Brazil’s burgeoning middle class and keen interest in Massachusetts-based knowledge industries make the country a key export market for Bay State companies - but only if those companies take a patient approach, develop relationships and find local partners, executives and trade experts told an AIM briefing Thursday.
More than 150 employers packed a Doing Business in Brazil seminar at Microsoft in Cambridge to hear Governor Deval Patrick and representatives from companies such as State Street and EMC outline the lessons and business opportunities that came out of the Massachusetts trade mission to Brazil in December.
That mission brought 50 business leaders and state officials to Brasilia, Sao Paulo and Rio de Janiero to meet with with industry executives and federal and state government leaders. Brazil is the world’s sixth largest economy.
“We will benefit from this and if we don’t look outside our borders, we will be left behind – it’s all about competing, and connecting with differences in people and cultures,” Governor Patrick said.
He told the group that Brazil has the fastest-growing middle class “on the planet” and that newly affluent Brazilians have an affinity for the high-end services, technology products and educational opportunities that drive the Massachusetts economy.
Susan Luo, Vice President of Global Strategy at State Street, said that Massachusetts companies looking to break into the Brazilian market must manage expectations. Employers need to balance excitement with realism, she said, and convey to customers and partners alike that the company is committed to a long-term strategic investment in Brazil.
EMC Corporation of Hopkinton has maintained sales and service operations in Brazil for 10 years and is now developing software to help locate the best place to drill for what experts believe are enormous oil reserves off the coast of Rio de Janiero. Joel Schwartz, Senior Vice President and General Manager of Global New Business Development at EMC, said the company began assembling products in Brazil in 2007 through a partner.
“You must go there more than once, get a feel for the place and start building a network of contacts,” he told the group.
Schwartz said tariffs on equipment remain the major challenge to doing business in Brazil.
Brazil and Massachusetts have strong existing ties. The Bay State has the largest number of Brazilians living outside their native country. Brazil has needs in industries that synchronize well with the strengths of Massachusetts—technology, energy, education, financial services/asset management, life sciences, and others.
Infrastructure is another great need, with the soccer World Cup coming to Brazil in 2014, and the Olympics in 2016.