained during the interview that increased consumption, driven by the rising purchasing power of the middle class, is pushing enterprises to be more competitive, and they seek ICT to become more efficient, profitable and responsive to market demands.
The study is based on CEOs’ answers to the question: “how can my business expand into new markets?” To build the Grant Thornton Technology Expansion Index, the strengths and weaknesses of some of the U.K.’s current top countries for investment, including its domestic market, were investigated. The ten countries chosen are a mix of those with high GDP forecasts and those considered to be emerging technology markets.
Brazil ranks 7th in the index, which is led by the U.S., U.K., China, Germany, France and India. Peterson considers this a good showing, even considering that Brazil is ranked at the bottom when it comes to business start-ups. The survey notes that Brazil is among the top countries for new business registrations, indicating that businesses are setting up in Brazil even though it is some distance behind other countries in other business start-up factors.
In contrast to Brazil’s low overall start-up rating, Israel scores high, reflecting the fact that with 1,800 active start-ups, Israel is poised for significant growth as a venture-backed economy.
Grant Thornton believes that Brazil is a potential technology investment hotspot because of its large, stable, growing economy; its modern financial system that has largely escaped the global financial crisis; a strong base of local investors; robust capital markets; and a middle class of nearly 100 million people as potential technology consumers.
Peterson believes that investment in Brazil won’t come just because of the World Cup or the Olympics. Instead, he pointed out that companies are planning solid investments that go beyond these big events.
However, Brazil faces some challenges which could hinder technology investors, including a shortage of trained IT labor and heavy government bureaucracy and taxes. In addition, Peterson noted that foreign companies need to understand the local market before launching operations.
