Brazil meets the global challenge: IT policy in a postliberalization environment

Since the early 1990s, Brazilian IT policy has changed substantially from g reenhouse protectionism in selected segments of the market to a more libera l regime. This article analyses the impact of liberalization on IT equipmen t production, diffusion, employment, and foreign trade. There were both ben efits and setbacks, depending on the aspect analyzed. Users benefited from greater access to imported equipment, which could eventually contribute to productivity growth in the overall economy. On the negative side, there was a loss of local linkages with internal sources of components, technology, and employment. The article concludes that the future of the Brazilian IT i ndustry does not seem to be in commodity hardware production, Rather, it li es in design- and engineering-intensive applications. Such "production clos e to use" can spur domestic use as well as create business opportunities fo r domestically owned companies in markets not dominated by foreign multinat ionals.