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Brazil Computer Industry Policy
The Computer Industry Policy
The "informatics" policy started in the late 1960s and
early 1970s as an effort to develop a Brazilian personal computer
(with the USP's Engineering School working on hardware and the PUC-RJ
on software, and with support from the navy and the Finep). Technology
was to be transferred to a state-owned corporation, Brazilian Computers
and Systems (Computadores e Sistemas Brasileiros--Cobra), and to
private firms owned by Brazilians. With the development of personal
computers, a policy was devised that restricted this new market
to Brazilian firms but allowed for the continuous presence of multinational
corporations, particularly in the area of mainframe computers. Congress
approved the policy in 1985. The central tenet of the legislation
was the strict ban, for seven years, on the import of microcomputers
and on the establishment of foreign firms producing microcomputers
and software. The Computer Technology Center (Fundação
Centro Tecnológico para Informática--CTI) was established
in 1983 to encourage the development of scientific and technological
research in the computer sector. A national office for the computer
industry, the Special Secretariat for Informatics (Secretaria Especial
de Informática--SEI), was established in Brasília.
It had the power to control the import of equipment and components,
to set targets for increasing Brazilian participation in joint ventures
with foreign firms working in Brazil, and to decide about government purchases
of computer equipment.
The policy was conceived not only to limit the small computer market
to national firms but also to stimulate the local production of
products and components, which was part of a broader policy of import
substitution. Both Brazilian and multinational firms were required
to increase the share of domestic content in their products. This
requirement boosted the development of local competence but also
led to higher costs and a loss of competitiveness, given the lack
of scale in the local market. This strategy of mandatory high percentages
of local components in all items, including disk drives and printers,
contrasts with that of South Korea, for example, which concentrated
on a few components, such as monitors, where the local industry
could compete internationally in terms of quality and price.
To protect the local industry, the government introduced mechanisms
to prohibit the transfer of technologies that were similar to ones
being developed or that already had been developed by Brazilian
companies. This policy was applied to both hardware and software,
and Brazilian firms developed emulators of MS-DOS and Unix computer
operating systems for the local industry. As a result, companies
that could bypass this legislation and get the original software
were in a better position than those that remained attached to much
less advanced local products.
This protectionist policy was very controversial and drew strong
opposition from the United States government and multinational firms,
in the name of free trade. It also drew opposition from Brazilian
firms and corporations that thought their access to high technology
had been curtailed. Supporters argued that the policy generated
technological competence in Brazilian firms and created employment
for researchers and engineers at little cost to industry or Brazil.
Detractors argued that the whole industrial sector suffered from
restrictions on access to state-of-the-art electronics and, more
generally, that Brazil was delayed in entering the microcomputer
culture. In practice, the civilian government under Sarney did not
invest in research and development for the computer industry, and
a large part of that industry remained limited to the assemblage
of microcomputers with imported components. A few firms have specialized
in some market niches (such as bank automation) and, after 1992,
entered into associations with multinational corporations for the
development and distribution of international microcomputer brands
in Brazil.
Data as of April 1997
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