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By Ben Tavener, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – A report by the Economist Intelligence Unit says that Brazil is among the worst at coping with the language barrier of the English-speaking world of business, and that deals are being hindered because of it. Experts are warning that, with increased international interest in businesses based in Brazil, the need to break down the barrier has never been more acute.
The report says that 74 percent of the Brazilians surveyed admitted their company has suffered “financial losses as a result of failed cross-border transactions” – much higher than the global average of around fifty percent.
The Brazilians who took part in the study seemed to recognize the issue – described in the report as a “significant hindrance to effective cross-border relations” for companies – as 77 percent of them believe better communications could improve productivity, while in the UK, for example, the figure is only 43 percent.
Although expanding internationally is always fraught with complications, the prospect was seen as most difficult by Brazilian companies – nearly eighty percent of Brazilians surveyed said cross-border difficulties hampered their expansion plans.
With the boundaries between old and new economies become increasingly interdependent, experts are warning that good communication skills have never been more critical. English is the recognized international language of the business world, and as such Monica Szwarc - cross-cultural coach and Country Manager for Bridge Brazil - stresses the importance.
“Internationalization is becoming each day more relevant to Brazilian companies in general as they start to move beyond the local market to grow further aiming at sustaining long term competitiveness and becoming major players in the global economy,” she says.
However Ms. Szwarc says that schools are taking the situation seriously, and are aware of the needs of the market in terms of the level of language control a student needs to exhibit – and to this end Bridge Brazil will be opening specialized, business-focused, and even oil-industry-focused courses from this August.
Ultimately, she concludes, the situation is definitely improving: “Young Brazilians are more familiar with English in general and very keen to invest in international education. Governmental programs have shown increased awareness of the need for English Proficiency and we now have kids that are able to face the challenge and compete at the best universities around the world.”
The language barrier can also be seen as an opportunity for those with an entrepreneurial initiative though, to capitalize on doing business where others dare not tread. As a positive example of work with Brazil, the report highlights the experience of Swedish truck manufacturer Scania, which now delivers more vehicles to Brazil than any other country.
Scania believes technology has played a huge role in improving the performance of cross-border teams, but that cultural barriers – particularly between Sweden and Brazil, whose work cultures the company describes as “pole apart” – are “always present and need to be constantly managed”, particularly at the outset.
Industry experts say that despite the possible setbacks caused by inefficient language communications, a multinational approach can yield the biggest gains, as long as initial cultural misunderstandings can be overcome.
The IBP Rio Oil & Gas Conference Arrives
RIO DE JANEIRO, BRAZIL – The Rio Oil & Gas Expo and Conference, perhaps the most important event of its kind in South America, is set to run next week (September 17th-20th) in the Riocentro Convention Centre in Barra de Tijuca. Organizers of the biennial event are expecting a record turnout of 55,000 visitors from over fifty countries at the expo this year, with 1,300 exhibitors.
This year marks the 16th edition of the industry gathering. “The event has grown and strengthened in parallel with the changes in the Brazilian and global oil and gas industry,” according to event organizers the IBP (the Brazilian Oil, Gas and Biofuels Institute). “In the 1980s the event occupied two pavilions in Riocentro, now we occupy all five.”
Running in parallel to the expo, a four-day conference is expected to attract roughly 4,300 people, with keynote speakers including the CEOs of Shell and Repsol, as well as the presidents of the World Petroleum Council and the International Gas Union, among others.
Plenary session topics include the role of the petroleum industry in promoting sustainable economic development, challenges to energy supply in the 21st Century and offshore operational safety. “We have managed to broaden and deepen the discussion of topics … trying to always include foreign speakers,” said the organizers.
A number of new themes will be addressed this year, including the issue of non-conventional gas, especially shale gas, which has revolutionized the U.S. gas market and is now being explored for across Latin America and the rest of the globe.
Writing in the August newsletter of the IBP, the institute’s head of gas, Jorge Delmonte, said that after the tragedy that took place at the Fukushima nuclear power plant in Japan, gas power generation assumed “great and instantaneous” importance.
This year the Rio expo and conference are running under the slogan: ‘Innovation and growth with responsibility’. In keeping with this message, an area of the exhibition will be dedicated to improving social and environmental responsibility within the oil and gas sector.
“The industry is aware of its risks, but also the importance of sustainability for the planet and for future generations,” say event organizers. A series of legal cases against U.S. oil major Chevron are ongoing in Brazil after offshore oil seeps were discovered last November.
The expo and conference constitute an important date in Rio’s corporate calendar, helping to fill the city’s top hotels and restaurants as senior oil and gas executives flock to Rio to take advantage of networking opportunities and the chance to catch up on the latest technology.
It also comes at an interesting juncture for the oil and gas industry in Brazil. Delays in developing the much-anticipated pre-salt oil fields off the Brazilian coast have led to considerable debate, while the country’s state-run oil giant, Petrobras, recently reporting its first quarterly loss in over a decade
Tourisme Brésil - São Paulo, mégapole en effervescence
SAO PAULO, BRAZIL - The Global Business Travel Association (GBTA) has released its second GBTA BTI Outlook report on Brazil as part of its semiannual series. The report, sponsored by Visa, includes the GBTA BTI, an index of business travel spending which provides a way to distill market performance over a period of time.
- Brazilian business travel spending will grow by 9.3% in 2012 to $30.1 billion and another 12.6% in 2013
- Brazil is on track to overtake South Korea for 8th place in business travel spend world ranking this year
- Organic growth is forecast to drive a 6% increase in hotel capacity. Whilst future hotel construction will be incentivized further by the forthcoming World Cup and Olympics, demand will still exceed supply
- GBTA BTI is poised to return to a stronger upward trajectory in 2012-2013 on the rising strength of the domestic economy
- Overall Brazilian business travel spending should expand even more rapidly as the global economy recovers
- Brazilian business travel spending is heavily geared to domestic spend (c.80%) but in 2012 growth rates in international outbound travel are twice that of domestic travel
Tad Fordyce, head of global commercial solutions at Visa Inc said: “Year after year Brazil has proven to be a formidable contributor to the global tourism economy. In 2011 global travelers spent more than $2.3 billion in Brazil on their Visa cards, an increase of 10 percent over 2010. This natural momentum combined with hosting the 2014 FIFA World Cup™ and the Rio 2016 Olympic Games is a tremendous opportunity for the burgeoning nation. Visa is committed to helping Brazil support the payment infrastructure necessary to capture this opportunity.”
Ripple Effect of the Global Economy
While the Brazilian economy has remained relatively resilient, it has not been immune to the recession in Europe, the slowdown in Chinese growth or the struggling recovery in the US. Despite these factors, GBTA forecasts that Brazil’s economy will improve slowly in the second half of 2012. Gathering economic momentum is projected to drive 4.1% GDP growth and 12.6% growth in business travel spending in 2013. However, this figure has been downgraded from GBTA’s spring forecast of 14.5% business travel spending growth.
Key Factors: Infrastructure Challenges and Domestic Demand
A lack of adequate capacity and infrastructure is the main drag on even higher rates of business travel growth in Brazil. Airport, hotel, and other travel infrastructure continues to lag increases in demand, particularly in Brazil’s major business hubs.
This may be set to change with 30,500 new hotel rooms either under construction or in advanced stages of planning – a 6% increase in capacity. However, the World Cup in 2014 and Olympics in 2016 will keep supply behind demand for the medium term.
In addition, the Brazilian government has introduced hugely popular policies to stimulate domestic demand and make up for a decline in exports. Household incomes should continue to expand in real terms in 2013 and beyond, and consumption has been further stimulated by a 14% increase in the minimum wage.
Costa continued, “The outlook for Brazil is encouraging for both the economy and business travel. The forthcoming elections in Brazil should create conditions for future growth as policies that stimulate domestic demand are set to continue. With travel spend growing in lockstep with this expansion in demand, GBTA is optimistic about the outlook for business travel and the economy as a whole.”
Brazil Set to Surpass South Korea in Business Travel Spending
If spending trends continue at current levels, this year Brazil is set to surpass South Korea to become the world’s eighth-largest market for business travel spending. Total business travel spending in Brazil should reach $30.1 billion in 2012, an increase of 9.3% from 2011.
Domestic business travel currently contributes 80% of this spending. However, in 2012 Brazilian international outbound business travel grew at twice the rate of domestic travel – indicating that as the global economic environment improves, the Brazilian business travel market should expand even more rapidly.
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