TECHNOLOGY: Brazil’s Computer Industry Makes Up for Lost Time

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Dec 12 1997 (IPS) - Brazil is racing to catch up for its previous isolation in the area of computer technology and, after a four year-crash programme, exports are rising.

Until 1992, the national market was completely protected imports of a wide variety of computer products was simply prohibited. The strategy was to develop a national industry through import substitution policies, which placed an emphasis on the production of hardware.

But in 1993 a new development program was put in place which sought to transform Brazil into a major exporter of software – thereby inverting the earlier emphasis.

Last year, the value of exports of Brazilian computer products reached 15 million dollars and, confident final figures for this year will show greatly increased sales, the 1998 target has been set at 50 million dollars.

These estimates may even be conservative in view of the possibilities presented by Brazilian companies last month at the largest international fair of computer technology, COMDEX Fall, held in the U.S. city of Las Vegas.

“There will be some good surprises in 1998, because there are many projects already in development,” stated Claudia Pavani, superintendent of the Riosoft company. Riosoft is one of the 20 hubs spread throughout Brazil that gather some 800 companies currently producing software for export.

Her optimism is based on the showing of the eight companies that signed solid contracts, specially in the United states, which will begin to pay off starting next year.

One of them, Modulo, hopes to conclude half of its 1998 contracts with foreign companies to the tune of some 15 million dollars, according to a company official. Until now, the export sales of its information security programs were insignificant.

Other companies, like Aitech, which makes Internet software, also expect to increase their profits in the coming year as a result of increasing export sales.

Moreover, this group of companies now has economic backing to move into international markets. The National Economic and Social Development Bank has recently created a line of credit that will allow exporters to obtain loans ranging from 180,000 dollars to 1.8 million dollars.

Official institutions for technological development have also offered subsidized financing in the amount of 585,000 dollars to 40 of these companies. Since most of them are small, this is a substantial amount.

All of this is the result of the Softex 2000 project, implemented by the technology development program of the government with the assistance of the United Nations Development Program (UNDP). The objective of the project was to increase the number of companies producing and exporting software.

Since the beginning of 1997, the project entered the terrain of the private sector under the supervision of the Brazilian Society for the Promotion of Software Exports – a non-profit group which manages the Softex brand.

In Brazil there are some 10,000 software companies, but most of them are dedicated to the provision of consulting and maintenance services, Pavani maintained. Those that have moved into the development of programs have the incentives to move into external markets.

This new emphasis on software is clearly related to a natural vocation of Brazil, and to the possibility of conquering niches in other markets in this industry. This is a radical departure from the perspective that it is not viable to compete with the countries that dominate the production of computer and electronic technology.

Creativity is a decisive factor in the development of computer programs and Brazilians believe they have an advantage in this area over societies that are too organized and too disciplined. Prolonged high inflation, for example, gave Brazil the advantage in creating software for bankers.

But the shift in strategy was delayed by the persistent dilemma between nationalism and the relinquishing of the national market – the latter being encouraged by pressures from the United States against protectionism that included permanent threats of commercial sanctions. Ten years ago, it also was difficult to foresee the importance of software in the world today.

Brazil prolonged its import substitution policies as long as possible, even in the computer industry. Its obsolete technology, which was also much more costly than that being produced outside the country, also made it fall behind in software development and in its Internet capabilities.

The challenge is to make up for lost time. Softex’s current goal is to make Brazil one of the top five software producing and exporting countries in the world within the next three decades. (FIN/IPS/mo/mj/if cr/mg/97)