OECD Reviews of Digital Transformation: Going Digital in Brazil is part of a new series of OECD country reviews. The OECD Reviews of Digital Transformation analyse recent developments of the digital economy in countries, review policies related to digitalisation and make recommendations to increase policy coherence in this area.

Going Digital in Brazil examines opportunities and challenges raised by digitalisation in Brazil, looks at current policies and makes recommendations to improve them, based on the OECD Going Digital Integrated Policy Framework. The Review focuses on selected components of the framework according to the priorities expressed by Brazil.

This chapter sets the scene for the Review. It begins with an overview of the recent economic and social trends in Brazil and the opportunities the digital transformation could provide in improving the life and well-being of citizens. It then presents the current government response, focusing on Brazil’s E-Digital Strategy. Next, it introduces the OECD Going Digital Integrated Policy Framework. The final section presents an outline of the Review.

The availability of high-quality and fixed and mobile communication services at competitive prices are crucial to go digital. In Brazil, one of the most important challenges in this domain concerns expanding quality broadband to rural and remote areas. With a geographical size of 8.5 million square kilometres (km2), the country has an area approximately eight times the size of France and Spain combined, while comprising 60% of the Amazon forest within its borders. In addition, a large percentage of the population is sparsely distributed, which exacerbates the issue. This geographical feature creates important challenges for Brazil to expand communication networks in rural and remote areas.

The Brazilian Digital Transformation Strategy recognises that “digital transformation is an opportunity for the entire nation to take a leap forward. Digital technologies provide the tools for a profound transformation in government actions, in competitiveness and productivity in the private sector, and in empowerment and inclusion in society, so that everyone can develop economically and socially, and thrive in quality of life” (MCTIC, 2018). The Brazilian Civil Rights Framework for the Internet (Marco Civil da Internet) recognises that “access to the Internet is essential to the exercise of citizenship”. For Brazil to realise these premises, policies have to ensure inclusion, so that digital divides do not reproduce the “analogue” divides of the Brazilian society.

Brazil is increasingly being targeted by digital security attacks. CERT.br, the private sector Brazilian National Computer Emergency Response Team (Centro de Estudos, Resposta e Tratamento de Incidentes de Segurança no Brasil) maintained by the executive branch of the Brazilian Internet Steering Committee (Núcleo de Informação e Coordenação, NIC.br), received over 875 000 incident notifications in 2019, 78% of which originated from Brazil ( and ). The Brazilian Government Computer Security Incident Response Team (Centro de Tratamento e Resposta a Incidentes Cibernéticos de Governo, CTIR) also reports an increasing number of incidents (). A brief analysis of data from other sources confirms this situation. In 2018, EUROPOL found that Brazil is both a leading target and source of attacks in Latin America, and further noted that 54% of digital security attacks reported in Brazil originate from within the country (EUROPOL, 2018) According to the LexisNexis Threatmetrix (2019), Brazil is the sixth country from which attacks originate globally (in volume).

After two years of recession in 2015 and 2016, the Brazilian economy was gradually recovering, when the coronavirus (Covid-19) outbreak hit. The economy is projected to contract by more than 9.1% during 2020 in the double-hit scenario, which assumes a second lockdown in Brazil at the end of the year. The recovery in 2021 would be moderate in this scenario, with projected growth of 2.4%. In the single-hit scenario, the economy is projected to contract by 7.4% during 2020, followed by an expansion of 4.2% in 2021. As lockdown measures are eased and activity resumes, the economy is projected to recover slowly and partially, but some jobs and firms will not be able to survive. Unemployment is predicted to reach historic highs before receding gradually (OECD, 2020a).

Digital transformation is reshaping established markets and creating new ones. Successful business models make innovative use of data and data analytics to create value, enhancing the efficiency of production processes, transforming data into new services or establishing entirely new markets (OECD, 2015a). Emerging technologies that enhance the availability and usability of data, including smart sensors and the Internet of Things (IoT), are significantly expanding the scope for data-driven business models (OECD, 2017a). In many cases, data services are integrated into existing products and value chains, creating new economies of scope (OECD, 2019a).

The previous chapters of this Review analysed recent developments in digital transformation in several policy fields in Brazil. The analysis resulted in an assessment and a set of policy recommendations for each field. These recommendations are discussed below and mapped against the OECD Going Digital Integrated Policy Framework presented in and summarised in .