1. Use the theories of international trade and investment in this module to help explain Brazil’s intentions and actions regarding the international information technology sector.

2. What recommendations would you give to the Brazilian government and its outsourcing industry in order to improve their prospects for success in building a strong international competitive position in the information technology outsourcing business? 

This minicase explores the issue of outsourcing and how countries may compete to be the destination for outsourced activities. The specific example is of Brazil and how it has emerged as an alternative to countries such as India, China, or various Central or Eastern European nations for the outsourcing of sophisticated IT activities. Brazil has an advanced telecommunications and network services infrastructure, sometimes rated above those of nations such as India or China. Brazil has a large base of jobs in the IT sector and a strong tradition of producing competent graduates from engineering schools. Brazil’s banking sector is highly automated and a dynamic marketplace for IT software and support services, helping to encourage domestic demand for advanced IT services. Brazilian wage rates are significantly below those in the USA, and recent devaluations of the real, Brazil’s currency, may further enhance the country’s competitiveness in this regard. With lower employee turnover rates and attractive levels of total operating costs, as well as less time zone difference than found for European or Asian outsourcing countries, Brazil can be attractive for real-time services. Brazilian culture and business practices also tend to be more similar to those in the U.S. than may be the case for China, for example.