Brazil’s Santa Catarina’s Rise in Tech and Innovation

Santa Catarina, known as a farming paradise, is emerging as a leader in technology and innovation, with a plethora of tech firms and startups in the region.

These startups focus on selling new and scalable products or services. As of 2021, the state has 22,125 tech companies, says Acate (Santa Catarina Association of Technology).

These companies are run by 19,900 entrepreneurs. They employ 76,700 people. The annual revenue of these firms is R$ 23.8 billion ($4.86 billion).

Most tech companies are in the Greater Florianópolis area. This area has 7,300 tech businesses.

It makes almost half of the state’s tech revenue. This amounts to R$ 10.2 billion ($2.08 billion) a year.

The number of startups is growing. According to a 2022 Sebrae report, there are 1,947 startups. This is a 49.5% increase from the previous year.

Santa Catarina’s startups are more advanced than others in Brazil. More of these startups are in the operation and traction stages. This is higher than the national average.

The annual revenue of these startups is also higher. They earn more than the average Brazilian startup.

Their earnings range from R$ 81,000 ($16,530) to R$ 3 million ($612,240). Tech companies are important for the local economy.

Sebrae-SC says they greatly help in collecting taxes. In Florianópolis, 30% of the city’s revenue comes from these companies. This revenue mainly comes from the ISS (Tax on Services).

Marcus Rocha, Sebrae-SC’s innovation and startups manager, talks about these companies. He says they support the economy, society, and environment.

The strongest tech areas in the state are information technology, health, indtechs (industry-focused startups), and agtechs (agribusiness-focused startups).

Many Startups

Startups create many jobs. They grow fast and have a big economic impact. Marcus says they bring in skilled, high-income people. This boosts the local economy.

Santa Catarina’s high income level helps its tech businesses. Iomani Engelmann, president of Acate, explains this.

The state’s Human Development Index (HDI) was 0.792 in 2021. This is higher than Brazil’s average of 0.754.

The per capita income in Santa Catarina was R$ 2,018 ($412) in 2022. This is higher than the national average of R$ 1,625 ($331).

Iomani says the pandemic sped up tech development in the state. Many IT professionals worked remotely in Santa Catarina. They didn’t even live in the state.

The tech ecosystem in Santa Catarina is strong because companies work together. Marcus says they share experiences and solve problems together.

This is known as “business association.” Traditional companies are also joining this tech movement.

They partner with startups to modernize their operations. Marcus says this is essential because these companies face daily competition.

Changing Tax Situation

The tax situation is changing. Acate says the current tax rate for tech is about 10%. A proposed tax reform could raise this to 27.5%.

Iomani suggests that the software and tech sectors should have different tax rates. He worries that high taxes could make companies leave Santa Catarina.

They might move to countries with lower taxes, like Ireland.

Florianópolis, an island city, relies on tech as its main economic driver. Changes in taxes could affect the local economy.

Iomani gives advice to entrepreneurs interested in Santa Catarina’s tech scene.

He suggests understanding the local tech environment and seeking support from organizations like Sebrae. They should then implement their ideas and seek growth opportunities.

In conclusion, a startup is a new company with a unique idea. They are risky but have high growth potential. Companies like Nubank, Rappi, and Quinto Andar started as startups.

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