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by:
Jack M. Nilles
JALA International, Inc.
Los Angeles and Bonn, November 1999
Contact:
Gesellschaft für Kommunikations- und Technologieforschung mbH, Oxfordstr. 2, D-53111 Bonn
Tel.: (+49 02 2) 9 85 30-0, Fax: (+49 02 28) 9 85 30-12, Email: info@empirica.com, http://www.empirica.com, http://www.ecatt.com, Contact: Werner B. Korte
4 Brazil
4.1 The economy
Like Argentina, Brazil's entry into the information age is hampered by low average income, high telecommunications prices, and considerable instability in financial markets. Brazil is at a greater disadvantage than Argentina since the average GNP per capita is only 63% of Argentina's. However, Brazil's large population can more than make up in numbers what it lacks in percentages, when compared with other countries. As can be seen from Figure 9, the information component of the Brazilian workforce is proportionally lower than that of more developed countries, but still constitutes a substantial number-about 11.5 million in the year 2000.
Also like most countries in the world, the telecommunications infrastructure historically was government owned. A holding company, Telebrás, controlled all the 28 operating subsidiaries in Brazil. The federal government of Brazil was the controlling shareholder. Telebrás was broken up in 1998 as part of Brazil's telecommunications deregulation and privatization process and the federal government sold its shares to private concerns. Prior to 1995 the government closely restricted Internet access but, in 1995, first allowed commercial access to the Internet. Still, the international carrier, Embratel, charged significantly higher rates for calls originating in Brazil, thereby acting as a barrier to international Internet access by Brazilians. The cost of a telephone call to the US from Brazil is 156 times the cost of a local call. Figure 10 shows the estimated number of Internet users.
Figure 9: Estimated composition of the workforce in Brazil
Figure 10: Estimated Internet users in Brazil
Curiously, an explosion of interest in the Internet was triggered by a popular Brazilian soap opera in 1995. The novela, titled Explode Coração, had both heroes and villains connected via the Internet. With a TV audience share of 50%, reaction to the series resulted in increased pressure on the government to ease Internet access. It also stimulated the initiation of a similar series on, rather than about, the Internet.
4.2 E-commerce
Brazil has taken the lead in facilitating electronic commerce within Latin America. As one of the largest Internet users among developing nations, with an 88% share of Latin American e-commerce, Brazil has proposed many modifications to a WTO (World Trade Organisation) study program geared toward analyzing all aspects of e-commerce pertaining to Latin America. The Brazilian government is particularly concerned with import taxes charged on e-commerce related activities.
In spite of its worries, the Brazilian government, along with a variety of Brazilian companies, continues to pursue its interests in electronic commerce. In fact, MSS Telecommunications, an electronic commerce company representing AT&T's interests in Brazil, is in the process of creating an Internet site in which information will be available on all Brazilian companies that are seeking to sell their products online. The site, known as Tradegate, (www.tradegatebr.com) illustrates production, commerce, and service opportunities available in Brazil in a web-based format.
Large companies are taking advantage of electronic commerce opportunities as well. Volkswagen do Brasil has established an extranet computer network in order to create electronic links with all of its suppliers. The supplier network was scheduled to be fully functional by June 1999. As mentioned in one of the case studies for this project, Ingram Micro also has affiliations in Brazil.
Bradesco, a leading private sector bank that has helped launch electronic commerce systems throughout Brazil, has reported positive results in conjunction with its partnership with Brazil's Di Monaco chocolate factory in Sao Paulo. On average, Di Monaco reports receiving 150 electronic orders per day at an average price of USD16 per order. Overall, orders received via electronic commerce represent one-half of all orders to the factory. Bradesco acquired a 30% stake in the operations of the Brazilian subsidiary GE Information Services do Brasil. The acquisition will allow Bradesco to offer electronic data interchange services (EDI) to its 500,000 corporate clients. According to industry analysts, this acquisition will establish Brazil as the forerunner of electronic commerce integration among Latin American countries.
Figure 11: Electronic Commerce in Brazil.
While Brazil is considered to be at the forefront of electronic commerce in Latin America, there have been a few setbacks within Brazilian firms in regard to realizing economic gains from electronic commerce applications. In fact, business-to-consumer sales have fallen below the expected volume for many of the Brazilian virtual shopping centers. Analysts site a lack of security as a consumer hurdle, and as a result, the administrators of these virtual shopping centers are investing in Internet security measures. Brazil has a proportionately higher number of web sites in its dominant language than does Argentina, thereby easing the entry of new e-commerce users.
Figure 11 shows the current estimate of domestic electronic commerce in Brazil. Like Argentina, the level of electronic commerce with firms outside Brazil is likely to be of slightly higher than comparable size.
4.3 New Ways to Work
Although there was a 1999, EC-sponsored, symposium on telework in Rio de Janeiro, there is no reliable source of information on the extent of teleworking in Brazil. Consequently, the information in Figure 12 is entirely the result of the analysis of Brazil's economy and workforce.
Figure 12: Estimated level of telework in Brazil
