Brazilian Businesses Optimistic About Coming Pan American Games

Micro business generates 40% of formal jobs in Rio, Brazil Micro and small businesses are optimistic regarding the Pan American Games, to be held in the southeastern Brazilian city of Rio de Janeiro from July 12 to 19. This was one of the conclusions drawn by a survey run by the Brazilian Micro and Small Business Support Service (Sebrae) and the Getúlio Vargas Foundation (FGV), and disclosed this week.

In the metropolitan area of Rio, 62.7% of the companies surveyed are either expecting a good or a very good impact on their businesses. In the interior of the state, which tends to perceive the positive impact of the Games in a less direct manner, the percentage drops to 32.5%. Micro and small businesses answer to 98.5% of commercial establishments in Rio de Janeiro, and generate 40% of formal jobs in the state.

In the interviews, conducted in March, businessmen were also questioned as to what could be done in order to boost the benefits from the Games. Increased security was pointed by 34.6% of interviewees as the main factor, followed by greater publicity (30.8%), tenders and business opportunities in the segment (17.6%), improved infrastructure (10.2%), promotion of events in other cities in the state (3.7%) and deployment of workforce (3.1%).

"It is certainly quite a challenge to carry out this event in Rio. The Pan American Games will mobilize a huge human and financial capital in the city. Businessmen from Rio de Janeiro must know how to seize the range of opportunities that will open themselves up," said the superintendent at Sebrae-Rio de Janeiro, Sérgio Malta.

The Tourism Department of the Municipality of Rio de Janeiro (RioTur) estimates that the city will receive from 553,000 to 626,000 visitors for the event, including tourists and delegations.

The survey was carried out in 312 establishments, in 35 segments of the trade and services sectors. These businesses are part of the database for the Performance Index (IDES) survey, conducted on a monthly basis by Sebrae and by FGV in order to measure the revenue, employed personnel, and payroll of micro and small businesses in the state.

According to data collected in March, companies saw a 5.6% increase in revenues, which reached 3.93 billion Brazilian reais (US$ 2 billion), a 1.5% increase in payroll, which corresponds to the injection of 889 million reais (US$ 454 million) into the economy, in wages paid to employees, and 18,900 new jobs were created.

Also disclosed were data of the Dynamism Index (IDIN), measured on a quarterly basis, using a methodology developed by Sebrae/Rio and by FGV in order to assess the evolution of measures linked to increased competitiveness for those companies. The index recorded a slight decrease, at 16.8 points, compared with the last quarter of 2006, when it stood at 19.2 points, a result ascribed to a usual reduction in this period, during which the sector does not usually receive large investments.

According to the IDIN, social support or environmental prevention actions were carried out by 27.8% of the companies; 20.5% have implemented innovations in their products or processes; 18.8% have invested in machinery and equipment; 14.9% have provided training to partners and employees; 14.4% have engaged in associative actions, and 8.5% have introduced information technology (IT) applications.

The Business Confidence Index (ICON), which measures future expectations of companies for the next six months, stood at 69.5%, showing that micro and small businessmen in the state remain optimistic.

Sebrae

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