A longstanding leader in offshore software development, Brazil is a prime target for foreign companies seeking tech talent in Latin America. Brazil's well-developed IT infrastructure, skilled workforce, and competitive costs made it a magnet for businesses seeking top tech talent. Brazil's booming high-tech exports, reaching $7.65B in 2022 (up 20.5% from 2021), reflect the rising global demand for Brazilian tech expertise. Let's explore why Brazil is such a popular choice for IT outsourcing services in Latin America.
Brazil's IT market highlights
Brazil's IT services market is expanding, powered by various factors. Businesses rely on modern solutions like cloud computing and cybersecurity to stay competitive, driving growth in these sectors. Government policies and economic recovery further propel the market forward, reaching a projected revenue of $23.67B by 2025. A skilled workforce and established IT companies form a strong foundation for this expansion. Despite challenges like complex regulations, Brazil's large and growing population creates a substantial market for these services, solidifying its position as a major IT hub in Latin America.
Brazil's dominance extends beyond its borders, capturing a 37.2% share of information technology investments in Latin America in 2023. This positions the country as a regional leader in the tech sector. Brazil is a major player in the global software and services market. According to a study by ABES and IDC, it ranks 10th in terms of investment, holding a 1.4% share. Brazil offshore software development sector is expected to grow. Analysts predict a CAGR of 9.38%, with revenue reaching $10.38B by 2029.
Tech climate and infrastructure
With its large size and readily available talent pool, Brazil is in 4th place in Kearney's GSLI for IT outsourcing. Numerous companies established or expanded their innovation hubs in the country, home to numerous delivery centers and technology hubs. The pandemic further accelerated digitalization efforts, making Brazil a magnet for digital investments. According to the GSLI, Brazil's core strengths lie in its financial attractiveness and the skilled and large labor pool.
This strong foundation has positioned Brazil as a leader in innovation within Latin America and the Caribbean. The country ranks 1st among 19 economies in the region according to the Global Innovation Index. Notably, Brazil demonstrates a high efficiency in innovation, generating more outputs relative to their investment levels. Furthermore, the country surpasses the regional average across key metrics: knowledge and technology outputs, creative industries, business environment, market sophistication, human capital and research, and infrastructure. A significant proportion (17.5%) of graduates specialize in science and engineering.
According to Clutch, around 270 software development companies in Brazil employ up to 250 engineers, contributing significantly to Brazil offshore software development industry. Additionally, there are approximately 25 midsize and 15 large software development companies.
Government support for startups, including funding, mentorship, and government contracts, has fueled an impressive ecosystem. Brazil's tech startups contribute over 5.6% to its GDP, solidifying its regional tech startup hub position. São Paulo, in particular, stands out with over 2,700 startups and is the largest tech hub in the region. The city's economic power, exceeding the combined economies of several neighboring countries, further highlights the strong potential of Brazil's developer talent pool.
Tech talent pool
According to LinkedIn data, Brazil boasts the largest talent pool in Latin America's tech sector, with an estimated 760,000 software developers. Notably, as reported by Statista, over 500,000 professionals are engaged in Brazil offshore software development. According to the OECD, this pool is further strengthened by a steady inflow of new talent, with almost 55,000 ICT graduates entering the market annually. The presence of around 310 software development companies fosters a dynamic and competitive environment.
Brazil's software developers rank 14th globally in technology and 2nd in Data Science, according to the Coursera Global Skills Report 2023. Additionally, Brazil has the 6th highest number of GitHub accounts worldwide. In Latin America, Brazilian developers rank 3rd overall with high scores in Data Science (99%) and technology skills (87%). Their expertise comprises data visualization (1st place) and related fields like data management (99%), analysis (98%), and statistical programming (98%). Furthermore, their technical strengths include databases, computer programming (92%), and mobile development (88%). Brazil's highly skilled developer workforce is valuable for companies seeking top talent in Data Science and technology.
The most popular technologies among Brazilian software developers are C++ and C#, followed by Java, JavaScript, .NET, Python, and PHP.
Government support of the IT industry in Brazil
Brazil actively fosters the growth of its IT sector through various government initiatives. Here's a breakdown of some key programs:
Tax incentives
- Law 11,196/2005 offers tax breaks for R&D activities, especially in IT. This includes exemption from certain levies on imported software or IT development goods. Additionally, qualifying companies can benefit from a 50% reduction on a specific tax (IPI) when acquiring equipment for technological research. Stringent monitoring ensures these incentives are used appropriately.
- Law 8,248/2019. This newer law replaces the previous IT Law (1991) and introduces a new incentive model. Companies committed to R&D and innovation can earn financial credits based on their investments. It also standardizes benefits previously dependent on product and location.
Soft Landing program
Programs like Soft Landing" help foreign IT companies establish themselves in Brazil by providing temporary support and infrastructure. This allows them to participate in technology parks as incubated companies, similar to startups.
São Paulo Inova
This program in São Paulo state offers financial support to innovative tech companies in the early stages or during expansion. It provides special credit lines and investment funds tailored to different company sizes.
Time zone overlap
When outsourcing software development, seamless communication is key. Brazil offers a significant advantage in this regard. Rio de Janeiro and São Paulo have time zones one hour ahead of Eastern Standard Time (EST) in the US, fostering easy collaboration during business hours. While Brazil and London have a four-hour time difference, their working hours overlap by six hours. Brazil has a five-hour overlap in business hours with countries operating in Central European Time (CET). Even when offline communication is necessary, Brazil has an extensive air travel network. With 18 international airports offering frequent flights to major destinations in the US, Canada, and Europe, business travel is convenient and efficient.
Cost advantage
For companies seeking cost-effective software development solutions, Brazil presents a compelling opportunity. Living costs in the country are significantly lower than in the US (around 50.9% lower). This translates to savings across various aspects of your Brazil offshore software development project, including labor costs, office space rental, transportation expenses, and utilities. For example, companies can expect to pay 81.9% less in rent compared to the US. You can expand your development possibilities without compromising quality by leveraging N-iX's expertise and Brazil's cost advantage.
Read more: IT outsourcing in Brazil: market overview and prominent hubs
Wrap-up
Brazil has become a magnet for offshore development, boasting a skilled and innovative tech workforce. N-iX, a global software development partner with a strong Latin American foothold, can help you tap into Brazil offshore software development. We have a presence in over 25 countries across the Americas and Europe, giving you access to a vast talent pool of over 1M experts, including over 2,200 specialists in cutting-edge technologies. N-iX boasts a proven track record across various services. This includes tech consulting, development, and staff augmentation.
Our experience is further solidified by partnerships with industry leaders, such as Microsoft, OpenText, AWS, and GCP. We also collaborate with major Fortune 500 companies like Bosch, Inditex, Fluke, and Currencycloud. This demonstrates our ability to deliver high-quality solutions for a diverse range of clients. N-iX's expertise, combined with a rigorous interview process, ensures you connect with Brazil's top developers and meet your software development needs.
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