Portugal is a small but global country. It is also export-driven but niche-oriented. Dr Rui Boavista Marques is the Director, UK and Ireland, and Economic and Commercial Counsellor, at the Embassy of Portugal in the UK. He talks to Jo Murray about Portugal’s future-facing stance, its export-driven economy and the attention it is now receiving for the quality of its design.
Portugal has long been at the forefront of international exploration. After all, we have Portuguese sailors to thank for discovering the coasts of Africa, Asia and Brazil. And let’s not forget that Ferdinand Magellan led the first voyage around the world. Trading posts across Asia, the Americas and Europe were established and Portugal earned its first very worthy credentials as a vital trading nation at the vanguard of new markets and new locations.
Fast forward to the 21st century and discovery is very much an on-going theme around the world, albeit at a somewhat more cerebral level. Technology in all its forms – ICT, biotech, robotics, artificial intelligence etc – is providing a new landscape to be discovered, and Portugal is firmly taking its place at the global technology table.
Sure, the world was rocked by the banking crisis and, yes, Portugal reeled with the punches, but much work has been done since to ensure this small nation is economically healthy enough to set its sights on the future, internationalism and economic growth.
Whilst the Portuguese Government refrains from connecting itself with distinct industrial sectors, there are some very clear trends associated with the way in which Portugal has rebuilt its economy. Technological near-shoring is most definitely on the agenda, points out Dr Boavista Marques. These shared services revolve around HR, IT, accounting and risk analysis services, he says. We are not talking low-value back-office functions but value-added services with a technology angle that are attracting a lot of companies.
In fact, there are 50,000 employees in the business services sector in Portugal. This includes: software development centres, shared services centres, business process outsourcing and business
process management. A total of 100 large scale business services centres exist a and there are seven Fortune 500 companies with business services operations in the country.
Of late, Portugal has garnered a very good reputation for attracting large corporates and their investments. In 2016, Siemens opened its Cyber Security Operation Centre for the protection of industrial facilities, with a joint location in Lisbon, Munich and Milford (Ohio) in the US. Europcar, the rent-a-car company, announced a financial shared service centre in Lisbon in 2014. Currently, it employs 300 staff and serves more than 16 countries. In 2016, Vodafone Group opened a Competence Centre for the development and management of Next Generation Television in Lisbon. Known as TV Hub, this centre will be the innovation lab for the various markets in which the group operates. TV Hub is the 3rd Vodafone Group Competence Centre hosted by Vodafone Portugal. In total, these three areas employ 450 highly specialized staff.
Sitel, the US multinational, opened a new multilingual service centre in Porto for 500 employees in 2015, and US Concentrix is its expanding operations in Portugal with a new BPO service centre providing technical support and customer care to serve all European countries, with staff reaching 1,000. Further, Génération Verlingue selected Portugal in 2015 to establish a shared service centre for finance and accountancy with 120 jobs. And Webhelp of France has selected Lisbon and Porto for a BPO multilingual operation reaching almost 500 employees.
The Portuguese economy is highly dependent upon exports. Car components for French, German, UK and US vehicles are a case in point; and so too is hi-tech machinery. Both Germany’s Siemens and Bosch are significant investor’s in Portugal’s hi-tech machinery sector. “Bosch has invested in the development and production of innovative solutions and technologies in Portugal for the global market of Car Multimedia products because it believes in the potential of the country,” Dr.-Ing. Sven Ost, Technical Plant Manager of Bosch in Braga, is on record as saying. “The Bosch facilities in Braga are highly competitive in terms of quality and productivity in Europe.”
Dr Boavista Marques points out that the country is also a pioneer in automated border control and electronic identity solutions. Portugal’s Vision-Box is to thank for the deployment of the first worldwide eGate to use biometric facial recognition, and it has been blazing a path of success, offering advanced biometric-based solutions in border control, identity management and surveillance to governments, border control authorities and airports ever since. The company’s technology is in operation in more than 60 international airports around the world.
Software development is evolving as a further specialism. For example, Paddy Power, the online betting site, has recently relocated software engineering jobs to Portugal. Dr Boavista Marques also points to the new trend for London-based technology incubators and accelerators to make the move to Lisbon, thereby making it their second home.
Portugal’s technology credentials were perhaps cemented when the Web Summit relocated from Dublin to Lisbon in 2016. It is undoubtedly the biggest technology and start-up event for investors and tech gurus alike; and Portugal is now most definitely a technology destination. Dr Boavista Marques calls Portugal “part of the global innovation system”; a very worthwhile epithet.
He is also clear that talent plays an important role in Portugal’s economic recovery and its technology credentials. Dr Boavista Marques is emphatic that choosing to locate in Portugal is not about seeking low labour costs – albeit that they are definitely competitive – but he says that the talent emerging from the business and engineering schools, and the high level of English spoken without a strong indigenous accent, are creating extremely strong opportunities for his tech-enabled countryfolk.
But it is not all about technology. Of course, Portugal remains an important tourism destination – especially for the British – which never faltered, even during the worst of the economic downturn. And Portuguese design and craftsmanship – ceramics, furniture, fashion and shoes – are covetable too. In fact, Wallpaper magazine has declared Lisbon the best city in the world in its Design Awards 2017. The magazine says that Lisbon “is on a cultural and architectural roll after a programme of regeneration stretching from the centre to the Baixa waterfront”.
Despite massive structural and fiscal imbalances to correct, Portugal is back as a global competitor. Around 500 measures have been implemented since 2010 to improve competitiveness, including the improvement of education levels, the promotion of innovation within the economy and a reduction of bureaucracy. GDP growth is expected to reach 1.5% in 2017 and unemployment for 2017 is predicted to be down to 9.8% (from a high of 18%).
So, although it is early days in terms of economic data, the foundations have been built and the world is noticing that Portugal is back as a player on the world stage and back in the discovery game.