The country's US$ 10 billion IT market is similar in size to India's, the global leader in outsourcing. The main difference between Brazil and India is the amount of IT exports. India ships about 70% of its production, compared to only 1.5% for the South American nation. Brazil's aim, however, is not to compete head-to-head with India, or other emerging IT outsourcing nations such as China, but to focus on local advantages that will enable it to develop niches in outsourcing. According to a research paper published by Gartner in December 2004 on the Latin America IT market, local advantages include "a flexible, creative workforce; sensitivity to customer needs; established relationship with global companies and expertise in certain application segments as well as low costs and workdays that overlap with North American and Europe."

Recently, the Brazilian government adopted an Industrial Modernization, Innovation and Technological Development program as a means to promote economic growth and improve the country's overall competitiveness and efficiency. Two policies included in the program regard the creation of a favorable environment for private and public investments and the enhancement of Brazil's technological base in areas that show the highest potential for growth, such as the software and IT services industry. Furthermore, the government recently announced that it would suspend federal taxes on exports of computer hardware and software and telecommunications services for five years. Brazil already offers special credit lines to technology companies that are focusing on foreign markets and has a goal of increasing the industry's exports to US$ 2 billion by 2007.

In its market research, Gartner foresees Latin America's IT market reaching US$ 134 billion this year, and, notably Brazil and Mexico, becoming challengers in application development outsourcing and niche business process outsourcing by 2007. The consulting firm recommends that global companies evaluate Latin America as a potential base for IT and business process work that requires creativity and high-end resources and low cost. "Consider Latin American countries for specialized offerings, including data center hosting, provision of regional centers of excellence and call centers, business process outsourcing, iterative software development for vertical industries, and sensitive and secure software development," write the analysts.

For more information visit www.brazil-it.com. To schedule interviews with Brazilian IT executives, please contact Flavia Sekles at the Brazil Information Center, (202) 471-4020 or (202) 423-3080 (for the duration of the Gartner Symposium/ITxpo).