President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

In late October following a significant victory for Jair Bolsonaro in Brazil’s presidential elections, the stock market for Latin America’s largest country shot up. Financial markets reacted favorably to the news because Bolsonaro, a free-market proponent, promises to deliver broad economic reforms, fight corruption and work to reshape Brazil through a pro-business agenda. While some have dubbed him as a far-right “Trump of the Tropics” against a backdrop of many Brazilians feeling that government has failed them, the business outlook is extremely positive.

When President-elect Bolsonaro appointed Santander executive Roberto Campos as new head of Brazil’s central bank in mid-November, Brazil’s stock market cheered again with Sao Paulo’s Bovespa stocks surging as much as 2.65 percent on the day news was announced. According to Reuters, “analysts said Bolsonaro, a former army captain and lawmaker who has admitted to having scant knowledge of economics, was assembling an experienced economic team to implement his plans to slash government spending, simplify Brazil’s complex tax system and sell off state-run companies.”

Admittedly, there are some challenges as well. Most notably, pension-system reform tops the list of priorities to get on the right track quickly. A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015. According to the new administration, Brazil’s domestic product could grow by 3.5 percent during 2019 if Congress approves pension reform soon. The other issue that’s cropped up to tarnish the glow of Bolsonaro coming into power are suspect payments made to his son that are being examined by COAF, the financial crimes unit.

While the jury is still out on Bolsonaro’s impact on Brazilian society at large after being portrayed as the Brazilian Trump by the opposition party, he’s come across as less authoritarian during his first days in office. Since the election, his tone is calmer and he’s repeatedly said that he plans to govern for all Brazilians, not just those who voted for him. In his first speech as president, he invited his wife to speak first which has never happened before.

Still, according to The New York Times, “some Brazilians remain deeply divided on the new president, a former army captain who has hailed the country’s military dictators and made disparaging remarks about women and minority groups.”

Others have expressed concern about his environment impact with the “an assault on environmental and Amazon protections” through an executive order within hours of taking office earlier this week. However, some major press outlets have been more upbeat: “With his mix of market-friendly economic policies and social conservativism at home, Mr. Bolsonaro plans to align Brazil more closely with developed nations and particularly the U.S.,” according to the Wall Street Journal this week.

Based on his publicly stated plans, here’s why President Bolsonaro will be good for business and how his administration will help build an even stronger entrepreneurial ecosystem in Brazil:

Bolsonaro’s Ministerial Reform

President Temer leaves office with 29 government ministries. President Bolsonaro plans to reduce the number of ministries to 22, which will reduce spending and make the government smaller and run more efficiently. We expect to see more modern technology implemented to eliminate bureaucratic red tape and government inefficiencies.

Importantly, this will open up more partnerships and contracting of tech startups’ solutions. Government contacts for new technology will be used across nearly all the ministries including mobility, transportation, health, finance, management and legal administration – which will have a positive financial impact especially for the rich and booming SaaS market players in Brazil.

Government Company Privatization

Of Brazil’s 418 government-controlled companies, there are 138 of them on the federal level that could be privatized. In comparison to Brazil’s 418, Chile has 25 government-controlled companies, the U.S. has 12, Australia and Japan each have eight, and Switzerland has four. Together, Brazil-owned companies employ more than 800,000 people today, including about 500,000 federal employees. Some of the largest ones include petroleum company Petrobras, electric utilities company EletrobrasBanco do Brasil, Latin America’s largest bank in terms of its assets, and Caixa Economica Federal, the largest 100 percent government-owned financial institution in Latin America.

The process of privatizing companies is known to be cumbersome and inefficient, and the transformation from political appointments to professional management will surge the need for better management tools, especially for enterprise SaaS solutions.

STEAM Education to Boost Brazil’s Tech Talent

Based on Bolsonaro’s original plan to move the oversight of university and post-graduate education from the Education Ministry to the Science and Technology Ministry, it’s clear the new presidential administration is favoring more STEAM courses that are focused on Science, Technology, Engineering, the Arts and Mathematics.

Previous administrations threw further support behind humanities-focused education programs. Similar STEAM-focused higher education systems from countries such as Singapore and South Korea have helped to generate a bigger pipeline of qualified engineers and technical talent badly needed by Brazilian startups and larger companies doing business in the country. The additional tech talent boost in the country will help Brazil better compete on the global stage.

The Chicago Boys’ “Super” Ministry

The merger of the Ministry of Economy with the Treasury, Planning and Industry and Foreign Trade and Services ministries will create a super ministry to be run by Dr. Paulo Guedes and his team of Chicago Boys. Trained at the Department of Economics in the University of Chicago under Milton Friedman and Arnold Harberger, the Chicago Boys are a group of prominent Chilean economists who are credited with transforming Chile into Latin America’s best performing economies and one of the world’s most business-friendly jurisdictions. Joaquim Levi, the recently appointed chief of BNDES (Brazilian Development Bank), is also a Chicago Boy and a strong believer in venture capital and startups.

Previously, Guedes was a general partner in Bozano Investimentos, a pioneering private equity firm, before accepting the invitation to take the helm of the world’s eighth-largest economy in Brazil. To have a team of economists who deeply understand the importance of rapid-growth companies is good news for Brazil’s entrepreneurial ecosystem. This group of 30,000 startup companies are responsible for 50 percent of the job openings in Brazil and they’re growing far faster than the country’s GDP.

Bolsonaro’s Pro-Business Cabinet Appointments

President Bolsonaro has appointed a majority of technical experts to be part of his new cabinet. Eight of them have strong technology backgrounds, and this deeper knowledge of the tech sector will better inform decisions and open the way to more funding for innovation.

One of those appointments, Sergio Moro, is the federal judge for the anti-corruption initiative knows as “Operation Car Wash.” With Moro’s nomination to Chief of the Justice Department and his anticipated fight against corruption could generate economic growth and help reduce unemployment in the country. Bolsonaro’s cabinet is also expected to simplify the crazy and overwhelming tax system. More than 40 different taxes could be whittled down to a dozen, making it easier for entrepreneurs to launch new companies.

In general terms, Brazil and Latin America have long suffered from deep inefficiencies. With Bolsonaro’s administration, there’s new promise that there will be an increase in long-term infrastructure investments, reforms to reduce corruption and bureaucratic red tape, and enthusiasm and support for startup investments in entrepreneurs who will lead the country’s fastest-growing companies and make significant technology advancements to “lift all boats.”

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China’s Infervision is helping 280 hospitals worldwide detect cancers from images

Until recently, humans have relied on the trained eyes of doctors to diagnose diseases from medical images.

Beijing-based Infervision is among a handful of artificial intelligence startups around the world racing to improve medical imaging analysis through deep learning, the same technology that powers face recognition and autonomous driving.

The startup, which has to date raised $70 million from leading investors like Sequoia Capital China, began by picking out cancerous lung cells, a prevalent cause of death in China. At the Radiological Society of North America’s annual conference in Chicago this week, the three-year-old company announced extending its computer vision prowess to other chest-related conditions like cardiac calcification.

“By adding more scenarios under which our AI works, we are able to offer more help to doctors,” Chen Kuan, founder and chief executive officer of Infervision, told TechCrunch. While a doctor can spot dozens of diseases from one single image scan, AI needs to be taught how to identify multiple target objects in one go.

But Chen says machines already outstrip humans in other aspects. For one, they are much faster readers. It normally takes doctors 15 to 20 minutes to scrutinize one image, whereas Infervision’s AI can process the visuals and put together a report under 30 seconds.

AI also addresses the long-standing issue of misdiagnosis. Chinese clinical newspaper Medical Weekly reported that doctors with less than five years’ experience only got their answers right 44 percent of the time when diagnosing black lungs, a disease common among coal miners. A research from Zhejiang University that examined autopsies between 1950 to 2009 found that the total clinical misdiagnosis rate averaged 46 percent.

“Doctors work long hours and are constantly under tremendous stress, which can lead to errors,” suggested Chen.

The founder claimed that his company is able to improve the accuracy rate by 20 percent. AI can also fill in for doctors in remote hinterlands where healthcare provision falls short, which is often the case in China.

Winning the first client

infervision medical imaging

A report on bone fractures produced by Infervision’s medical imaging tool

Like any deep learning company, Infervision needs to keep training its algorithms with data from varied sources. As of this week, the startup is working with 280 hospitals – among which twenty are outside of China – and steadily adding a dozen new partners weekly. It also claims that 70 percent of China’s top-tier hospitals use its lung-specific AI tool.

But the firm has had a rough start.

Chen, a native of Shenzhen in south China, founded Infervision after dropping out of his doctoral program at the University of Chicago where he studied under Nobel-winning economist James Heckman. For the first six months of his entrepreneurial journey, Chen knocked on the doors of 40 hospitals across China — to no avail.

“Medical AI was still a novelty then. Hospitals are by nature conservative because they have to protect patients, which make them reluctant to partner with outsiders,” Chen recalled.

Eventually, Sichuan Provincial People’s Hospital gave Infervision a shot. Chen with his two founding members got hold of a small batch of image data, moved into a tiny apartment next to the hospital, and got the company underway.

“We observed how doctors work, explained to them how AI works, listened to their complaints, and iterated our product,” said Chen. Infervision’s product proved adept, and its name soon gathered steam among more healthcare professionals.

“Hospitals are risk-averse, but as soon as one of them likes us, it goes out to spread the word and other hospitals will soon find us. The medical industry is very tight-knit,” the founder said.

It also helps that AI has evolved from a fringe invention to a norm in healthcare over the past few years, and hospitals start actively seeking help from tech startups.

Infervision has stumbled in its foreign markets as well. In the US, for example, Infervision is restricted to visiting doctors only upon appointments, which slows down product iteration.

Chen also admitted that many western hospitals did not trust that a Chinese startup could provide state-of-the-art technology. But they welcomed Infervision in as soon as they found out what it’s able to achieve, which is in part thanks to its data treasure — up to 26,000 images a day.

“Regardless of their technological capability, Chinese startups are blessed with access to mountains of data that no startups elsewhere in the world could match. That’s an immediate advantage,” said Chen.

There’s no lack of rivalry in China’s massive medical industry. Yitu, a pivotal player that also applies its AI to surveillance and fintech, unveiled a cancer detection tool at the Chicago radiological conference this week.

Infervision, which generates revenues by charging fees for its AI solution as a service, says that down the road, it will prioritize product development for conditions that incur higher social costs, such as cerebrovascular and cardiovascular diseases.

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