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Laying the foundations of a new Brazilian economy

November 6, 2017

Genius Wong   

Genius Wong, Executive Vice President – Core and Next-Gen Connectivity Services, and Chief Technology Officer

In my previous blog post, I discussed how Brazil’s Olympic legacy has been undermined by its lack of infrastructure and ubiquitous technology. So, what are the next steps to stimulating a more holistic and long-term economic recovery in South America’s largest economy?

There are three main areas of discussion which I will address in this blog. The first is the impact of smarter infrastructure and enterprise schemes. The second is connectivity as a utility for the people. Finally, we will look at the impact of connectivity on the wider economy.

Create smart business hubs

To maximise the value of economic centres such as Rio de Janeiro and Sao Paulo, Brazil can look to other nations and cities which have invested in smart infrastructure and established technology-centric business hubs.

A great example of a smart city project from an emerging market that is already underway is in the western state of Gujarat in India. Gujarat International Finance Tec-City (GIFT) is looking to attract trillions of dollars of investment as the country’s first fully-fledged smart city, but also a rival for Hong Kong, London, New York City and Singapore as a major global financial services centre. The Bombay Stock Exchange has already set up an international exchange in GIFT, and the data centre and connectivity infrastructure to underpin the smart systems of the city have been deployed.

Moving to Europe, Barcelona is already one of the world’s best connected smart cities, but the Catalan capital is also using technology to encourage commerce and investment. Barcinno, a website dedicated to the tech startup scene in Barcelona, shows that there are dozens of accelerators and incubators throughout Catalunya designed to get fledgling tech businesses off the ground.

As well as startups such as Cl3ver and Trovit, the poster-children of Barcelona’s technology love affair, the Gran Via exhibition centre attracts thousands of delegates each year through global events such as Mobile World Congress (MWC), IoT Solutions World Congress and Smart City Expo. 

Turn on the connectivity tap

In a world where connectivity is akin to running water, technology can be used to connect people to sources of employment, education and support.

One extreme example of this is displayed by the 2017 edition of the Asian Development Bank’s (ADB) Pacific Economy Monitor, which found that connectivity is no longer a luxury in the Pacific but is necessary to economic prosperity.

The report suggests that an estimated 75% of Pacific economies will be connected to submarine cables in the next 2-3 years – with subsea cable projects being developed in the Cook Islands, Kiribati, Nauru, Palau, Samoa and Tonga.

These technological advances will change the economic landscape of the Pacific by reducing the limitations posed by physical distance and other geographic obstacles. While Brazil is a huge economy in comparison, as we see in the Pacific, high-speed connectivity can bring in outlier economies which are located away from its urban powerhouses.

Connecting Brazilian business

Brazil boasts a wealth of natural resources and, other than a brief blip in 2015 when it posted a trade deficit, it generally exports more than it imports. This is not true of its biggest trade partner, the USA, with which Brazil has a trade deficit.

Technology plays a vital role in increasing productivity. Brazil’s biggest export is currently soybeans, so we can see examples from other countries where smart technologies have positively impacted agriculture.

In Senegal, the West Africa Agricultural Productivity Program (WAAPP) and its partners have developed seven new high-yielding, early-maturing, drought resistant varieties of sorghum and millet. The Internet of Things (IoT) and data analytics has revolutionised agriculture and modern agricultural techniques could future proof Brazil’s soybean industry.

High-speed connections

For more tertiary and city-based industries such as financial services, commercial sectors, media and entertainment services, connectivity is now the lifeblood. Reports show that Brazil’s progress in terms of its technological infrastructure slowed last year.

However, there is an appetite for a technological evolution. In 2016, Brazil borrowed $200m from the World Bank to pour into its transport infrastructure. For high-speed connectivity, there is a massive opportunity for service providers to complement this investment.

A major proponent of this is Seaborn Networks’ with its Seabras-1 subsea cable system, which will connect Brazilian enterprises and service providers to Tata Communications’ global subsea fibre optic cable network, TGN.  Seabras-1 is the most direct route between the business hubs of Sao Paulo and New York, bypassing the congested area around Miami.

Access to Tata Communications’ network connects Brazil to the rest of the world’s major economies, totalling up to around 97% of the global GDP. High-speed connections between Rio de Janeiro and Sao Paulo with New York, London and fellow BRIC economies in EMEA and APAC will mark the beginning of a new connected era for Brazil.

This will enable Brazil to develop smarter centres of commerce, connect agriculture and outlier economies and experience better communications with international trading partners. In turn, these steps will pave the way to Brazil fulfilling its potential as a South American economic superpower.

Read one of our previous blogs on the major digital transformation challenges that businesses are facing.