Brazil is no ordinary BRIC country but there are opportunities there, argues Nitin Dahad recently back from Sao Paulo.
With the Embedded Systems Conference in Brazil taking place next week this "BRIC" country will undoubtedly get a higher level of awareness among readers of EE Times. Brazil has been on the agenda for many international governments recently with high level delegations and bilateral visits from the USA, China, and India among others. During the week I visited Sao Paulo in March of this year, President Obama was fully into his visit to Brazil, getting widespread media attention in the Brazilian press.
What was apparent to me as I visited electronics and technology companies, engineering institutes, industry associations, and others responsible for technology in their own sectors (eg. in banking, healthcare, mobile and broadcast), was that Brazil was a relatively unknown entity in the global tech sector, especially among English speaking countries. It’s very different for those from, for example Portugal, Spain, Germany and Italy, where there have been stronger links to Brazil.
According to a report released this month by Accenture, based on research across eight countries, Brazilians have the highest consumer electronics ownership and spending in 15 product categories. More than half (55 percent) of Brazilian consumers have bought a mobile phone during the past year, compared to the international survey average of 32 percent. Similarly, 40 percent of Brazilian consumers plan to buy HDTVs this year compared to 25 percent internationally; and 20 percent intend to buy 3DTVs this year compared to 12 percent internationally (full data can be found at this
"Brazilian consumers are outpacing the rest of the world’s consumers in electronics usage and spending," said Petronio Nogueira, senior executive with Accenture’s communications and high-tech group. "Now as never before, Brazil has become a global epicenter for consumer electronics business opportunities."
This report is certainly confirmation of what I saw (see
my blog piece on IT Decisions), in that the country’s research and development funding is geared towards enabling product development in the key areas of demand and growth in the tech sector. For example, The Integrated Systems Technological Laboratory (LSI-TEC) at the University of Sao Paulo, which is a non-profit research organization that has been operating since 1999, provides innovation in advanced digital technologies and is very active in embedded systems design and transfer of intellectual property to commercial ventures. LSI-TEC develops services, systems and products in electronic devices, integrated circuits, software and hardware for educational applications, as well as basic software and applications for PDAs and cell phones. The team whom I met described it as the Fraunhofer Institute of Brazil.
The team at LSI-TEC cited examples of work that have resulted in commercial implementations – for example, they had designed the first HD set top box in Brazil, and now they are working on the use of the set-top box as a home sensor with a view to working with utility companies in transferring that technology. While they use standard embedded processors and system level design techniques, they were keen to see more semiconductor intellectual property being made available to design engineers in Brazil so that they can do more system-on-chip development.
Recognizing this companies like ARM have already committed to Brazil (see the EE Times story, ARM
makes market moves in Brazil). As the Accenture report points out, consumer electronics consumption has grown and will continue to grow rapidly, especially as social mobility increases (the mobile phone penetration rate is already over 1.2).
But international companies looking to enter Brazil will be doing so not because Brazil is a country where you can do low cost manufacturing or outsourcing of software development, since the cost of doing business there is relatively high compared to some markets; the attraction of Brazil is the internal market and its base as a hub for the growing Latin America market.
My perception was that Brazil is a developed rather than emerging economy. While there are some similarities with the growth of other BRIC (Brazil, Russia, India, China) countries, Brazil is very different - the opportunity for international technology companies is certainly significant (as Foxconn and Apple have recently demonstrated), but there are challenges as with any new market and it’s important to ensure that you work with local partners and expertise to understand the best route in and what actual opportunities there are available.