Case 1: Entrepreneurship in the Brazilian offshoring industry
Brazil is one of the nations included in BRIC (Brazil, Russia, India, and China). In the past, Brazil’s outsourcing industry has been the smallest of the four BRIC nations. This is very surprising due to the close proximity to the United States and the current trend of “near-shoring”. However, due to recent governmental backing and inflows of capital Brazil has begun to improve and could possibly overtake Russia, India and China in the offshoring industry. The most promising sector in Brazil is their IT sector.
Capital Access Index 2009
Access to Capital
Brazil is the fourth-best country in Latin America for access to capital for entrepreneurs. Much of this improvement can be seen from their significant advances in bond market development and alternative sources of capital[1]. At the end of 2008, local and foreign investors had committed $28 billion in venture and private equity capital to Brazilian companies. That's up from $6 billion in 2004, amounting to a hearty 50% compound annual growth rate over the last four years[2]. On June 25 2009, Brazilian stock exchange Bovespa hosted the world’s largest IPO, a $4.3 billion offering by Brazilian credit-card processor VisaNet. Conditions in Brazil have been improving steadily. The country has achieved macroeconomic stability and institutional maturity and is now undergoing broad and fast-paced expansion, driven by an increase in income and social ascension as well as an increasingly important position in international trade. As well, Foreign Direct Investment (FDI) will reach an annual record of US$60 billion in 2011[8].
Even though entrepreneurs are currently enjoying easy access to capital, it is a concern that co...
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...et and Trade Profile, December 2011, Visit Britain. http://www.visitbritain.org/Images/Brazil_tcm29-14673.pdf
[10]Nes, Egil, May 23, 2011, The Brazil Business. http://thebrazilbusiness.com/article/trends-of-doing-business-in-brazil-in-2011
[11] Brazil Economic Outlook At A Glance, June 26, 2011, Finance N Investment.com. http://www.financeninvestments.com/economics/brazil-gdp-growth.html
[12]Background Note: Brazil, November 30, 2011, U.S. Department of State. http://www.state.gov/r/pa/ei/bgn/35640.htm
[13] Baby Steps, September 17, 2011, The Economist. http://www.economist.com/node/21529045
[14] Comparing Exports of Goods Among BRIC Nations, November 8, 2011, Seeking Alpha. http://seekingalpha.com/article/306378-comparing-exports-of-goods-among-bric-nations
[15]Underwood, Graham, 2012, sourcingfocus.com. http://www.sourcingfocus.com/site/opinionscomments/757/
The National Brazilian Development Bank (BNDES) continues to invest heavily in the market, providing almost R$274 billion for the period of 2010 – 2013 (up 38% from 2005 – 2008). Nevertheless, the country must continue to seek new ways to attract private capital, by revisiting institutional and regulatory frameworks, in order to have the necessary investment levels that will sustain the growing economy and allow the delivery of successful projects.
Globalisation has been crucial to the economic and social development of Brazil. In the late twentieth century Brazil face years of economic, political and social instability experiencing high inflation, high income inequality and rapidly growing poverty. However after a change of government in the 1990s and large structural changes in both the economic and social landscapes, the brazilian economy has been experiencing a growing middle class and reduced income gap. Since the start of the 21st century, brazil has benefitted from the move to a more global economy.
The purpose of this paper is to demonstrate how Brazil, a country with an extremely high rate of inflation and low growth, positioned itself as the 7th largest economy of the world and what are the challenges that the country is facing. First of all, the Real Plan of Fernando Henrique Cardoso and how it helped the country to stabilize its economy and drop down the inflation rate will be discussed. Secondly, how his successor’s policies, Luis Inácio Lula da Silva, improved country’s economy. At the end the challenges that Dilma Vana Rousseff, the current president, is facing will be discussed.
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.
Brazil is both the largest and most populous country in South America. It is the 5th largest country worldwide in terms of both area (more than 8.5 Mio. km2 ) and habitants (appr. 190 million). The largest city is Sao Paulo which is simultaneously the country's capital; official language is Portuguese. According to the WorldBank classification for countries, Brazil - with a GDP of 1,5 bn. US $ in 2005 and a per capita GPD of appr. 8.500 US - can be considered as an upper middle income country and therefore classified as an industrializing country, aligned with the classification as one of the big emerging markets (BEM) next to Argentina and Mexico. Per capita income is constantly increasing as well as literacy rate (current illiteracy rate 8%). Due to its high population rate (large labour pool), its vast natural resources and its geographical position in the centre of South America, it bears enormous growth potential in the near future. Aligned with an increasing currency stability, international companies have heavily invested in Brazil during the past decade. According to CIA World Factbook, Brazil has the 11th largest PPP in 2004 worldwide and today has a well established middle income economy with wide variations in levels of development. Thus, today Brazil is South America's leading economic power and a regional leader.
Global outsourcing first became popular in the apparel and textile manufacturing industries during the late 1960’s and 1970’s. Then it continued with automotive, computers, electronics, and other forms of assembly work during the 1980’s. Most recently, during the 1990’s, now and also in the future the outsourcing is focused on ‘knowledge’ work such as work in software design, technical support, telemarketing, call centers, and back office work. By the end of 2009 Information Technology outsourcing (ITO) revenues were over US $250 Billion while for Business Process Outsourcing (BPO) were more than US$ 140 billion. By 2006, over 200 firms from the Forbes 2000 companies and almost half of the Top Global 250 had offshored IT and business process activities. By 2008 India was managing 65% of the ITO and 43% of the BPO market. In general, India, China, Latin America, Philippines and Mexico have been the top locations for offshoring. The United States is a major player in the offshoring of IT and business process, however, Europe is also catching up. The growth of global sourcing sparked due to the technological advances in the telecommunications industry and the internet w...
In the current economic times the development and growth of any economy has come to a near stop or at least to a drastic slow down. The face of the global economic environment has changed and many new countries are starting to change the way their country and the rest of the world does business. One such nation is Brazil, who has turned around their own economic troubles and is becoming one of the fastest growing economies in the world (World Factbook). Brazil has started developing its economy and using the opportunity to achieve a level of respect in the world.
Sao Paulo in Brazil has become a potential business hub and unarguably the largest financial center in Latin America.
Outsourcing has been around for many years. In this paper, I will discuss some of the history of outsourcing, the good things about outsourcing, and the bad things about outsourcing. Outsourcing is important because many companies rely on it in order to get many different products and services to their facility on time and in good shape. Outsourcing is a huge part of the business industry today. Any business can be affected by outsourcing.
For entrepreneurs whom are willing to accept the risk associated with starting a business, some have made themselves extremely wealthy. Although our economy is focused on capitalism as a means of promo...
In the case of Brazil, nowadays this is one of the most attractive markets in the world, recently Brazil has experienced strong economic growth; analysts argue with Russia, China and India (BRIC) Brazil will be the largest and most influential economies in near future. Notwithstanding, the promissory economic future, investment in Brazil has some threats and risks that should be taking into account: exist some grade of cultural difference between both countries that could affect the profitability of investment; however this will be a good option to invest in brazil, the suggestion is focus in most important cities ( Rio and Sao Paulo).
Adelman, P. J., & Marks, A. M. (2010). Entrepreneurial finance. (5 ed.). Bedford, Texas: Prentice Hall.
Access to capital and credit at various stages in the business life cycle is identified as the major hurdle by the entrepreneurs. For many small firms and most start-ups, the personal funds of the business owners and entrepreneur and those of relatives and acquaintances constitute as the major source of capital. For many small businesses, especially during the early years of their operation, credit is simply not available. For many others, the limited available credit is not through bank loans. Due to this many of them rely on multiple credit card balances and home equity loans as major sources of credit for start-up firm. Because banks are bound by laws and regulations to prudent lending standards that require them a risk management assessment for each loan made. These regulations were made more vigor during the late 1980'' and early 1990 . Banks always found that lending to manufacturing firm with hard asset such as property, equipment, and inventory has always been easier than lending to today's expanding service sector firms. Because the service sector firms own few hard asses, therefor lending judgment have to be based in terms of character, markets, and cashflow, which make it difficult to the bank to meet the regulations for the approval of the loan. Additional, the banking industry, as well as the entire financial sector of the
"Entrepreneurs who start and build new businesses are more celebrated than studied. They embody, in the popular imagination and in the eyes of some scholars, the virtues of "boldness, ingenuity, leadership, persistence and determination." Policymakers see them as a crucial source of employment and productivity growth. Yet our systematic knowledge of how entrepreneurs start and grow their businesses is limited. The activity does not occupy a prominent place in the study of business and economics.