Brazilian IT sector sees growth amid COVID-19 crisis

Driven by demands for digital transformation, the number of sector companies in the country has grown, according to research.
Written by Angelica Mari, Contributing Writer

The information technology (IT) sector in Brazil has seen an increase in the number of businesses created over the last three years as digital transformation within companies accelerates, according to research.

Some 85,000 new businesses in the technology sector have been created in 2020, an increase of 25.1% in 2019, according to the study carried out by the Santa Catarina Technology Association (Acate) in partnership with technology firm Neoway, with support from the Brazilian Funding Authority for Studies and Projects (FINEP).

"We have seen sustainable growth, despite the pandemic. With the acceleration of digital transformation, we had an increase in revenues, [the emergence of] new companies, and [an increased] demand for staff", said Iomani Engelmann, president at Acate.

Brazil currently has 422,300 companies active in the IT sector, the study noted. The state of Santa Catarina has seen the highest growth in the country (63.2%) in the number of technology businesses created between 2015 and 2020. The growth rate for the state is well above the national average (26.1%), according to the research.

Concerning the number of tech entrepreneurs, however, the state of São Paulo stands out. According to the study, of the 542,000 entrepreneurs in the IT sector in Brazil, around 197,000 (36.4%) operate from São Paulo. The Brazilian state is followed by Rio de Janeiro, home to 50,000 IT entrepreneurs (9.2%), and the state of Minas Gerais, where 39,000 entrepreneurs (7.2%) in the information technology sector are based.

When it comes to revenue, the country's information technology segment has reached 426.9 billion reais ($76.7 billion) in 2020 - the equivalent of 5.6% of the country's GDP, according to the study.

Nearly half of the IT sector's revenue (48.4%) is generated in the state of São Paulo, at approximately 206 billion reais ($36.9 billion), the study noted. In terms of participation in the IT sector's revenue in 2020, São Paulo is followed by the Brazilian states of Rio de Janeiro (10%), Minas Gerais (6.3%) and the Rio Grande do Sul (5.4%).

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