Brazil moves up IT rankings – but skills gap and red tape threaten future progress

The IT sector in Brazil has become more competitive but excessive taxation and scarcity of qualified manpower continue to hamper growth, according to a study carried out by the Economist Intelligence Unit (EIU).

The EIU study, commissioned by the Business Software Alliance (BSA), analyzed the competitiveness of the IT sectors in 66 nations worldwide using criteria that include the country’s business environment, IT infrastructure and human capital, as well as the legal and R&D environments.

Brazil has moved up four positions in the ranking since the survey’s launch in 2007 – however it is still behind Chile, which ranked 34th. The advances in Brazil are due to investment in research and infrastructure, particularly around the country’s development of the mobile telephony network, the study says.

However, the EIU research has listed a number of issues that continue to block progress of the IT industry in Brazil. These include lack of qualified professionals to meet the demand.

By comparison, India and China (34th and 38th in the ranking, respectively) had better performance in terms of creating IT skills for the future – both nations are in the top 10 when the criteria is human capital, according to the research.

The study added that poor broadband coverage is another obstacle for the effective provision of IT services, as is the bureaucracy around employment laws in Brazil. Another concern presented by the report is the possibility of significant cuts in public sector funding for science and technology.

The first five countries in the ranking are the United States, Finland, Singapore, Sweden and the United Kingdom.

Both the skills gap and overregulation problems in Brazil have been cited in another extensive report earlier in the year: the annual Global CEO Survey undertaken by PwC highlighted these two issues as the main deterrents for the country’s future growth.

And the latest Global Information Technology Report by the World Economic Forum (WEF)  ranked Brazil 56th out of 138 economies worldwide. This marks a slight improvement in relation to the previous report, where Brazil ranked 61st.

The WEF report pointed out that Brazil still has “dismal” levels of individual readiness around ICT and a “burdensome” market environment. Other problems mentioned included low educational standards, particularly around science and maths and very high mobile telephony tariffs, which in turn prevent more widespread ICT usage by the population.

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Image by Βethan licensed under Creative Commons