Brazil, Latin America’s Comeback Kid of the Digital Age?

Situated in the southernmost part of the Brazilian state of Minas Gerais, nestled among green rolling hills, coffee plantations and dairy farms is the small town of Santa Rita do Sapucaí. A cursory glance shows Santa Rita as a charming town full of farms and churches but in reality, this picturesque little city has so much more to offer. In recent years, it has become known as “Vale da Eletrônica” or Electronics Valley because it is home to the highly respected technical school, Escola Técnica de Eletrônica Francisco Moreira da Costa and is also known as a hub for technological applications, from carpool and table service apps to toothbrushes with sensors that connect to children’s games. And Santa Rita isn’t the only city in Brazil ramping up their efforts.  

Plagued by years of upheaval economically, Brazil is making a comeback and relying on the IT sector to help make their triumphant return. A $200 million joint investment with chipmaker Qualcomm, was welcomed in March by the federal government to build a semiconductor factory in the state of São Paulo where other major tech companies such as Samsung and Lenovo already have operations. Their hope for the investment is that this will be the first step for Brazil in becoming a noteworthy player in the manufacturing of high density semiconductors that are used in 4G and in the future, 5G devices, as well as IoT applications. The investment from Qualcomm is expected to bring in about 1,200 new jobs which only makes a tiny dent in solving Brazil’s unemployment rates—at 11% there is still a long way to go, but it’s a step in the right direction.

Qualcomm isn’t the only company opening up operations in Brazil. Recently, Brazil’s federal government signed a deal with Ericsson to create an IoT security center which will involve working with other companies, startups and researchers. French consultancy Capgemini also joined in and opened their first Latin American innovation center in March which will focus on developing proof-of-concepts in the areas of IoT, AI and cybersecurity.

While much of Brazil’s venture capital (VC) comes from outside forces to help strengthen its IT sector (which has been increasing despite declines elsewhere), there are local VCs investing in local startups as well. Although sums that come from these local VCs may be small when compared to those happening in Europe and the US, deals are being made at a consistent rate and show no signs of slowing down. One Brazilian VC firm called DOMO Invest, just recently closed a $30 million investment fund which it will contribute to up to 20 Brazilian startups that are still in their infancy.

While there are signs of growth and revival, there are many things that still need to be improved upon. Anderson Thees, a partner at local firm, Redpoint eventures states, “Historically, the Brazilian government has caused more harm than good every time it’s tried, but recently, we’ve begun to see a new trend emerging, with a better understanding of how things work in the startup ecosystem. On a federal level, there are discussions around new and better labor and tax laws, which will benefit companies in general, but have a critical impact for the startups.”

In a world run on technology, Brazil is reinventing itself to stay ahead of the curve. While there are bound to be a few bumps in the road as there is with any venture, Brazil is ready…ready to learn from them, grow and transform themselves into a leading nation in digital technology. This is just the beginning for Brazil and I think we should all expect exciting things in their future.

Brittany Miller, Marketing Analyst, SIG

Brittany Miller is the Marketing Analyst for SIG and the LatAm Alliance, with an emphasis in building online communities and supporting education in the U.S. and Mexico, where she currently resides. Brittany has taught middle and high school biology, chemistry and health sciences. As a type 1 diabetic, she has always been interested in science, cause and effect and the intersection of medical science and technology. She translates that passion into blogging about millennial issues, human health issues and the disruptive technologies that affect both. Brittany has a bachelor’s degree from Santa Clara University in California.