The So-Called Tech-Talent Shortage in Brazil
When I saw on Twitter a link to an article entitled “Tech-Talent Shortage Crimps Brazil” I was immediately interested. Just as quickly, though, I noticed that it was a WSJ article. Paywall. Too bad. Later that day I reconsidered and Googled the article to get access (you knew about that trick, right?). Since I live and work in Brazil — in technology, no less — I thought maybe I should share my perspective on this matter.
Brazil is one of the world’s biggest Internet markets, ranking fifth in terms of Internet users and third for overall time spent online. It is also home to scores of companies devoted to social media, digital advertising, e-commerce and other online businesses.
So far, so good. It’s true that Brazilians are big users of the Internet, especially on smartphones. There’s an enormous amount of potential here.
In Brazil, 63% of all employers had difficulty filling jobs, compared with a global average of 36%, according to a 2014 survey by ManpowerGroup Inc. a human-resources firm. Technology companies in need of specialized engineering talent were among those feeling the biggest squeeze.
Here’s where the trouble begins. Companies say they need tech talent here in Brazil, but the truth is that they either don’t want to pay for it or can’t afford it. The reasons are cultural and political. Brazil has a strongly centralized federal government, so much so that the states are considered “federative units” and dependent on the central government. The tax system is actually called a “tribute system” (feudalism, anyone?) with the municipalities and states passing a large chunk of money to the federal government in Brasília (not Rio de Janeiro kids!). Between the immense bureaucracy and ridiculously high taxes, it can cost a business anywhere from 150% to 300% the salary of a single worker to hire and maintain said individual. Aside from that, with legally-guaranteed benefits like 30 days of vacation per year and multiple work-stopping holidays, it’s a challenge to get anything done with the employees on staff.
The nation’s poor education system is a major culprit, executives say. Only 12% of Brazilians between the ages of 25 and 34 have gotten college or higher degrees, according to the latest data from the Organization for Economic Cooperation and Development. In comparison, more than 40% of Americans and 65% of South Koreans in the same age range have graduated from college.
This is changing. Between investments in public universities and incentives for their private counterparts, along with reforms to the college entrance process, more and more young Brazilians are going to university. What isn’t changing is the abysmally low quality of public k-12 schools. My son attends a municipally-funded public school, and my daughter’s high school is state-sponsored. In both there are lazy teachers, overworked teachers, abusive teachers and (and staff), as well as a lack of infrastructure that would be considered essential in the developed world. Further educational reform is necessary, including such that promotes computer skills. Then again, most schools in the United States lack appropriate and worthwhile courses in coding that will prepare young people for the new information economy.
In addition, Brazil’s fledgling startup scene has thus far produced few of the big paydays that have lured techies to places like Silicon Valley. Many computer-science graduates in Brazil would prefer a guaranteed salary of between $80,000 and $90,000 a year in the oil industry than a more modest salary and stock options in the hope that a startup will be bought or go public, according to technology entrepreneur Marco Demello.
How can a “big payday” even happen in such an adverse business environment?
Brazil’s tech-talent shortage extends beyond startups to companies like Google Inc. The Internet giant has 100 engineers in its research and development center in Belo Horizonte. The company would like to double that number, but it is doing so slowly because there isn’t enough top-flight Brazilian talent available, said Berthier Ribeiro-Neto, who heads the research center.
Well, I’m a project manager living in Uberlândia, but if Google would like, I’d be glad to relocate to Belo Horizonte. Call me?
But others are looking for alternatives. São Paulo startup Betalabs is considering outsourcing some engineering tasks to India, said Luan Gabellini, co-founder of the company, which produces accounting, warehouse-management and other business software. Still, it is a step he would prefer not to take. “Our product is very Brazilian,” he said. “We prefer everyone to be in one place, to share the same culture.”
My experience with outsourcing to India is pretty extensive, and it’s been mixed. It all depends on what company you hire for the outsourcing. Still, it’s far from ideal. Brazil and India have very different work cultures, and there is the language barrier. When I taught English to professionals here in Brazil they often complained about how impossible it was to communicate with people in India. The accent was an added layer of difficulty over the direct problem of language difference. This was also my experience coordinating from New York with a team in Mumbai. Often we heard our Indian colleagues talking but couldn’t understand a word, leading me to thank them for the update and ask for an email summary. For our “review.”
Brazil has an enormous amount of potential. There are unique problems here to solve that can inspire new technologies, from mobile apps to ecommerce solutions. Just the other day I gave (for free!) two ideas to a young developer. These have been rattling around in my brain for several months now, and I know I’ll never get around to acting on them. Someone should. What Brazil needs is massive and deep reform, such that facilitates starting (and winding down) a business as well as extensive tax cuts to encourage new business. Will this happen? Under the current administration of President Dilma Rousseff I seriously doubt it. Then again, I don’t think any elected official will likely have the political sway, in alliances and personal charisma, to accomplish the needed reform. So we’ll see if startup culture can bloom here anyway, like flowers through the cracks of a sidewalk.
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Originally published at www.adamgonnerman.com on January 5, 2015.
