Information Technology landscape in PORTUGAL

Points of Consideration for the non-IT Firm:

• Economic environment  and government incentives to attract investment are positive. The economy is growing faster than its more developed counterparts in the EU, yet with lower inflation and labor costs.
• The telecommuncations infrastructure is still below Western European standards, yet is improving rapidly. The government is outspending other Western European countries in telecommunications infrastructure investments. Generally, other infrastructure (roads, transport) is considered good and facilitates rapid development of telecommunications networks.
• While telephone penetration is relatively low for a moderatly developed country, current infrastructure is adequate enough to support expansion of facilities and offices, if required.
• Portugal's location and ports are an inherent advantage for exports to multiple areas: North America, Western Europe, Northern Africa, CIS and Middle East.
• Evidence of other large multinationals gives testimony to Portugal's improving strengths in the development and procurement of information technology. However, efforts should be expanded in developing nascent demand domestically for cutting edge information technology. The boom in telecommunications equipment export/import may not be sustainable to continuously attract IT firms.
• Costs for interconnection with the PSTN for data transmission, fax and telephony are still in need of further rationalization. However, Portugal has taken positive steps in moving forward in policy and tariff harmonization, even ahead of its Western European parters. Its efforts to open the market to competition prior to its extended monopoly being terminated indicate a willingness to establish a market-based mentality, and a long-range view of maintaining competitiveness within the EU framework.
• The greatest impediment to Portugal in securing a place for itself in the global community is its historic lack of emphasis on education. As economies improve across Europe, Portugal's competively low labor costs and strategic location will no longer sustain an advantage for the country. As Europe embraces other countries (from Eastern Europe) into the Union, Portugal will risk losing structural funds for its development, as well as potential business to other emerging economies where highly educated, skilled labor exists. The Portuguese government's educational initiatives have recently taken on greater force, and a press report indicated that technically skilled graduates are now "booming" from Portuguese universities. If this continues to be the case, rapid advancement will take place and Portugal will increasingly become an extremely attractive place for business for both IT and non-IT firms.