Microsoft's investment in Brazil to spur Rio research boom-execs

Wed Nov 7, 2012 3:27pm EST

* New $100 mln research center anchors downtown renewal

* Brazil pushes for high-tech jobs to boost productivity

BRASILIA Nov 7 (Reuters) - Microsoft Corp will invest 200 million reais ($100 million) in a new research center in Rio de Janeiro, executives said on Wednesday, helping Brazil's push to generate high-tech jobs in an economy long built on commodities and basic industry.

The investment over the next three to four years will focus on the development of new search technology, according to Microsoft's most senior executive in Latin America, Hernan Rincon, and other management at a news conference in the capital Brasilia.

The research center - one of four such offices in the world and the first in Latin America - anchors efforts to renovate Rio's downtown port district ahead of the 2016 Olympic Games, which the city will host.

Long home to headquarters of oil and mining companies, Rio has gained attention recently for its nascent Internet startup scene, offering entrepreneurs access to sun, sand and seed capital without the traffic jams, pollution and other hassles of sprawling Sao Paulo, Brazil's economic capital.

Microsoft's investment also reinforces Rio's growing attractiveness for major multinational companies. Starting in the 1980s, many spurned the city as crime soared, urban infrastructure decayed and government became chaotic.

Cisco Systems Inc announced plans for a research center in Rio this year, joining similar facilities owned by General Electric, Halliburton, Baker Hughes and Schlumberger.

Officials said they gave Microsoft no tax breaks to secure the investment, but President Dilma Rousseff has made a priority of generating more jobs in Brazil's tech sector as a way to boost innovation and productivity.

After lengthy negotiations of tax breaks and other benefits, Taiwan's Foxconn announced last month that it would invest 1 billion reais to build a new electronics manufacturing complex in Sao Paulo. Foxconn Technology Group is the trading name of Hon Hai Precision Industry Co, the main assembler of Apple Inc devices.

Brazil has also mandated wireless telephone carriers build new networks with at least 60 percent Brazilian hardware, spurring equipment manufacturers to set up local factories.