ICT Cluster
Location: Old Port neighborhood known as Old Recife.
Uniting high quality and endeavor, Pernambuco is home to the nationally and internationally recognized Information and Communication Technology Cluster. The sector represents 3.6% of state GDP, equivalent to US$1.2 billion at last estimate (2007), compared with the national average of 2%.
Thanks to an effort coordinated between University and State Government, Pernambuco boasts success stories in the area, with a direct and significant impact on the local economy. Examples include C.E.S.A.R (Center of Advanced Systems Study of Recife) and Digital Port (Porto Digital).
C.E.S.A.R. is a private innovation center which has created products, services and companies based in ICT (Information and Communication Technology) since 1996. Its activities include the entire process of innovation, going from conception to project execution for companies in industries and sectors such as, telecommunications, electronics, commercial automation, finance, media, energy, health and agriculture business.
Porto Digital is a technology park nestling in the historic and revitalized Old Port Neighborhood of Recife, in the capital’s center, which currently consists of 130 companies with around 4,400 employees.
The ICT cluster is mainly composed of small and medium companies, however multinationals such as IBM, Motorola, Samsung and Microsoft are also present.
The professionals and projects linked to C.E.S.A.R and the Digital Port whose origins are specially connected to the Federal University of Pernambucos’ (UFPE) Information Center (CIn), make Pernambuco one of the main research and development centers in Brazil. CIn is among the best five of its kind in Latin America.
The quality of human capital can be measured by other indicators: Pernambuco is home to 14 technical schools, many of which offer courses in IT (Information Technology), 29 university faculties offering courses in IT and over 60 courses in IT including Masters and PhD.
Facilities for investors
- Workforce with excellent qualifications;
- Total IT workforce cost in Recife is 12% lower than in São Paulo (source: Global Service Delivery Location Analysis. Everest Research, 2007).
- Availability of office rental space at an average cost of US$12.9 per square meter, cheaper than the US$27 charged in Curitiba (Paraná) or US$19.9 in São Paulo.
- Historic buildings are also available for refurbishment at low cost and quick delivery.
- Excellent options of plots for construction in the Digital Port region.
- Existing Real estate availability exceeds 40,000 m² and there is currently 20,000m² under construction.
- Infrastructure for the installation of ICT companies with an excellent structure of services and telecommunications. In 100 hectares there are 8 km of fiber optics installed and 26km of ducts, making the region one of the most modern in the country.
Specific incentives for the sector
National Incentives
- Innovation Law: incentives for innovation and scientific and technology research in productive environments.
- Good law: stimulates Research and Development (Rand D) in companies.
- Information Law: fiscal benefits for companies which invest at least 5% of profits in R and D.
- Income Tax: Reduction of up to 75% for software companies from the Northeast of Brazil.
State Incentives
Goods and Services Circulation Tax (ICMS)
- Reduction of the 17% rate to 1% for software;
- Reduction of the 27% rate to 11% for telemarketing and outsourcing companies.
Municipal Incentives
- Service Tax (ISS) – reduction in the 5% rate to 2% for IT and outsourcing companies.
- Urban Territory Building Tax (IPTU) – reduction or exemption of payment for up to 10 years.
Financing
- Offered by The Science and Technology Ministry (MCT), through Projects and Studies Financing (Finep) and the National Council for Scientific and Technological Development (CNPq).
- Offered by the Industry and Foreign Trade Development Ministry (MDIC), through the National Economic and Social Development Bank (BNDES), with lines of assistance of up to US$100 million per project; Technology Fund with an initial endowment of US$ 60 million; Program for the Software Development Industry, with financing from US$200 million, among others.
Main projects and companies
Recife is one of the three national headquarters of the Nokia Technology Institute (INdT), with a world development center of the Finnish company’s applications dedicated to the creation of applications in open code platforms, such as Linux and Java, making Brazil a reference point in Smartphone.
Application development
- Motorola and Samsung work in partnership with C.E.S.A.R in the development of cellular phone software.
- C.E.S.A.R is the only Java Platform World Center of Excellence in Latin America.
- Microsoft is present in the XML Research Center, resulting from a partnership between Digital Port, Fisepe, HP, Qualiti. C.E.S.A.R, and CIn, with the objective of developing technology for the XML platform.
- C.E.S.A.R and CIn are partners of Motorola in an initiative that makes Brazil the only world center of verification and integration of tests for the company’s cellular phones (Brazil Test Center). The Brazil Test Center obtained a total investment of US$ 20 million. In the project, which began in 2005, all cellular devices produced by Motorola are initially tested by the Brazilian team before becoming available on the global market.
- C.E.S.A.R participated in the Instinct project, together with the European Union, to develop Digital TV.
- IBM transferred its regional headquarters to the old port neighborhood in Recife.
World players
- Microsoft
- DELL
- Ernst&Young
- IBM
- Microsoft
- Motorola
- Nokia
- Oi
- Oracle
- Positivo
- Samsung
- SonyEricsson
- Sun
- Yahoo
Main areas of the companies’ activities
- Software Development (solutions and products) in administration, finances, healthcare, transport security and traffic management
- Games
- Neural networks/ AI
- E-business
- Wi-Fi Mobility
- Information security
- Infrastructure and connectivity
- Outsourcing
- Research and education
