Information Technology landscape in PORTUGAL
Human Capital and IT
Current Conditions and Risks:
Portuguese workers
are well-known for their flexibility and are very receptive to new management
techniques. They have the ability to work with management and to assume
responsibility in what companies are calling "self-directed work
teams." Despite the strong work ethic and ease of training, Portugal offers
the most competitive labor costs in the EU. A July 1994 survey by the Institute
of the German Economy concluded that of 21 countries, Portugal easily had
the lowest hourly industrial labor costs-78% less than Germany, 74% less
than Belgium, 68% less than France, 61% less than Spain and 60% less than
Ireland.
Many foreign
multinational companies have been attracted to Portugal because of the
attractive labor costs and the apparent trainability of Portuguese employees.
The automotive industry is case in point (see "Major
Players in the IT Sector"). Portugal's inflation rate and rapid growth
as of late has also continued to attract companies seeking access to EU
markets and who do not rely on highly skilled IT professionals. However,
as Europe emerges from its recession, and other countries (especially in
Eastern Europe) begin to compete more aggressively to attract commerce,
Portugal risks losing business due to the issues depicted below:
Structural Issues:7
Portugal is
one of the least developed countries in the European Union, and its greatest
area for improvement is in education. Historically, little emphasis has
been placed on scholarship and higher learning. As a result, a majority
of the population does not pursue continuing education beyond the compulsory
years. Compulsory education extends to nine years, yet less than 15% of
the population spends more than six years in school. Its literacy rates
are the lowest in the Union. Forty-seven percent of people between the
ages of 15 and 64 possess less than a Level One literacy, meaning that
they can barely read or do basic math.
Portugal
has the largest proportion of low level employees in the European Union:
75% versus 18% in Germany and 43% in the UK. Overall, Portugal's labor
force is relatively skilled and hardworking, yet only 3/4 as productive
as labor in Western Europe. Portugeuse laborers work an average of 42 hours
per week, which is approximately equivalent to the hours worked by the
average American, however, efficiency is generally not as high. Unemployment
is highest among recent college graduates, suggesting that the skills developed
by students are not meeting market demands. However, government initiatives
have placed emphasis on technical skills at the secondary and post-secondary
levels.
Regeneration
of the education system has been under development for the last 10 years,
but the first noticeable changes have really only occured in the last two
years. Major initiatives in telematics (distance learning, university programs)
are now being employed to restructure the educational system and, in particular,
to generate more graduates with technical skills. At present, though, much
effort still needs to be placed on training educators, trainers and teachers
in using information technology to speed the rate of change. Efforts have
been delayed in the past due to a lack of social and cultural need for
such technologies, as well as inadequate telecommunications infrastructures
in which to build educational networks.
Overview of Progress:8
As a result
of renewed emphasis on education, as of April 1998 some 2000 schools now
have computers, with a ratio of approximately 1 PC to every 40/45 students.
Budgets of universities have in many cases been doubled while access to
secondary and tertiary education has tripled in many regions.
Portugal
spends 5.5% of its GDP on education, exceeding that of France (5.4%), the
United Kingdom (5.3%), Spain (4.5%) andGermany (4.0%). Fourteen universities
and three higher education colleges prepare Portuguese youth for a variety
of professional careers. For those choosing a more technical career path,
15 polytechnic institutes, one in each district in the country, train students
in a variety of advanced technologies.
The Institute
for Employment and Professional Training (IEFP) offers courses for Portuguese
workers to learn new fields or to upgrade their existing skills through
a network of Professional Training Centers. Once trained, the Institute
provides placement services for workers seeking employment with companies
located in Portugal. Additionally, the Institute works with companies seeking
professional training to design courses for their employees.
The Portuguese
Education Development Program (PRODEP) is successfully increasing participation
in higher education. It states that university attendance has increased
from 11% to 25%, and secondary studies from 40% to 70%.
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