“Start-up Brasil”: Brazilian government’s initiative to foster technological entrepreneurism
by Leonardo Tamura, Berners Consulting São Paulo
“TI Maior”, or Greater IT, is a strategic program created by the Ministry of Science, Technology and Innovation (MCTI), part of the National Strategy for Science, Technology and Innovation, that aims to strengthen the Brazilian software industry.
In 2011, revenues in the IT sector (telecom not included) grew 11.3% compared to 2010 and surpassed USD 100 billion, which represents 4.4% of the Brazilian GDP. By 2020, the global IT market is expected to surpass USD 3 trillion, and Brazil wants to position itself as a competitive player. The government’s expectations are for the local IT industry to reach USD 200 billion, representing 6% of the national GDP, with USD 20 billion in exports.
Currently, the market is divided into 8,520 companies that develop, produce, and distribute software and provide services with micro and small companies representing 94% of the companies that develop and produce software. Typically characterized by low investment and a high potential for driving economic and social development, the IT industry pushes innovation through the creation of disruptive technologies and business models leading to new services, products and markets. This segment is considered by the Brazilian government as an important element of the global economy and a possible relief to the financial crisis.
One of the most recent initiatives of the Greater IT program is called “Start-Up Brasil”. The program is focused on software and services for IT start-ups and is offering: access to mentors and investors; research financing, development, and innovation; market and technological consulting; infrastructure; partnerships with universities, research institutes, and incubators; contacts to national and international companies; and access to national and international markets.
The “Start-up Brasil” program will prepare selected technology-based companies and connect them to global tendencies and markets. It is also intended to establish private-public partnerships to generate an ecosystem to foster technology-based entrepreneurship.
The program is divided into 3 phases that will (1) select start-ups accelerators, (2) select start-ups from Brazil or abroad, and (3) insert the start-ups in the accelerators’ infrastructure to drive them through a complete innovation process (R&D + Management + Market + Funding) for 6 to 12 months.
The first phase has been concluded as the Ministry of Science, Technology and Innovation (MCTI) announced the selected accelerators: Aceleratech, Microsoft, Papaya, Pipa, Wayra (Telefónica Group), 21212, Fumsoft, Outsource, and Start You Up.
The next phase, expected to be finished by the end of July, will select 40 to 60 start-ups. Up to 25% will be international start-ups, and each one will receive an investment of BRL 200,000 (close to USD 100.000). Until 2016, the overall goal is to accelerate 150 start-ups. The MCTI’s investments are expected to reach up to BRL 40 million. The nine accelerators will invest BRL 36 million in total in exchange to a minority stake in each company.
Sources: MCTI, Valor
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