IT investment to grow 6% in Brazil in 2014

Organizations will still commit resources to technology despite economic slowdown, says study
Written by Angelica Mari, Contributing Writer

Investments in technology in 2014 should grow in Brazil next year, despite the country's not-so-bullish economic climate.

A recent survey that polled 1,000 decision makers in large and medium enterprises estimates that tech investment should grow by 6 percent to R$71.2bn ($30.6bn) in the coming year.

The annual study, carried out by Instituto Sem Fronteiras (ISF) on IT investment trends says that due to low GDP growth and more conservative budgeting, this is the second year in a row that growth rates stay at 6 percent - historically, IT investment growth in Brazil remained at an average 10 percent.

According to the research director at ISF Ivair Rodrigues, some developments that have taken place in the last couple of years have prompted a stagnation in IT investment growth in Brazil.

"In 2007, expenditure on internal labor accounted for 25 percent of IT budgets. Today, that percentage is 36 percent and that is set to keep on increasing due to lack of manpower in the country, which increases cost and limits new IT investments," says Rodrigues.

"It is important to mention that the rise in the dollar against the real of over 14 percent this year affects the purchasing power of companies acquiring hardware and software, which are items with pricing pegged to the dollar," the analyst adds.

Some 46 percent of respondents mentioned that their IT budget are lower than desired, according to the survey. But some 46 percent of respondents intend to upgrade their IT infrastructure in 2014, a 50 percent increase in relation to 2013.

According to ISF's Rodrigues, the challenge will be to reconcile these plans with the budget. To that end, 45 percent of those polled will try to renegotiate the current contracts.

Another noteworthy finding of the survey is that investments in training for IT staff will nearly double in 2014.

"Without skilled labor there is no innovation - and this is the big challenge for companies in Brazil," says Rodrigues.

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