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2012 attractiveness survey - Brazil - Boosting Brazils growth an action plan - EY - Global

2012 attractiveness survey: Brazil

Boosting Brazil’s growth: an action plan

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83% of the respondents believe Brazil’s attractiveness will improve over the next three years.

Action 1: Improve skills and secure the operational environment

Of our survey respondents, 29% believe that development of education and skills will have a high impact on Brazil’s attractiveness. Brazil’s steady growth in the past decade has amplified the industry’s requirement for a qualified and productive workforce.

The country, however, faces a shortage of skilled labor with the gap being more pronounced in the case of firms willing to hire managers, technicians and engineers.

Amid this strong demand for skilled professionals, development of Brazil’s education system is an imperative step. Investing in major infrastructure and urban projects was cited by 28.5% of respondents as a key focus area to enhance Brazil’s prospects, and the Government has been undertaking several measures to improve the country’s infrastructure.

Action 2: Build innovation capacity and diversify sectors

Brazil needs to focus on improving education and training in new technologies. A large number of investors cited the lack of skilled workforce in the country as a problem. The country’s spending on R&D needs to ramp up. In terms of R&D as a percentage of GDP, Brazil ranked 30th, below other RGMs such as the Czech Republic (23rd) and China (24th) in the 2011 Innovation Index. The Government is taking steps to improve this situation

Brazil provides tax incentives to companies aiming to stimulate an environment of innovation across the country and enhance its competitiveness in domestic as well as foreign markets. For example, in April 2012, the Government of Brazil announced four criteria for automakers to take advantage of a reduction in vehicle tax.

The Brazilian Government has also been undertaking measures to encourage cooperation between universities and industry. As a direct result, 27% of all patents in Brazil are owned by universities.

Action 3: Promote Brazil’s regions

Investors consider infrastructure growth a key attraction in Brazil. When asked about projects that would increase the attractiveness of Brazil’s cities, infrastructure development was the first choice for more than half of the respondents.

The Brazilian Government has been undertaking significant infrastructure spending as part of its multi-year PAC program, aiming to promote growth by creating an efficient and extensive infrastructure network across all regions of the country.

This is expected to result in further economic growth and greater influx of foreign investment into Brazil.

The hosting of the forthcoming FIFA World Cup and Olympic Games, cited by 27.4% of the investors, will also enhance Brazilian cities’ prospects. The Government plans to improve infrastructure across the cities hosting these events

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EY - Capturing the momentum

EY's 2012 Brazil attractiveness survey video

EY - 2012 Brazil attractiveness survey video

Brazil’s rising momentum is capturing international investors’ attention. Do you want to find out why? Watch our video to learn more.

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