Brazil's ICT sector to submit national industry plan to govt

Member companies of Brasscom, one of the main entities representing the ICT industry in Brazil, are preparing a national development plan to be presented to the federal government in the second half of the year, the group’s president Affonso Nina told reporters on Thursday.

Provisionally named 'Plano TIC Brasil', the document is expected to contain a series of proposals focusing on technologies considered more advantageous so the country can be more competitive under a "state vision," according to the executive.

“Brazil has enormous potential to be a major exporter of software and services. This potential is not fully utilized. There's a lot to develop there,” said Nina, a former Sonda executive who took over as Brasscom's president in March.

Nina was speaking with BNamericas and other reporters in São Paulo.

The document is being drawn up through questionnaires and consultations with Brasscom’s 84 members, which include local companies and Brazilian subsidiaries of multinationals.

Around 55% of the companies in Brasscom are Brazilian and 45% international, according to the entity.

Members include IBM, Totvs, Tivit, Accenture, Microsoft, Amazon, Huawei, Sonda, Equinix, Scala Data Centers, Telefônica and TIM.

AGENDA

From a macro perspective, Brasscom defends the extension of the payroll tax exemption program to 2027, the approval of a tax reform that does not heavily burden the services sector, and sectorial public policies to encourage industry development.

The entity is also working with the education ministry on a new plan for training workers and students in technology, said Nina. Like other countries, Brazil grapples with a tech labor shortage and far fewer professionals graduate than what the market demands. 

Brasscom estimates the demand of workers in technology will amount to over 797,000 in 2021-25. This projection, however, was based on data from September 2021 and therefore might be conservative, given the technology dynamics and market developments since then.

With respect to the payroll exemption, Nina said he will attend an audience next week in the senate’s economy committee to discuss the topic. 

Under current rules, the benefits to the ICT industry and 16 other sectors of the economy expire at the end of this year. Bill 334/2023, authored by senator Efraim Filho, extends these benefits until 2027. The bill is yet to be voted on in the senate before heading to the lower house.

The federal government is in favor of the exemption for all sectors but has argued that the item be included in the second part of the country’s tax overhaul project, which is expected to be submitted and debated in the second half of the year. 

Nina, however, does not believe the reform will be approved by congress this year. 

ARTIFICIAL INTELLIGENCE

The Brasscom chief also called for AI regulation. 

Asked by BNamericas, Nina said the entity would soon reveal its position on the matter, with proposals for regulation.

Senate leader Rodrigo Pacheco recently submitted a bill to regulate the technology following proposals presented by a commission of jurists and lawyers.

According to Nina, care must be taken so legislation does not jeopardize the healthy development of technology and the productivity gains it might bring, while preventing abuses and misuses.

PERFORMANCE

On Thursday, Brasscom also presented industry performance figures for last year and market projections.

The entity projects 666bn reais (US$134bn) in investments in Brazil in digital transformation for 2023-26. The estimate is largely based on previously disclosed IDC forecasts. Of the total, cloud-related technologies are expected to account for about half at 308bn reais.

In 2022, the Brazilian ICT industry generated 306bn reais in investments.

The local market was responsible for over 263bn reais, driven mostly by cloud and hardware (devices and infra), whereas the services and software segments fell in comparison to 2021.

The industry also generated over 117,000 net jobs last year.

In the first three months of this year, 7,700 net jobs were created. Brasscom projects 0.4% growth in the industry’s workforce for 2023.