Although during the last two years the Brazilian economy has slowed its growth rate, large companies and AV manufacturers continue to see this country as a land of opportunities in Latin America.
By AVI Latin America
About 8.5 million kilometers of surface, equivalent to 47% of South America, border with all the countries of the region except Chile and Ecuador, are some of the data that reflect why Brazil is the most important country in Latin America. But not only because of its size, but also because of its economy.
Based on Gross Domestic Product, GDP, the International Monetary Fund and the World Bank identify Brazil as the largest economy in South America, the second in the continent after the United States and the sixth in the world, although many say that it will soon be in the fifth, in addition to having a parity in purchasing power growth. At the regional level, about 50% of industrial production is concentrated in this country.
In labor matters, according to data from the Ministry of Labor, Brazil has more than 90 million people in the labor market. 65% are employees, 22% are self-employed, 5% are employers, and the remaining 8% include apprentices and volunteers. The southeast region, the most populous in Brazil, concentrates 52% of the country's workforce. Formal employment is concentrated in the sectors of manufacturing 65.34%, services 27.96% and agriculture 6.7%.
To achieve this level of development, Brazil first strengthened its internal structure so that it could then open up to the world. Undoubtedly, one of the most striking data is its transport infrastructure taking advantage of all resources: land, air and sea. According to data from the Ministry of Transport, this country has about 4,000 airports, 1.8 million kilometers on roads, 28,857 kilometers of railway network, 37 ports and a river network of 50,000 kilometers of navigable rivers.
This infrastructure has allowed it to have a high industrial activity recognized internationally and focused on São Paulo, Rio de Janeiro, Curitiba, Campinas, Porto Alegre, Belo Horizonte, Manaus, Salvador de Bahia, Recife and Fortaleza.
R&D support
As a fundamental part of its strengthening, Brazil has promoted research and development through benefits to companies that wish to carry out activities in the country, with measures that include tax incentives and reimbursable and non-reimbursable financing lines. In addition, companies benefit from cost reduction, a highly skilled workforce, and access to a developed supply chain.
This program is supported by federal agencies and organizations responsible for the promotion of R&D. Among them are: National Council for Scientific and Technological Development, CNPq; National Institute of Metrology, Standardization and Quality, Inmetro; and National Development Bank, BNDES.
In addition, it has 31 technology centers, covering different sectors of the economy. Another 17 are in implementation and 32 are being projected. Brazilian public investment in research and development has grown, reaching 1.25% of GDP in 2011.
According to the Brazilian Agency for the Promotion of Exports and Investment, known as Apex, as a result of this process, Brazil is among the top 15 producers of scientific knowledge in the world and defines the standards in deepwater oil exploitation, in aerospace, agribusiness, telecommunications and software design.
AV Industry present
In Brazilian industrial development, technology has played an important role. Obviously, the audiovisual industry has not been oblivious to the development of Brazil and has been able to take advantage of the aforementioned programs. In addition, hosting the World Cup in 2014 and the Olympic Games in 2016, as well as an economy with consecutive growth during the last decade, have made the country the main consumer of audiovisual solutions in the region.
This importance is recognized with the arrival and reception of the TecnoMultimedia InfoComm fair, which for the first time is held in Brazil this year. To this is added that InfoComm International, which has Rodrigo Casassus, CTS, at the head of Latin America, decided to create a specific management for this country and since January 2014 Nelson Baumgratz, CTS – D, leads this position.
The most interesting thing is that Brazil is not only a consumer of audiovisual solutions. Thanks to government policies of industrial and technological development, today it has AV solutions for local creation. In addition, large AV brands have a direct presence in the country and there is a growing trend to establish their regional headquarters and production plants there. This is confirmed by Nelson Baumgratz, CTS – D, by ensuring that many foreign companies continue to see Brazil as a land of opportunities.
The Brazilian states that stand out for the technological development for the AV industry are Sao Paulo, where most of the companies are concentrated and Rio Grande do Sul, in which important companies for the sector are also headquartered.
But what are the growth expectations of the AV industry in Brazil? It continues the trend of recent years, in which the industry worldwide was growing about 13% a year. It will be even better to wait for the publication of the 2014 market study prepared by InfoComm, and that for the first time will have data regionalized by some Latam countries, and Brazil will be one of them.
"The audiovisual industry in Brazil has a panorama of possibilities, after a moment of disappointment, because it was expected that the World Cup would generate a lot of business in the AV world, but it did not happen so much like that. In truth, due to so much lack of general country planning on the issue of the Cup, many major companies that normally took AV services canceled their plans for the first semester. That had a huge impact on the rental & staging course," added Nelson Baumgratz, CTS – D.
International presence
Brazil has achieved an important position in international trade. Today it has economic relations with about 100 countries, among which the European Union stands out with 26%, Mercosur and Latin America with 25%, Asia with 17% and the United States with 15%. 74% of the goods exported are manufactures or semi-manufactures and among its main export products are aircraft and electronic equipment.
And precisely to strengthen this market and international presence, the country has Apex, an organization directly related to the Ministry of Development, Industry and Foreign Trade, which is responsible for promoting Brazilian products and services abroad and attracting foreign investment to strategic sectors of the country's economy. The Agency works to unite international buyers to the best and most innovative products in the Brazilian industry.
It has a structure that includes its headquarters in Brasilia, the Federal Capital, service units in Brazilian States and Business Centers in the main global markets such as Miami, United States; Moscow, Russia; Luanda, Angola; Beijing, China; Brussels, Belgium; Dubai, United Arab Emirates; and Havana, Cuba.
Another of the associations that seeks the growth of the Brazilian market in the world, but focused on technology, is EletroElectrónicos Brasil, formed by companies that develop products, solutions and services of high added value for different markets, with the support of the Federal Government, through Apex. The project seeks to expand the participation in the international market of Brazilian companies in the sector, through the increase in sales of items with greater added value.
The management is under the responsibility of the Union of Industries of Electrical, Electronic and Similar Equipment of the Vale de la Electrónica, Sindvel, an institution that brings together about 150 companies from the city of Santa Rita do Sapucaí, State of Minas Gerais, region better known as Vale de la Electrónica. Currently, it has the participation of companies from Minas Gerais, Sao Paulo, Santa Catarina and Rio Grande do Sul.
Thanks to the size of its economy, Brazil is part of groups of countries that work for common purposes and with high power, such as the G20 and the BRICS, acronyms for Brazil, Russia, India, China and South Africa, a group that has in common a large population, territorial extension, natural resources and economic potential, characteristics that make them highly attractive for investments.
Lower expectations
The last two years have not been easy for the Brazilian economy. Despite having grown to high figures during the international crisis that began in 2008, even registering a growth of 7.5% in 2010, for 2011 it had a setback and growth was 2.7% and in 2012 it fell to 0.9%, figures that set off alarms and that the government explained at the time as a consequence of the crisis in developed countries.
According to the Brazilian Institute of Geography and Statistics, IBGE, for 2013 the growth was 2.3%, which although it exceeded the previous year, continues to generate fear of what may happen in 2014. In fact, in April of this year the Central Bank raised its interest rates for the ninth consecutive month, reaching a benchmark Selic rate of 11%.
The audiovisual industry has not been oblivious to these phenomena. As Nelson Baumgratz, CTS–D, see, "Right now we're going through some storms and now we're getting the lowest trade balance indices of all time. But the country is very big, all the big world companies are installed here, and that pushes the possibilities. So it's still interesting to invest in the country. In addition, all crises generate opportunities. In crises, companies still need to communicate, and that is the business of the professional AV world."
