By Steve Rudderham
All eyes will be on Brazil next summer as it hosts the soccer (real football) World Cup. This is then followed by the Olympic and Paralympics games in Rio de Janeiro in 2016. But beyond the ‘razzmatazz’ and festivities that both tournaments will bring, how will the country benefit economically, and how can the outsourcing industry leverage this focus?
Both the World Cup and Olympics combined are expected to cost Brazil over US$30bn, with the majority of the funding coming from the Brazilian taxpayers. This is not only to pay for new stadiums and facilities, but there is a huge investment being undertaken in the infrastructure of the country to secure economic growth in the longer term by becoming more efficient and attractive to foreign investment.
If Brazil is able to prepare itself in time for the World Cup, the investment pales in comparison with the enormous benefits to be won. A recent Ernst and Young study predicted that the potential economic benefits alone could exceed US$120bn. Brazil will not only benefit from increased income per capita, primarily due to creation of jobs, but more importantly it will gain greater visibility and credibility from joining the ranks of the world’s most developed nations.
Much needed investment in infrastructure, including technology, roads, and transportation, will increase the country’s efficiency, making it more attractive to do business in Brazil. Two significant challenges are the expansion of airports in major cities and the development of new hotels to accommodate the 3.6 million additional tourists that are expected to attend the World Cup. These are quite complex and challenging tasks, to say the least, but the ability to reach an international audience in the billions brings forth a plethora of opportunities to help build the country’s positive image and reputation.
Hosting these games successfully will benefit the country as well as the region more than any of the actual financial gains expected. But how can the outsourcing industry jump on this and project its benefits and advancement to the world market? Four areas to consider:
A Change in Perception
Beyond the positive images of Copacabana Beach, Brazil has suffered from the worldwide media focusing on the military cleanup in the slums, safety of tourists and corruption within the government. The whole LatAm region suffers with similar perceptions but positive reports on the success of the games can help address these concerns. The government recognizes that it cannot fail with safety, so President Dilma Rousseff is creating a new federal government authority, the Special Secretariat for the Security of Large Events (Secretaria Extraordinária de Segurança para Grandes Eventos), which will be responsible for coordinating and integrating all security forces in Brazil for major international events. The industry needs to piggyback on the media and stimulate more positive images and information about the region. Positive reinforcement – via hard facts and data; not mainstream dialogue – is essential for getting the word out to the international community that the LATAM region is safe and open for business.
Roussef recently announced a commitment to spend US$66bn on longer term infrastructure projects. This investment is over the next 15 years but still sends a strong message that Brazil wants to play in the global arena. One of the main areas of investment will be in information technology and communications. The industry is expected to attract over $10bn of investment and the ITO players have been getting heavily involved in this arena. For example, all host cities will have installed 4G networks before the tournament next year. This will be a leap forward for many of these cities which currently do not even have adequate 3G network coverage. It will certainly represent the removal of a huge infrastructure bottleneck, finally connecting a large part of the population in a country where broadband internet reaches less than 15% of homes. This has the potential to unlock a new range of entrepreneurial endeavors that will take advantage of this infrastructure to create new online and mobile services.
Proven Organization and Execution
Just like with London in 2012, there will be a lot of focus on the organization and execution of the events, and likely a lot of doubts ahead of time to be addressed. But learning from London, which executed a near perfect games and improved people’s perceptions, there is a great opportunity to show the world that the people of Brazil have the organizational excellence necessary to succeed. Research carried out by Landor Associates has found that the London Olympics marked a considerable shift towards a more positive image of the country. However, of concern to Brazil is that the research showed that the perception of innovation was not improved during the games, and for a country trying to drive it’s technology capabilities, this will be key. The outsourcing industry in Brazil should take note early and ensure that innovative products and the creative messages are executed at the tournaments.
It may seem obvious but businesses either embrace or completely shy away from having clients visit during these times. London 2012 suffered with a downturn in “non-games tourism” as people avoided the city but Brazil must strive to avoid this. Success will come from the ability of businesses to mobilize and engage with clients, creating a positive association of the country and its culture. Companies must use this opportunity to capitalize on the positive image of Brazil to encourage clients and investors to invest and do business in Brazil and the LatAm region. By bringing clients into the country during the tournaments, they will be able to highlight Brazil’s strengths which include innovation, a large trained labor pool, economic and political stability, and proven organization and execution on a large scale.
The Brazilian ITO/BPO market is already recognized as one the strongest emerging markets in the world and it is increasing rapidly. The higher revenues come from Custom Application Development, followed by Infrastructure Services, Business Process Outsourcing, and IT Consulting Services.The already strong markets of Oil and Gas, and Life Sciences will continue to grow and can also leverage the tournaments, which in turn can provide growth opportunities within the outsourcing industry.
The games can be a catalyst for not only Brazil, but the whole Latin America region, which will benefit from Brazil’s image as a modern and efficient country. Providers should already be planning how to leverage this unique window of opportunity, work as a community to improve the perception of the country and provide the platform to build confidence and accelerate growth in the region.
Steve has more than 15 years of experience in the nearshore outsourcing industry, most notably in senior leadership roles with Capgemini and Genpact. A board member of IAOP Latin America and the Nearshore Executive Alliance, he is currently an F&A Product Offering Lead at Accenture BPO