IBM recruiter Laird says private training is often the best substitute 

By Clayton Browne

Rapid economic growth throughout Latin America has created a situation where the educational systems in the region simply cannot produce enough people with the required skills to meet expanding demand. At a time when Latin America continues to edge closer to making meaningful contributions to the global workplace, intense debates are taking place across the region about the shortcomings of university educations – from the rigor needed in science and technology education to mastery of foreign languages. To put it plainly, education costs money and nations have been too cheap to make it a priority.Sam Fouad, the Americas emerging markets leader at Ernst & Young LLP, elaborates on the problem at a recent Americas Society/Council of the Americas webinar. “(Latin American) countries have traditionally had weak and underfunded educational systems at all levels… education is generally expensive and inaccessible, especially at the higher levels, and reflects a protectionist and nationalistic mindset. So for these markets to now be needing very internationalized, high-skills talent is a tremendous challenge.”

Although obviously different industries have different needs in terms of employee skill sets, the crux of the problem is that Latin American universities are not producing enough graduates with the skill sets modern employers are looking for. Deanna Laird, University Relationship Recruiter Leader at IBM, points out that the talent shortage in data analytics, optimization, social media and cloud computing is particularly severe in many areas of Latin America today, and that new, evolving skills like these are increasingly being taught through private sector training programs.

Status Quo Stumbling Blocks

Universities are conservative, bureaucratic institutions in all countries, but this is particularly true in Latin America. The crux of the problem is that academic institutions simply cannot keep up with the pace of change in technology or the evolving demands of 21^st century businesses. Fouad offers a blunt assessment. “Globally-consistent technical knowledge is not being delivered in most Latin American educational systems, which is why private businesses like IBM are forced to develop their own private training programs.”

Fouad also argues that lack of English-speaking talent is another major stumbling block in most parts of Latin America, and especially in Brazil. English has become the language of science and technology, and that fact has been recognized by educational systems in countries like China and India who have made great strides in teaching English over the last few years, but little progress has been made in Latin America and other parts of the world.

Peter DeShazo, executive director of LASPAU (an America-focused higher education institution associated with Harvard University) emphasizes that an inability to speak English is increasingly becoming a major barrier to social mobility in Latin America. “One of the challenges we face is trying to work with our partners to develop intensive English programs so that students can be brought up to the levels needed for graduate studies in the U.S.”

On the macro level, DeShazo suggests that Latin American educational institutions need to focus on training university professors on how to effectively teach high school teachers to get the process underway at the grass roots level.

“Globally-consistent technical knowledge is not being delivered in most Latin American educational systems, which is why private businesses like IBM are forced to develop their own private training programs”

A Mission to Strengthen Education

LASPAU is a nonprofit organization affiliated with Harvard University whose mission is to strengthen education in Latin America and the Caribbean. LASPAU was founded in 1964, and over the last 50 years, over 20,000 people have participated in LASPAU scholarship programs for Latin American students to U.S. and other international universities. The large majority of these individuals are employed as academics or business professionals in Latin America today.

Aside from their scholarship programs, LASPAU also supports a variety of programs focused on STEM education and teaching English. Most of these efforts are small-scale projects, often partnerships, typically focused on low-income or rural areas.

While there is general agreement that educational reform is required throughout Latin America, what that reform should look like and how to implement it are intensely controversial subjects. There is general agreement that there needs to be a greater emphasis on STEM education, but the idea of universal teaching of English is a political nonstarter in a number of countries.

Fouad also points out that Latin American governments are increasingly getting out of education and leaving it to the private sector, which is creating an opportunity for developing innovation and for productive private-public partnerships. Online learning programs are one area that have received a good bit of attention, and a number of programs have been initiated throughout the region. However, online learning is not a panacea, as studies are increasingly showing that students do not retain online learning as well as classroom learning on a long-term basis.

It is also important to keep in mind that educational systems are cultural constructs and not one-size-fits all, and that you can’t simply graft the U.S./European educational model onto Latin America. Some of the folks at MIT’s edX Universities program have argued that since the skill sets needed by businesses change so fast today, maybe we need just one or two-year college programs, and then you go back to school every few years for six months to a year at a time.

The number of broadband connections in Brazil rose to 25.5 million in 2012, with more carriers luring consumers with high-speed Internet services, according to a survey conducted by the IDC.

The research firm, whose study was sponsored by Cisco, stated that the figure was not inclusive of connections made over smartphones.  Given the report, Brazil has 35 mobile connections for every 100 fixed-line connections.

“Fixed-line data connections include two new definitions: Broadband 2.0, for speeds of 2.0 Mbps or over; and Broadband 1.0, for connections between 128 Kbps and 2 Mbps,” says Cisco, adding that connections of 2 Mbps and over are considered the minimum speed for enjoying what the Internet has to offer.

Interestingly, Cisco says, average speeds rose 148 Kbps between January and June 2012 to an average 4.88 Mbps.  The main reason behind this increase was changes in speeds introduced by service providers aiming to meet Internet user profiles, where streaming, collaboration and social media are increasing.

Compared with other Latin American countries involved in the survey, Brazilian average speeds are second only to Chile, with 6.22 Mbps during the survey period.

In Brazil, the report says, Broadband 2.0 fixed-line connections grew 11.5% between January and June 2012, almost three times as fast as Broadband 1.0, totaling 9.2 million connections, or penetration of 4.7% for each 100 inhabitants.  Broadband 2.0 represents 52.7% of fixed-line broadband connections in Brazil, 40% of which are 10 Mbps or more.

Cisco predicts that Brazil will have more than 39.2 million fixed (broadband 1.0 and 2.0) and mobile connections by the end of 2016.  Of these, mobile will represent 31.5% and fixed-line connections 69.3%. Two out of every three fixedline connections will be Broadband 2.0.

“Brazil should be targeting an increase in broadband speeds and quality, and everyone should be shouldering this responsibility: the government, operators and technology companies,” says Anderson André, director of Cisco Brazil.

Cisco says xDSl connections continue to dominate the Brazilian market, up 8.2% during the survey period to 11.5 million connections.  Together, xDSL and cable modem connections represent 95.5% of all fixed-line connections.

Given the survey, there are over 6.1 million mobile subscriptions, representing 3.1% of the population.  3G subscriptions rose 10.6% to over 6.1 million as of June 2012.

China’s offshore services industry earned $8.1 billion in revenue in the first three months 2013, reports China Daily quoting an unnamed government official as saying.

The Chinese paper also stated that the domestic outsourcing service providers had received $11.7 billion in contracts during the same period, an increase of 43.6 percent when compared to the same period last year.

The official who spoke to the paper is with the Commerce Ministry and was attending a forum held in Fuzhou, capital of Fujian province.

As of March, China’s service outsourcing industry has 4.46 million employees, and 67.7 percent of them are college graduates. The communist country generates 350,000 computer science graduates every year and these professionals get half the salary of their counterparts in India.

China has long been trying to outsmart India in the global outsourcing market. Many Latin American countries too have invested in China’s outsourcing sector. Brazilian IT companies such as Stefanini and Ci&T have delivery centers on the Chinese mainland.

According to reports in Chinese papers, the communist government is aiming to increase its outsourcing sector by 30% annually over the next three years.

Nearly $5 million goes to BPO in Choco region

By James Bargent

An unusual alliance that has brought together multinational business and international aid with the local public and private sectors is set to test the social impact of outsourcing with a bold new project in Colombia’s Afro-Colombian heartland.

Last week, Spanish-language outsourcing specialists Atento threw open the doors to a new 110-seat call center in the city of Quibdo, capital of the poverty-stricken department of Choco. The new call center will provide services for multi-national telecommunications giants Telefonica/Movistar.

The call center is the result of an agreement struck last year between the United States foreign aid agency USAID and the National Association of Colombian Businessmen (Andi) to develop new and innovative approaches to improve economic opportunities for one of Colombia’s most marginalized minorities – Afro-Colombians. “We wanted to do something unprecedented,” said Santiago Pinzon, the executive director of Andi’s BPO and IT Chamber.

The Afro-Colombian population not only endures high unemployment and poverty levels but also suffers disproportionately from the violence and displacement of Colombia’s internal armed conflict. As a result, the population has been the focus of USAID’s Afro-Colombian and Indigenous Program (ACIP), a 5-year scheme designed to address these issues, which began in 2011.

The program has focused on areas such as land rights, institution building, training and employment. Over $4.5 million of the budget has been directed toward Choco, and nearly $2 million of that is dedicated to strengthening access to economic opportunities.

Impact on Outsourcing

For Pinzon, whatever the underlying causes of the population’s problems, these economic opportunities are key to improving the situation. “It is something that is very close to impact sourcing – it is not social responsibility but it is competiveness instead,” he said.

The organizations settled on the BPO and ITO sectors as the best mechanism to drive the program and attracted their private sector partners with funding from USAID and promises of extensive public sector support – including a training program for candidates run by Colombia’s government run job creation and training body, SENA.

The program appealed to Atento as it allowed the company to deepen its strategic ties to Telefonica/Movistar while offering the opportunity to act on its stated social responsibility policies, according to the company’s Colombia Director Alberto Castaneda. “Inclusion and diversity are part of our policies and this was a good opportunity to make that policy reality,” he said.

Quibdo was selected as the site for the new call center as a city that epitomizes the issues that plague the Afro-Colombian population. The city has a population of approximately 100,000 people, around 90% of which are Afro-Colombian and over half of which came to the city in the last 20 years after being displaced by violence elsewhere in the region. Unemployment hovers around the 20% mark, while underemployment and poverty levels are much higher.

 Quibdo & Afro-Colombians

Development in Quibdo and the surrounding region has also been stymied by endemic political corruption. For 20 years, politics in the region was a closed shop, run by the Sanchez de Oca family, members of which have faced various investigations for corruption and ties to paramilitary groups. However, this changed in 2011 with the election of current Mayor Zuila Muna, a long-time campaigner for Afro-Colombian rights who has worked closely with the other organizations in bringing the new call center to Quibdo.

The issue of security is also an ongoing concern in the city, where both the guerrillas of the Revolutionary Armed Forces of Colombia as well as drug trafficking paramilitary groups maintain a presence. However, those involved in setting up the project have been working with the Ministry of Defense on security issues and it is not something that has worried Atento. “It is very safe,” said Castaneda.

Although Quibdo’s social issues have created numerous challenges for implementing the new call center project, they also represent an opportunity, according to Castaneda. “For us it has been very convenient to set up in populations with high unemployment,” he said. “It favors us because there is not the possibility of attrition [and] they are more committed to the work, and, on the other side, we benefit the community because we represent a source of employment.”

The number of people eager to join a professional workforce in the region also leaves some room for growth, Castaneda said, although the comparatively shallow pool of workers educated to a degree level and with professional experience imposes limitations on how far the operation could be scaled up. “We can’t do a thousand seats, but we would like to be able to expand,” he said.

For the moment, Santiago Pinzon is satisfied with the 110 seats in Quibdo and the prospect of more jobs in similar schemes around the country. Pinzon believes these schemes will help demonstrate in measurable ways how Colombia’s outsourcing boom can have an impact on social development in the country. “We are basically incorporating a new way to promote economic development in the city,” he said. “But what we also want to do is develop clear tangible results on the impact of outsourcing on Colombia.”

Klender of Deloitte: List of global corps setting up in LATAM grows.

Narayan Ammachchi

Latin America is quickly establishing itself as a preferred destination for global corporations seeking to set up shared service centers (SSC), with more and more players pursuing new locations in Brazil and the Andean states to perform back-office functions. “Proximity and cost structure are some of the factors favoring the region,” says Mark Klender, Principal, Deloitte Consulting, which has recently surveyed nearly a hundred global corporate executives to gauge shared services trends and preferences.

The number of shared services centers is declining in the U.S. and Canada, but rising in Latin America, particularly in South America, the survey found. When Deloitte conducted a similar survey in 2011, Latin America had come second after Asia, but this time round the region has turned out to be ‘the first destination of choice’ for setting up SSCs.

More than 11 percent of respondents said they prefer Brazil, while only 10 percent preferred India, which the consulting firm regards as ‘the mainstay’ of the sourcing industry. In the survey, a considerable number of executives expressed interest in Mexico and Argentina.

Another interesting piece of news is that nearly 50 percent of SSCs servicing Brazil today are based within Brazil, and the South American country’s major cities such as Sao Paulo, Rio and Itajaí are increasingly becoming the hotspots for shared services centers.

More striking still, many corporate companies are using their LatAm centers to process back-office functions for operations in Europe and Asia.

As an example, Brewer AmBev, which has a very large regional shared services in Sao Paulo, is serving not just operations in the region, but also the firm’s operations in Canada. Diageo’s SSC set up in conjunction with the Indian outsourcing company Genpact is also exploring ways to  serve the British liquor company’s operations in Europe.

Long list of Shared Services

Many global multinationals have already set up SSCs in the region. “The list is long and the names include HSBC, MacDonald, Pepsi, Walmart, Amway, Siemens, Roche, Nestle, Johnson and Johnson, Procter and Gamble,” said Klender.

What is playing to the advantage of Latin America is the region has many countries and a majority of their residents speak a single tongue. “Many firms are setting up one SSC for every four or five countries. In other words, they set up one SSC in South America and another in Central America,” said Charles Arid, global practice leader, shared services, at PricewaterhouseCoopers (PwC).

According to Deloitte, labor cost and availability of workforce has continued to be the decisive factor defining where you will locate your shared services center. Availability of physical space, technology infrastructure and skills in languages are the ​​other factors of importance.

Interestingly, analysts say, most of the SSCs are serving as pan American centers but a vast majority of them are concentrated in four major countries – Brazil, Chile, Mexico and Argentina. That is because global multinationals in Latin America have 75 percent of their operation in generally two or three countries.

Klender says the number of SSCs will increase in the days ahead as the region consumes more goods and services. The consumer goods company Unilever, which sold its finance shared services to Capgemini, has joined hands with IBM to handle HR functions for its workers in Brazil, Mexico and Chile.

“Organizations are increasingly leveraging shared services and outsourcing initiatives to reduce costs, increase efficiency, achieve greater agility and improve compliance,” Arid said.

Where Are the LatAm Vendors?

Though SSCs are growing in number across Latin America, it is hard to find a regional vendor servicing a global client. Many SSCs set up by homegrown companies appear to be run by their own subsidiaries.

Analysts say a lack of knowledge about the benefits of setting up specialized centers for discreet business functions is holding back many small and medium businesses from leveraging shared service centers. Many don’t trust the argument that SSCs help cut cost and are also unwilling to conduct a feasibility study.

Corporate firms, on the other hand, are appearing more willing to outsourcing their back-office functions than set up captives or SSCs with third party vendors.  A past survey from HfS Research showed 70% of companies preferring to outsource and 52% increasing investments in shared services.

Klender says the biggest challenge for corporate companies is selecting the right country to set up the shared service center. “If you pick the wrong country you may not be able to save as much cost as you had expected,” he said.

“Shared services market is maturing in the region. LatAm companies don’t need to have their back-office functions processed in countries like India,” Klender added.

Start-up accelerator Wayra and MercadoLibre have joined forces to fund and train early-stage technology entrepreneurs in Argentina. The e-commerce portal MercadoLibre said it would ‘co-invest in certain ventures’ selected by Wayra, a start-up accelerator from Spanish telecom giant Telefonica.

The agreement comes weeks after Wayra issued a call for young entrepreneurs to send in their applications for venture capital by May 26.  The e-commerce portal is likely to invest in companies capable of creating new applications and services to its community of buyers and sellers. MercadoLibre recently announced the launch of an investment fund of $ 10 million that will be entirely focused on new ventures that use their platforms.

According to analysts, MercadoLibre’s aim is to strengthen the e-commerce ecosystem in the region it operates. MercadoLibre is “an ideal partner for acceleration and internationalization of our companies,” said Andrew Sabol, Country Manager of Argentina Wayra.

By Jon Tonti

Some small to medium sized software providers in Latin America seek specialization in business verticals and languages while others do not.  Experience can create value, but is method or know-how the principle ingredient.  NSAM talked to four Nearshore software development experts to understand how providers find their niches and how important those niches really are.

Often is the case a company moves in a particular direction because of the talent it hires.  Arin Sime, CEO of Agility Feat explains that after initially setting out to provide outsourced development services without a particular focus, his company began hiring people with exceptional ability in design, user experience, and frontend web development. “You find awesome people and you build the business around their exemplary skills,” said Sime.

The expertise of Agility Feat’s Costa Rican nearshore team enabled Sime and his colleagues to focus the business towards startups or small and medium companies (that behave like startups) that need design, process flow architecture, and implementation in an end-to-end lifecycle.  The US leadership team of Agility Feat already had good experience in startups and offshoot technology projects for small and medium sized companies; hence the melding of the skill sets from both sides of the organization produced a unique company with more focused services.

Ruby, Rails, Python, Mobile…..             

Others outfits like Tekton Labs specifically chose their technologies based on gaps in the marketplace.  “We chose Ruby on Rails, Python, Mobile and other open source technologies because they are something new in Latin America and especially in Peru,” said Kenneth Lopez, a consultant at Tekton.  “Most of the other companies here in Peru were only dealing with Java and .NET so the differentiation helped us grow.”  Lopez added that the company then employed SCRUM methodology (a derivative of Agile, which is already the standard in LATAM according to some experts and thus a non-differentiator).  The business verticals in which Tekton works developed more organically through referrals from other clients.  “We ended up working in retail, health, digital marketing, and human resources by chance,” explained Lopez.

In contrast to the organic movement into business verticals at the behest of current and potential clients, Tekton also draws upon its accumulated knowledge base in areas such as digital marketing in conjunction with Rails development for Facebook apps to push new ideas to potential clients.

Personal experience plays no small part either.  Mauricio Duran, president of Definity First was invited to intern at Microsoft at the at age 21 straight out of Mexico, where his company has operations now.  He was quickly impressed by the powerful tools and technologies offered by Microsoft.  “I was a UNIX guy, but ever since that year in 1997 I feel Microsoft tools and technologies are the right thing to use because of their reliability, scalability, and support,” said Duran.  “Despite, Microsoft being a giant company they have limitations too, I saw where I could build the stuff [on top of the Microsoft techs] that they didn’t have the time to build.”

Some firms that have grown organically in certain directions based on client and overall market need have run into skill shortages when going far into a specialized technology, which is not a problem specific to Latin America, says Barnaby Sheridan, Senior Partner at Velocity Partners, which has operations in Argentina, Uruguay, and now Colombia.  “We have stuck to base technologies like .NET and open source, and have stayed away from particular industries, we can do work for any client that has a software intensive model,” he said.  In terms of organic growth spurned by client demand Sheridan mentioned that “Ruby is huge and we have also seen a big call for more test automation.”

Although Agile methodology is not considered a differentiating factor anymore and instead the standard for nearshore software providers, there are many companies that run halfhearted Agile systems and don’t live and breathe it.

Maturation = Specialization, not Necessarily

It might seem intuitive that as software providers mature they naturally go in the direction of specialization in particular business verticals or technologies.  We have it drilled into us in business school the need to differentiate and specialize.  However, with software development firms, that is not necessarily true.  “If the metrics that you are using for success of the company are number of employees, countries you are in, or locations you have it might be more advantageous to reach larger-broader markets and not specialize too much,” commented Sime.

Some think specialization must yield better results, but is that true?  “Specialized providers have the sales advantage because the buyer thinks they get more for their money, I don’t want to harp on process, but if you are a good development shop and know what you are doing, it shouldn’t really matter,” commented Sheridan.

Lopez also does not believe buyers will automatically get more value from providers that specialize in certain business verticals.  “I think it is more about the company and the culture that will deliver value.  When we started with health companies in Peru, we didn’t know anything about health, insurance, or medical services, but they saw the value we could provide with our technology and methodology.  They provided the industry knowledge, we became experts, and it worked very well,” he stated.

Although Agile methodology is not considered a differentiating factor anymore and instead the standard for nearshore software providers, there are many companies that run halfhearted Agile systems and don’t really live and breathe it.  Sheridan commented that if a company is not going to specialize in a platform or business vertical, specializing in a methodology is another way to differentiate.  Of course, the provider must be wholly faithful to the methodology for it to be a true differentiator.

However, there are contrasting viewpoints to the method triumphs specialization assertion.  Sime explained that because of his US team’s wide ranging experience in multiple platforms the company originally set out to offer development services in any language by hiring on a client by client basis if need be. “Ultimately it is not a great business strategy, you are trying to be everything to everybody. Now we specialize in Ruby on Rails development and Python,” indicated Sime.

Duran also thinks that there is value in using providers that have extensive knowledge in a particular domain as those developers building the product have seen it all with respect to the behavior of said technology.

Specialized Shops Turning Away Business or Reselling it?

Some development shops that have decidedly gone towards particular technologies reject projects that are based in other technologies where their expertise is lacking.  To the contrary, other shops will take the contract and farm it out to another firm with the necessary expertise.  That begs the question, how much of this goes on?  “I think a fair amount,” stated Sime.  He mentioned that Agility Feat has considered doing it with projects close to their domain of expertise, but has stopped short because it would distract from the company’s core mission.  Sime informed that if his company were to take part in such activities his company’s name would still be on the final product so Agility Feat would have to ensure the quality of all aspects of the development process and final product.

“Yes, that happens a lot, a lot, a lot.  Especially in countries like Peru or other countries where the companies don’t have a lot of experience with new techs like mobile or Ruby on Rails they end up selling the contract over and over again until it is acquired by some company that is actually good at it,” remarked Lopez.

When asked about the pitfalls of reselling contracts and extending the chain of responsibility for an end product Lopez explained that transparency is the only way to ensure success.  “The companies that approach us and say they have a contract that belongs to company X in New York, which was then passed to a company Y in Mexico, and now company Z in Peru or whatever, are really open with the client because the development team has to talk directly to the client.  In that situation it will work, when you try to hide it and there are intermediaries in the communication channel that is where I will not go and don’t recommend anyone to go. With full transparency and direct access to the client there should be no problem.”

By Michael Puscar

Medellin – blessed with a beautiful natural landscape, friendly people and expansive parks – has seen incredible growth over the past two years. This city in Colombia is today one of the most innovative cities in the world. With abundant human talent and conducive business climate, Medellin is fast becoming a perfect destination for enterprises seeking to establish high-tech operations. The city has, over the years, transformed from the center of Latin American drug trade to a growing high-tech hub.

My firm, Yuxi Pacific Group, set up a satellite office in Medellin in early 2011. Over the past two years, we have recruited more than 80 employees and more than doubled our revenue.

Despite recent success, Medellin does have some problems. The country’s growing economy has benefitted the educated middle-class community, but people residing in hillside neighborhoods (called comunas) have remained poor. Many residents in impoverished neighborhoods are caught in the crossfire of crime syndicates –– Urabeños and Oficina de Envigado –– trying to take control of the city.

In San Javier (also known as Comuna 13), a densely populated neighborhood, armed groups have made life miserable for thousands of residents.

Some of these neighborhoods are known as “invasion barrios” and are volatile. Many hillside neighborhoods are not officially recognized by the Municipality of Medellin and therefore receive little or no official government assistance. Though the city has grown in stature on the international stage, many residents here are still struggling to avoid street violence and provide a quality education to their children.

There is little doubt that only education can defeat this cycle of poverty and hopelessness. Enterprises thrive in countries where children are given good education. That is what motivating the creation of Yuxi Pacific Charitable Trust.

Recent initiatives of the Trust have become popular among local residents. Yuxi Pacific Charitable Trust operates independently and intervenes directly to help poor communities with projects focused on youth education.

Arming Schools with Computers

Each year, we visit impoverished neighborhoods and identify a school that is deprived of basic needs to provide good education. This year our work will focus on Institución Educativa Cedepro, located in an invasion barrio in the City’s 13 de Noviembre neighborhood.

Philanthropy is not about writing a check or buying equipment but a constant, ongoing and multi-faceted commitment to uplift a community. We equip schools with computers and our employees volunteer to work for the welfare of student community.

Our efforts start well before classes resume. Our staff walks into the school and helps to select the best space for computer lab. We help schools get internet connectivity and provide training to teachers who later supervise computer labs.

People express their gratitude with a smile. For me, this effort is personal. I was raised in a working-class family and, when I was 11-years-old, my parents pooled together their savings to get me a computer (a Commodore 64). That computer changed my life. If the computers and education that we provide can make difference I think it is worth the effort.

The author is the Chief Executive Officer of Yuxi Pacific Group.

The Brazilian Ministry of Science & Technology is offering funding to overseas technology companies interested in developing innovative software and IT services inside Brazil – a move reminiscent of CORFO’s (Chile) creation of StartUp Chile launch several years ago.

The government has allocated 25 slots for foreign tech start-ups in its “Start-Up Brasil” accelerator program designed to foster innovation in Brazil’s software and information technology services industry.

“Shortlisted enterprises will be eligible for up to US$ 596,000 in funds,” said the Ministry in a statement.

‘Start-Up Brasil’ has a budget of US$ 19.8 million and aims to support 75 domestic companies besides their foreign counterparts.

“We want to encourage entrepreneurs in the area of information technology. This area is strategically important for us to develop new business for Brazil,” said Brazil’s Minister of Science, Technology and Innovation, Marco Antonio Raupp.

Participating companies are required to have been operational since the past three years and to develop innovative products or services that use software and IT services.

Foreigners whose projects are approved will be given temporary visas to Brazil.

In addition to the Brazilian federal government, the start-ups will also receive funding from  accelerator companies.

“Private funds can range from US$ 9,897 to US$ 494,854 per company selected, depending on the accelerator associated with the project and its stage of development,” the statement said.

The accelerator companies include Acelera Brasil (Microsoft Participações), Wayra, 21212, Aceleratech, Papaya, Acelera MG (Fumsoft), Outsource Brasil, Start You Up, and Pipa.

The deadline for start-ups’ entries is May 31 and the shortlist will be announced in July.

The entrepreneurs will be physically located within the accelerator’s infrastructure, and benefits will include physical workspace, legal advising, coaching and mentoring.