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Another Perspective


When a country spends more on computing, its economic growth is likely to be healthier – so Gartner says in its most recent discussion of IT spending in the BRIC countries.  Gartner made this declaration at its most recent dog-and-pony show in Sao Paolo during mid-September.  Brazil leads the BRIC countries and possibly the world in the portion of gross domestic product (GDP) it pumps into computing and its pace of spending on IT will grow during the next few years.  The laggard BRIC, it turns out, is Russia.

Last year, end user companies in Brazil spent $88 billion, or 8.6 percent of GDP, on information technology.  Russia, by contrast, spent $35 billion, or 4.1 percent of GDP, on IT.  By my reckoning (with a little help from statisticians at the International Monetary Fund), the world as a whole pumped $3,225 billion, 5.6 percent of aggregate GDP, into computing.

The ecomic giant of South America
becomes a formidible force in technology

This year, Gartner estimates, Brazil's expenditures will be about $101 billion and they will rise to $128 billion in 2013.  During the same period, Russia's IT expenditures will rise from $37 billion to $43 billion; India's computing bill will jump from $67 billion to $89 billion; and China's IT outlays will rise from $217 billion to $261 billion.  By 2013, worldwide spending on IT will top $3,765 billion.

Despite these increases, total computing and telecommunication outlays for the world as understood by Gartner will fall from this year's 5.4 percent of GDP to 5.2 percent.  If we are building a smarter planet, as IBM keeps suggesting we are, then the extra smarts aren't coming from investments in computers, at least not according to Gartner.  But that's not the way it will be in Brazil, nor in India.

Brazil's burgeoning IT expenditures will hit 9.6 percent of a rising GDP this year and increase to 10.3 percent of GDP in 2013.  India, spending 5.6 percent of its GDP on IT in 2010 will also accelerate its pace, spending 6.0 percent of GDP on IT in 2013.  China, spending 5.8 percent of GDP on computing this year, will temper spending relative to the size of its economy and put 5.5 percent of GDP into IT in 2013.  Russia, expected to spend 4.1 percent of GDP on computing this year, is predicted to bump up its computing expenditures to 4.4 percent of GDP by 2013, but, as I have pointed out, Russia will still be spending less than other BRIC nations and less than the world as a whole.  (I've aggregated the Gartner data and some IMF statistics into a little table available here.) (Gartner has decided to share a bit more of its current economic outlook here.)

China and India are not only big buyers of IT; they are also big sellers.  China's factories churn out client devices galore and, increasingly, servers, too.  India is the epicenter of computer services and software, home of the part of IBM customers pay for thinking and also the country from which IBM controls its global supply chain.  Russia is, for the most part, a buyer.  Its contribution to computing, if contribution is the right word, has been in spamming and hacking.  Script kiddies and other mischief-makers in the former Soviet Union have earned a reputation as the villains most likely to steal your identity or trash your computer.  If Russia could harness its gifted, twisted hotshots it could probably churn out enough iPhone apps to offset its agricultural misfortune, although good water management might do the same economic job without enriching so many obnoxious software geeks.

But Brazil, a country named after Terry Gilliam's 1985 film (Note: surely that is backwards--TPM), just doesn't fit the pattern.  It is a dynamic, rebellious nation that gambles in frightening ways with its wonderful natural resources, some of them in thongs on Ipanema beach right this minute.  Brazil manufactures client products for mainly domestic consumption, notably at Positivo Informática, and it could well become a both an international player and a source of servers during the next few years.  The country has made quite an impact with its Embraer aircraft company; it may well do the same, or more, in computing.

Stafford Beer
Stafford Beer
On his lifelong journey from London to Toronto via Chile,
he more or less invented the intellectual disciplines
that became operations research

Brazil has embarked on a program to improve the availability of broadband Internet with an emphasis on provisioning technology in classrooms.  Rio de Janeiro will host the Olympics in 2016, and Brazil would like the occasion to provide it with not merely a tourist attraction but also an industrial showcase.

But Brazil faces significant challenges, including the difficulty it has had elevating an urban peasantry in an era that militates against the establishment of low-wage manufacturing industries outside Asia.  Somehow, Brazil must find a way to enable its slum-dwellers to enjoy productive lives, or at least become less burdensome until they can raise a generation of universally educated children.

These days, low-tech factory jobs are most abundant in nations that have some kind of social safety net or that have a political structure that can suppress rebellions due to the lack of a safety net.  Brazil does not appear to have any easy solutions at hand, but it does have an oil industry that can yield enough wealth to let the country pursue various ways to propel itself toward the economic velocity required to escape the low orbit that is common to the offspring of Iberian colonization.  And it seems to have the political will to attempt a redistribution of opportunity, although it is about to get another chance to vote itself into some surprises.

The history of South America includes at least one significant attempt to use technology as part of a national strategy aimed at achieving a grand social and political vision.  That attempt was made on the west edge of the continent, during the brief and tragic reign of the Salvador Allende regime in Chile.  At the time, Chile dreamed of understanding and perhaps managing its economy with the aid of advanced techniques and technology pioneered in industry, a project that was put under the leadership of visionary cyberneticist Stafford Beer.  Brazil might not want a rerun of the Allende experience, particularly its destruction by the Pinochet coup, but it might embrace a vision of information technology that only an economically youthful nation, which Brazil seems to be, could hold.  And it might choose a leader with a deep commitment to life, for which physician Allende was trained, rather than a commitment to death, as under his disgraceful successor.

So, it turns out, Gartner may be onto something, making a big push for presence in Brazil.  The lusaphone country's more intelligent leaders are well aware that Brazil's oil wealth provides a mixed blessing, that its other natural resources will be to some extent consumed, and that its ecological treasures might not get the husbandry they so obviously need fast enough or furiously enough.  The nation of Brazil may understand that the quality of its future will depend on sophisticated technologies far more than the exploitation of natural blessings.  In that case, computing has the potential to be a vital component of Brazil's emergence into the first world and a source of enormous respectability.

It might not take very long for the possibilities of success and of failure to emerge.  If Gartner's projections are more or less on target, Brazil will enjoy the potential to become a world power in computing technology by the time it gets to light its Olympics flame . . . or, should it throw away its opportunities, to flame out.

— Hesh Wiener October 2010

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