Author: Felipe Frisch

Source: O Globo, 12/03/2008

RIO - Brazil continues to be the world champion in bureaucracy and this affects the growth of privately held companies, reveals the International Business Report (IBR), research by Grant Thorton International, represented in Brazil by Terco Grant Thornton. For 64% of the 150 Brazilian entrepreneurs surveyed, who interviewed 7.800 executives in 34 countries, the excessive bureaucracy is the biggest obstacle to growth. In 2007, 60% of Brazilians had indicated bureaucracy as the biggest problem. Brazil's answer is more than double the total of other countries for the same item: 31%. In 2007, the global result for bureaucracy was 37%. 
 

For most of the other countries surveyed, the lack of trained workers is the main concern for the growth of 37% of companies, against 34% in 2007. This is the first time that companies are more concerned with finding skilled workers, because, in the last five years, since the IBR started being made, bureaucracy was always cited as the biggest obstacle to growth. Brazilian businesspeople are also beginning to find it difficult to hire specialized labor. If in 2007 the problem was mentioned by 23% of Brazilian businessmen, this year 37% mentioned that obstacle.
 

Brazilian businessmen should give a weight of 1 to 5 to each of the six items presented in the survey. Bureaucracy was the champion, with 64%, followed by financing costs (43%). Second, financing costs (43%), followed by a lack of working capital (37%). Then, difficulty in finding labor (37%). The lack of long-term financing cited by 35% of those surveyed. And finally, the reduction in demand (24%). All indexes rose in relation to the survey carried out in 2007, only the reduction in demand remained the same. The item on financing costs, for example, went from 36% to 43%. The lack of working capital, from 32% to 40%. 
 

When Brazilians were asked to punctuate each type of problem related to bureaucracy and which had a direct impact on the growth of each company, labor laws appeared first, with 33% of the responses. Then, urban planning laws, with 21% - was the highest rate among all countries for this option. Environmental laws affected 11% of national entrepreneurs. 
 

Speaking about companies' difficulties in finding qualified employees, Alex MacBeath, global leader in services for private companies at Grant Thornton International, recalled that despite the worldwide demographic explosion and more and more people having access to education, the qualification problem it should get worse. "The survey results show that privately held companies are working hard to acquire and retain employees, but there are indications that recruitment is a growing problem."
 

With regard to bureaucracy, in addition to Brazil, countries such as Poland (63%), Thailand (57%), Greece (51%) and Italy (50%) also cited this reason as the biggest problem for the growth of companies. The countries least affected by bureaucracy are Canada (9%), Sweden (10%), the United States and Great Britain (both with 11%).

Comparison between 2007 and 2008 - Figures from Brazil

Bureaucracy and regulations: 64% (2008) - 60% (2007)

Financing costs - 43% (2008) - 36% (2007)

Lack of working capital - 40% (2008) - 32% (2007)

Difficulty in hiring labor: 37% (2008) - 23% (2007)

Lack of long-term financing - 35% (2008) - 34% (2007)

Demand reduction - 24% (2008) - 24% (2007)

Comparison between 2007 and 2008 - Global figures

Difficulty in hiring labor: 37% (2008) - 34% (2007)

Bureaucracy and regulations: 31% (2008) - 37% (2007)

Demand reduction - 29% (2008) - 25% (2007)

Financing costs - 25% (2008) - 20% (2007)

Lack of working capital - 24% (2008) - 20% (2007)

Lack of long-term financing - 20% (2008) - 17% (2007)