By Filipe Pacheco

Much time, many procedures to start up this ice cream parlor in Bahia.

HAS BRAZIL BECOME MORE READY TO COMPETE with developed economies and emerging markets? Technologically, the answer looks like a definite yes. From a “difficulty of doing business” standpoint, work remains.

According to The Global Competitiveness Report 2011-2012, compiled by the World Economic Forum, Brazil is ranked 53rd out of 142 countries when it comes to competitiveness for business of all kinds, and behind a few other Latin American economies such as Chile (31st), Barbados (42nd), and Panama (49th). The top position globally is occupied by Switzerland, and within the Americas, by the United States (#5 overall).

In the last edition of the report, Brazil was #58. The research survey captures the perceptions of more than 13,000 business leaders from the benchmarked 142 countries.

The WEF ranking is based on 12 pillars, which consider factors such as the strength of the private and public institutions in the country; labor; infrastructure; macroeconomic environment; education; financial market development; ethics and corruption; and business sophistication.

Brazil earned some of its best grades in two of the tech pillars: technological readiness, which considers the availability of the latest technologies, technology absorption, and FDI and technology transfers; and use of information and communications technology (ICT), including the Internet, broadband subscriptions, bandwidth, and mobile telephone accounts. However, adoption of technology by the population as a whole was graded 2.74.

Business Concerns

But in several other categories, the scores are worth noting by anyone considering outsourcing technology services from Brazil. Quality of math and science education — which can be seen as key to providing the smart workers needed for IT services — was rated 127th out of 142 countries. On the other hand, the rating for on-the-job training was very good, at 32nd.

Reflecting the often-heard complaint that Brazil is not an easy place to do business, respondents scored Brazil rather poorly in several categories:

• extent and effects of taxation — #142, or the worst

• burden of government regulation — #142

• the number of procedures to start a business — #134, quite near the worst

• hiring and firing practices — #128

• total tax rate as % of profits — #133

 

Progress in Technology and Innovation

Brazil’s total overall score in the rankings was 4.32, but its technological adoption grade was a good bit higher, 5.21 — compounded by a 5.39 for availability of latest technologies; 5.16 for technology absorption; and 5.08 for FDI and technology transfer. Interesting to note that all of them are above the overall grade of the country.

Compared to other Latin American countries, Brazil looks good in terms of technological readiness, scoring a little below leader Chile. There were similar results for technology adoption.

Another measure that worked in favor of Brazil’s final score was “Innovation,” which considers, among other things, the capacity for innovation, quality of scientific research institutions, company spending on R&D, and availability of scientists and engineers. The country’s global ranking in that category was 44th; not bad at all out of 142 countries.

Another favorable point for Brazil is the size of its domestic market, which ranked 10th in the world, and the size of its GDP, which is the 8th best on the planet.

How does Brazil stack up against its BRIC counterparts? It scored second-best overall, just behind China (ranked 26th overall in the world), and followed by India and Russia. When it comes to technological readiness within those emerging economies, Brazil has the best grades of all of them. The country is ahead of China by 0.41 points, of India by 0.67 points, and of Russia by 0.32 points.

In the Innovation category, China rules (with 3.92), India right after (with 3.58), Brazil a little behind (with 3.50), and Russia last (with 3.14).

It might be tempting to dismiss the WEF study as just a bunch of numbers, but it’s worth remembering that the numbers are developed in conjunction with some prominent and respected research firms. If nothing else, they serve as a comparative assessment that can give a country’s business and government leaders an independent perspective on strengths and weaknesses, and at least something to strive for.