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Brazil Information Technology Sector & International Trade

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1. Use the theories of international trade and investment to help explain Brazil's international information technology sector?

2. What recommendations would you give to the Brazilian government and its outsourcing industry in order to improve their prospects for success in building a strong international competitive position in the information technology outsourcing business?

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1. Use the theories of international trade and investment to help explain Brazil's international information technology sector?

Comparative advantage is one way to explain Brazil's growing international information technology sector. As a result of Brazil's size and powerful economy, Brazil has developed a sophisticated telecommunications and network structure that has been rated higher than other countries like China and India, where international trade is traditionally outsourced. In addition, Brazil has an automated and highly sophisticated banking sector and offers a large base of affordable real estate to establish corporate operations. Also, the wages in Brazil are 40 percent less than in the United States, and the country has lower employee turnover and total operating costs. This is an example of a National Comparative Advantage and shows, as Adam Smith pointed out, that some nations (Brazil in this case) can produce more with less labor than can other nations. Heckscher and Ohlin theory of factor endowment is shown ...

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This solution explains Brazil's international information technology sector based on the theories of international trade and investment. It also makes recommendations for the Brazilian government and its' outsourcing industry in order to improve their prospects for success in building a strong international competitive position in the information technology outsourcing business.

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