1. Brazilian Digital Ecosystem
The Role of Technology to overcome
Brazilian Economy Bottlenecks

2. Brazil – From sky-rocketing GDP growth…..

3. ….. To the “Pibinho”

4. GDP
% change on a year earlier
8
6
4
2
0
2003
05
07
09
11 12 13
2 (-)
Brazil - missed chance of sustainable economic growth ?

5. INFRASTRUCTURE
EDUCATION
PRODUCTIVITY
TAX & SYSTEM
Brazilian structural bottlenecks and interaction with the digital ecosystem

6. Productivity & Growth Bottlenecks
Challenges
INFRASTRUCTURE
Disaggregated, isolated, private infrastructures
(Transport, Telecom, Energy)
(Brazil: 114th out of 148 countries)
Skilled labor shortage (high turnover and cost)
EDUCATION
(Brasil (190M): 37 mil engenheiros/ano. Coreia do Sul (48M: 92 mil) - Brazilian education still ranks 88th
INDUSTRIAL PRODUCTIVITY
Industrial competitivity and productivity (Auto, Equipments…)
TAX & ADMINISTRATION
The Brazil cost: Tax burden and bureaucracy
Brazil Growth Bottlenecks: Infrastructure

7. Total Value of Infrastructure Stock
% GDP
Brazil’s stock of infrastructure value to GDP is 4x less than in developed economies

8. Productivity & Growth Bottlenecks
Challenges
INFRASTRUCTURE
(Transport, Telecom, Energy)
Disaggregated, isolated, private infrastructures
EDUCATION
Skilled labor shortage (high churn and cost) – education quality
(55th/65th)*
(Brazil: 114th out of 148 countries)
(Brasil (190M): 37 mil engenheiros/ano. Coreia do Sul (48M: 92 mil) - Brazilian education still ranks 88th
INDUSTRIAL PRODUCTIVITY
Industrial competitivity and productivity (Auto, Equipments…)
TAX & ADMINISTRATION
The Brazil cost: Tax burden and bureaucracy
* Program for International Student Assessment’s analysis of quality of basic education
Brazil Growth Bottlenecks: Education

9. Productivity & Growth Bottlenecks
Challenges
INFRASTRUCTURE
(Transport, Telecom, Energy)
Disaggregated, isolated, private infrastructures
(Brazil: 114th out of 148 countries)
Skilled labor shortage (high turnover and cost)
EDUCATION
(Brasil (190M): 37 mil engenheiros/ano. Coreia do Sul (48M: 92 mil) - Brazilian education still ranks 88th
INDUSTRIAL PRODUCTIVITY
Industrial competitivity and productivity (Auto, Equipments…)
TAX & ADMINISTRATION
The Brazil cost: Tax burden and bureaucracy
Brazil Growth Bottlenecks: Competitiveness

10. Productivity contributed less to Growth in Brazil than in other rapidly developing economies
Breakdown of value-added growth, 2002-2012
7
18
28
40
93
82
72
60
60
70
40
30
China
CAGR
2002-2012 (%)
India
South Korea
Mexico
Russia
10.6
7.8
4.2
2.3
4.6
Chile
4.1
Source: Euromonitor, BCG analysis
Productivity gains contribution to GDP is very low
Employment
growth (%)
74
26
Brazil
3.7
Productivity
gains (%)

11. Productivity & Growth Bottlenecks
Challenges
INFRASTRUCTURE
(Transport, Telecom, Energy)
Disaggregated, isolated, private infrastructures
EDUCATION
(Brazil: 114th out of 148 countries)
Skilled labor shortage (high turnover and cost)
(Brasil (190M): 37 mil engenheiros/ano. Coreia do Sul (48M: 92 mil) - Brazilian education still ranks 88th
INDUSTRIAL PRODUCTIVITY
Industrial competitivity and productivity (Auto, Equipments…)
TAX & ADMINISTRATION
The Brazil cost: Tax burden and bureaucracy
Brazil Growth Bottlenecks: Tax burden & bureaucracy

12. INFRASTRUCTURE
EDUCATION
PRODUCTIVITY
TAX & SYSTEM
Structural bottlenecks have shaped and impacted the digital ecosystem

13. FRANCE
GDP in million
BRAZIL
US$2,775
US$2,476
Digital landscape: France vs Brazil
France and Brazil are the two first Latin economic powers

14. Engagement
Key takeaways about the readiness of the
Brazilian digital ecosystem
•
•
•
•
•
Digital readiness impaired by structural
bottlenecks
Business and Innovation environment is not
supportive
Accessibility is average and Affordability is still a
challenge
Engagement is high throughout individuals,
businesses and governments
Online spending are still lagging (e-commerce &
online advertising)
Environment
Acessibility
(Regulatory, Business & Innovation)
Affordability
FRANCE
Worldwide Ranking:
BRAZIL
26th
60th
(World Economic Forum)
Brazil: High engagement but challenging affordability & environment

15. Regulatory, Business & Innovation Environment
Regulatory
Software Piracy rate
Laws related to ICT
Business Innovation
Availability of latest technologies
Venture Capital Availability
Intensity of local competition
Skills
Quality of management schools
FRANCE
27th
IP protection
Number of days – procedures to start
a business
Total Tax rate (% profit)
Quality of education system
R&D Research
BRAZIL
107th
World Economic Forum
Brazil: an impaired digital environment

16. T AX & ADMI NI ST RAT I ON
AV E R A G E T I M E T O S TA R T A B U S I N E S S
In days
EDUC A T I ON
R&D INVESTMENTS & JOBS
2.25% GDP
111
days
7
days
7 days
33
days
Brazil
France
China
13 procedures
1.16% GDP
R&D technicians in France vs
Brazil per 100 habs
5 procedures
FRANCE
World Economic Forum
Digital environment
BRAZIL
3x

17. Accessibility
Acessibility of digital content
Mobile Network coverage
Mobile Internet Penetration
Secure Internet servers
Fixed broadband penetration
FRANCE
BRAZIL
28th
62th
World Economic Forum
Brazil: Average Accessibility

18. I N FRAST RUCT URE
F I X E D B R A O D B A N D P E N E T R AT I O N
% population
FRANCE
24 M
35%
€ 10 / month (1GB)
BRESIL
19 M
10%
€ 20 / month (1GB)
M O B I L E B R O A D B A N D P E N E T R AT I O N
% population
3G COVERAGE
FRANCE
33 M
50%
BRAZIL
77 M
38%
FRANCE
% population
98%
BRAZIL
World Economic Forum
Digital Accessibility
90%

19. Affordability
Mobile Internet broadband tariffs
Internet and telephony competition
Mobile cellular tariffs
Fixed Internet Broadband tariffs
Smartphone price
FRANCE
BRAZIL
86th
76th
World Economic Forum
Brazil: Still a challenging affordability

20. Engagement: technological uptake
Cellphone penetration
Internet users (% population)
Time spent online
Social networks penetration
Business Usage of internet
Governement usage of internet
E-commerce penetration (e-consumers)
Online advertising penetration (% total retail)
FRANCE
BRAZIL
22th
44th
World Economic Forum
Brazil: High usage and technological uptake

21. P E N E T R AT I O N
F E AT U R E & S M A R T P H O N E S
INTERNET USERS
125%
AVERAG E
SMARTPHONE PRICE
99%
49% pop
18%
38%
96M
54M
P O S T PA I D P L A N S
83% pop
% mobile phones
78%
361 mins
90%
535 mins
91%
21%
€ 390
2 GB DATA
MOBILE PLAN
€ 20 ...
€ 38 ....
Source: Brasscom, WOF, McKinsey, Valor, IBGE, Comscore, eMarketer
FRANCE
Digital engagement is high
BRAZIL
€ 285

22. E-COMMERCE
8,7% of retail
€ 45Mds
31 M e-consumers
€ 8,6 Mds
2.5%
6.5%
60%
AVERAG E SHI PPI NG
TIME
35% higher in Brazil
40%
AVERAG E
SHIPPING COST
3% of retail
43 M e-consumers
AVERAG E T RA NSACT I O N
COST FOR E-SELLER
(Acquirer + Fraud control)
INTERNET USERS TO
E-CONSUMERS
2x higher in Brazil
% internet user population
27%
ONLINE
ADVERTISING
% total advertising
revenue
10%
€ 2,7B € 1,25B
Source: Brasscom, WOF, McKinsey, Valor, IBGE, Comscore, eMarketer
Digital spendings still shy

23. INFRASTRUCTURE
EDUCATION
PRODUCTIVITY
TAX & SYSTEM
Role of the Digital landscape in unlocking Brazilian Growth

24. Internet – Digital Maturity and contribution to GDP
Brazilian digital ecosystem still a low contributor to GDP growth

25. Productivity & Growth Bottlenecks
Technology solutions
INFRASTRUCTURE
Technology can act everywhere throughout
infrastructure supply-chains with high
efficiency / cost ratio and agility
(Transport, Telecom, Energy)
EDUCATION
E-learning platforms (distance education),
Digital content production, job networks,
University / School efficiency
INDUSTRIAL PRODUCTIVITY
From Price positioning to Value
positioning, Lean processs & Automation
TAX & ADMINISTRATION
Public administration modernization and
efficiency (E-gov, Electronic filling and
accounting system (SPED)
Technology to overcome Brazil Growth Bottlenecks

26. Productivity & Growth Bottlenecks
Technology solutions
INFRASTRUCTURE
Technology can act everywhere throughout
infrastructure supply-chains with high
efficiency / cost ratio and agility
(Transport, Telecom, Energy)
EDUCATION
E-learning platforms (distance education),
Digital content production, job networks,
University / School efficiency
INDUSTRIAL PRODUCTIVITY
From Price positioning to Value
positioning, Lean processs & Automation
TAX & ADMINISTRATION
Public administration modernization and
efficiency (E-gov, Electronic filling and
accounting system (SPED)
Technology to overcome Brazil Growth Bottlenecks

27. Productivity & Growth Bottlenecks
Technology solutions
INFRASTRUCTURE
Technology can act everywhere throughout
infrastructure supply-chains with high
efficiency / cost ratio and agility
(Transport, Telecom, Energy)
EDUCATION
E-learning platforms (distance education),
Digital content production, job networks,
University / School efficiency
INDUSTRIAL PRODUCTIVITY
From Price positioning to Value
positioning, Lean processs & Automation
TAX & ADMINISTRATION
Public administration modernization and
efficiency (E-gov, Electronic filling and
accounting system (SPED)
Technology to overcome Brazil Growth Bottlenecks

28. Productivity & Growth Bottlenecks
Technology solutions
INFRASTRUCTURE
Technology can act everywhere throughout
infrastructure supply-chains with high
efficiency / cost ratio and agility
(Transport, Telecom, Energy)
EDUCATION
E-learning platforms (distance education),
Digital content production, job networks,
University / School efficiency
INDUSTRIAL PRODUCTIVITY
From Price positioning to Value
positioning, Lean processs & Automation
TAX & ADMINISTRATION
Public administration modernization and
efficiency (E-gov, Electronic filling and
accounting system (SPED)
Technology to overcome Brazil Growth Bottlenecks

29. Financial Sector
Agri-Tech
Oil & Gaz - Mining
Aeronautical
Mobile applications & Services
Consumer Digital / Media
Brazilian “Tech forces” (Necessity drives innovation)

30. Brazilian next tech forces ?
Brazilian “Tech forces”

31. Brazilian GDP vs ICT sector (growth)
3x30000%
2.5x
25000%
2x20000%
15000%
1.5x
1x10000%
5000%
0%
2004
2005
2006
2007
2008
GDP
2009
2010
2011
2012
ICT sector
Source: Brasscom,, IBGE,
The ITC sector has constantly over-performed the GDP
2013
-

32. IT for Education vs Education sector (2011-2016)
IT for Health vs Heathcare sector (2011-2016)
% change on a year earlier
5x
% change on a year earlier
500
450
4x
400
350
CAGR
23%
3x
CAGR
24%
300
250
2x
200
150
1x
100
50
0
2011
2012
2013
Education sector growth
2014
2015
2014
Education technology growth
2016
2011
2012
2013
2014
Healthcare sector growth
2015
2014
IT for Health growth
Source: Brasscom,, IBGE,
IT for Education & Health set to strongly over-perform their underlying sector
2016