Brazil’s infrastructure has contributed to healthy growth and job creation providing high value employment to an emerging generation. Now, as Nearshore Americas points out, the strength of Brazil’s economy, and its currency, the real, is causing concern among BPO and nearshoring interests whose free market predilections put low wage competitive advantage at cross purposes with Brazil’s strong government institutions and the national project to provide everyone with a digital footprint.

At a recent conference in Sao Paulo, the distinguished Gartner analyst and vice president Linda Cohen commented that when it comes to outsourcing the market is changing and becoming integrated so rapidly that companies really don’t need to know the specifics of where it comes from as long as it meets their needs.

Perhaps this is one reason why Nearshore Americas spotlights Daniel Ortega’s Nicaragua as a low cost location for nearshoring and BPO. If Ortega’s rival Herty Lewites had lived to be president, there would be more credibility to this claim. But Herty checked out a while back and Nicaragua’s only Disneyland-style amusement park, Hertylandia, is his legacy.

Nations trying to molt away from their pathology of underdevelopment offer opportunities. But leveraging Nicaragua, with its CIA Factbook per capita annual income of around $500 against Brazil,’s, which is around $10,000, in the hope of ratcheting down contract numbers with Brazilian nearshore and BPO providers isn’t exactly mastering the possibilities that can help grow good, stable business relationships, especially in Central and South American cultures. Image credit, perspectivapolitica.com.br

Reflecting on the Brasscom and Gartner IT and BPO events that unfolded just a month ago in Sao Paulo, like the SAP event that shadowed them in the same hotel… these were highly successful endeavors from the perspectives of the principals and event planners thanks to extensive online trade press coverage, live tweeting and video.

When one hires a high powered PR agency like Burson-Masteller and spends the dollar equivalent of 30 seconds of 2010 Super Bowl advertising on a global public relations effort to position Brazil as a major player in an otherwise faceless IT world it’s bound to be noticed.

The government of Brazil is investing around $25 billion dollars to develop universities, technical schools, secondary education programs and public-private partnerships to prepare future generations for jobs in the emerging digital economy. But with a presidential vote in less than 90 days there is a growing debate over who will get to direct and spend that money and to what end. Government and near government in Brazil want to add value to people and help roll back the pathology of underdevelopment that has created two Brazils. Some globalist business interests prefer the human capital approach that downplays nations and work force when building infrastructure for the emerging digital economy.

Right now, as Tom Foremski has commeted, Rio and other locations in Brazil are great places to do nearshoring, BPO. The number one concern I heard at the big conferences in Sao Paulo and Rio were those of jetlag from executives who travel from the US to South America and India in order to do hands on management, keep quality where they want it and deepen relationships. Imagine going from Miami to Rio in less than 5 hours. From Madrid to Sao Paulo in less than 5 hours. What’s really needed here is to bring back supersonic jet transportation. (photo credit UPI, at back left of image in grey suit can be seen Henry Kissinger)

According to Gartner vice president Linda Cohen, who spoke at a major IT conference in Brazil recently, the outsourcing revolution began 21 years ago in Rochester, New York, when, seeking to cut costs, Kodak did the first known deal to send IT jobs out of the United States. Ironically an article in a Rochester business sheet (linked below) shows that the karma is coming back around.

With former HP leader Carly Fiorina now a Republican candidate for the US Senate in California, saying she supports outsourcing of American jobs to China and elsewhere, it was bound to happen. Senator Charles Schumer (D-New York) is developing legislation that will put an excise tax of $0.25 cents per call on each call that gets transferred to a call center outside the United States. The company who transfers the call will get hit with the tax. Many US and other global companies work with call centers in Brazil and Latin America. Capgemeni just opened a big center in Guatemala City.

A longtime observer of the global outsourcing scene, Gartner Latin America Vice President for research, Cassio Dreyfus noted in his opening remarks today at the Brasscom – Gartner global infrastructure conference in Sao Paulo that it’s been 21 years since Kodak made history with the world’s first outsourcing deals.

The cost cutting brought results at the beginning but according to Gartner vice president and chief of research Linda Cohen, not much has changed since. Two thirds of those companies polled recently are not satisfied with their outsourcing solution and a new business model is needed, now, Cohen says.

A big part of the concern over where outsourcing is headed are the younger generations who are using the “I accept” idea of getting their work done, often with generic and free solutions. Dreyfus and Cohen both suggest that the “I accept” (click on the button) attitude among those who prefer PDAs to loaded PCs and laptops provided by their employers, is at cross purposes with branded software and business process solultions that imbed the notion of adding value in the minds of users.

Brazil is investing the equivalent of $26 billion in new infrastructure, education and attracting new IT business. GE and IBM have just made major investments in high tech parks in Brazil, like ones you see in Research Triangle, North Carolina and around Peekskill, New York.

One of the challenges facing the IT industry globally is providing messages that simple down the nature of the business so that plain folks wherever they are, can understand the nature of the business, particularly since it creates jobs. The best piece of collateral I’ve seen so far at this event is a light cartoon, using stick figure images that delivers a succinct but simple message. It comes from the global firm HCL. If you are interested in the future of the new normal, you might want to click here.