Brazil is going through a delicate phase in its political and economic development after a considerably long period of improvement and growth. A tight presidential election and a few corruption scandals in 2014 put the country in crisis. The workers party was re-elected with less than 1,7% difference in October 2014 and through the past 12 months, the country found itself divided, initiating a wave of political ruptures. What the country experienced in the follow was a fast raise of interests and inflation. The country’s currency (Real – R$) has dropped to almost half its value, and unemployment has returned after a period of full employment.
However, Brazil is never off investors’ radars and there are huge opportunities despite of this crisis… After all, in the near future Brazil will remain South America’s economic engine.
Many of Brazil’s recent economic successes have been closely related to energy developments, as well as the country’s unique energy infrastructure. Brazil has created a mostly renewable energy matrix to fulfill its ever-growing energy needs. However, it relies mostly on hydropower and in the past two years, the country experienced long dry seasons, bringing the water dams to a minimum. The federal government then started to implement rationalization of both water and energy.
Those changes were felt by all population. From August 2014 to August 2015 the price paid for a kW/h has raised up to 48% in some parts of the country, and each one has to think outside of the box to make it through.
Here is a chart showing energy prices (kWh) over the past 15 years in Brazil:
The energy index in Brazil is already among the biggest in the world, and, as we can predict by analyzing this chart, it will continue to grow over the next years.
The cost of electricity
The opportunities, many foreseen in this landscape, are for innovative solutions that can help the organizations reduce consumption of resources.
Private organizations and governmental sectors are striving for a reduction of energy costs while running infrastructures of all kinds. How to reduce the impact of the alarming increase of energy costs in Brazilian organizations?
Many technology players are running fast to present new solutions that integrate aspects of infrastructure management. By integrating digital intelligence into spaces, innovation centers around the world are designing better products to make infrastructure smarter, thus achieving high percentages of savings in many areas, while collecting critical information that will help to make cities intelligent. The goal is to improve the city services throughout technological solutions.
According to an IBM survey (2014), real estate is the second largest expense on the income statement for most companies worldwide and buildings are responsible for 42% of all energy consumption. Executives are coming to realize that they do not have enough information and indicators to allow them to compare the performance of their buildings/facilities with an ideal scenario. From Energy Management to Maintenance Management, from Security Management to Space Management, Moving Management, Environmental Impacts… The market understands that very important aspects of infrastructure management were inexplicably left apart.
Big enterprises are betting high on these new technologies. To name a few, IBM, Cisco, Commscope, Schneider Electric and Johnson Controls, are some of the big innovation centers seeking improvement of Internet of Everything solutions. They are all turning towards Brazil with a very optimistic look because of all the reasons Brazilian enterprises need to reduce costs, particularly energy costs, and they need it now!
Juan Nader, an independent Consultant who writes here periodically has talked to the head of Smarter Cities & infrastructure of IBM Brazil, Mr. Antonio Carlos Dias, and this is what he said about the future of smarter infrastructure in Brazil:
Would you please give us your opinion about technology investments and initiatives in Brazil?
“Over the past few years, Brazil’s ICT market has grown significantly, becoming more mature and solid. However, we are only halfway there when we compare ourselves to more developed countries. Brazil is today one of the 10 largest economies in the world, ranked 13th in scientific research, and it is among the 50 most innovative nations. We believe that the initiatives have to be developed together, and we are on the right path. It will take us a little while to get there, but the roadmap is clear.
It is important to point out that few sectors in Brazil already invest in high tech solutions: banks and financial institutions investments are compared to organizations placed in more developed countries. Brazil has invested a great deal in technology research and innovation throughout the last 10 years. Both in the private sector – through the research centers that were opened in the country – as in the government sector within universities or institutions and organizations. Once again, we have no doubt that the path is correct, but there are still many opportunities to pursue and a lot of work to be done in the country to put ourselves in a high position on the global stage. “
What is your vision about the future of Smarter Infrastructure in Brazil?
“We believe that in the next few years the cities in Brazil will keep investing in smarter infrastructure, automation of processes and sensor technologies. The cities deal with a great number of data, collected from numerous sources: sensors around the city, internet, security cameras, social networks, and so on. It is important that we put intelligence into the process to harvest critical information. The executives and governors will then finally be able to receive reliable information about the city, the facilities and spaces.”
It is clear that the subject will take over very fast during the years to come. Intelligent cities will bring a huge change into people’s life, spaces, and thereby the environment. We know too little about how buildings and facilities run, and how it affects the sustainability of our planet. With a non-stop increasing world population, the building growth will have to follow the population growth.
The new spirit that raises from these new tools are data exchange consensually and cooperation. For example: Facebook was not the first social network, but it was the first social network to view itself as a foundational digital platform, opening its API for apps and creative thinking.
If proved to be effective, innovation spreads like wildfire. Take the rise of data scientist. Once only valued by a handful of Silicon Valley Startups, Chief Data Officers are an integral part of today’s C-suite executives, found everywhere from the White House to Rio’s city hall.
Technological development can lead to cities being no longer unreachable entities. Citizens must be connected directly. Of course cities like London or Copenhagen encompass physical objects like the Buckingham Palace and Frederiksborg, but governors and leaders have to understand that the city is no longer concrete and glass. The most valuable asset the cities have is data shared from its citizens, their digital footprints. Cities exist in our daily gadgets, and the critic information we share daily in our digital networks could change out urban environments.
With more people living in cities than ever before, we are ceaseless demanding public transportation, housing and spaces. Cities we inhabit are becoming microcosms of the impacts of human activity. With digital innovation spreading like a creative pandemic across the globe, we must harness its potential for radical reinvention. Every digitally enabled living in a city is a hub of real-time data. When analyzed in isolation, there is no actionable intelligence. But when you view the data we produce on a macro scale, the possibilities for radical inventiveness are endless.
Welcome to the Smart Cities age!