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E-commerce is growing rapidly in Brazil, led by information-intensive and transaction-intensive sectors such as finance, manufacturing, and retail/wholesale. However, Brazil's highly uneven income distribution is a major barrier for B2C diffusion. Government policies have emphasized promotional or enabling initiatives such as e-procurement, tax filings, and providing Internet access to social institutions. E-commerce legislation is just now being developed, and decisions on taxation are being negotiated in the context of international agreements. E-commerce raises issues for Brazil in terms of its relationship to the global economy. Although most online purchases involve imported goods, e-commerce also offers opportunities to participate in international value chains. [ABSTRACT FROM AUTHOR]

Since the early 1990s, Brazilian IT policy has changed substantially from greenhouse protectionism in selected segments of the market to a more liberal regime. This article analyses the impact of liberalization on IT equipment production, diffusion, employment, and foreign trade. There were both benefits and setbacks, depending on the aspect analyzed. Users benefited from greater access to imported equipment, which could eventually contribute to productivity growth in the overall economy.On the negative side, there was a loss of local linkages with internal sources of components, technology, and employment. The article concludes that the future of the Brazilian IT industry does not seem to be in commodity hardware production. Rather, it lies in design- and engineering-intensive applications. Such "production close to use" can spur domestic use as well as create business opportunities for domestically owned companies in markets not dominated by foreign multinationals. [ABSTRACT FROM AUTHOR]