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Nearshore outsourcing: 5 reasons to choose Portugal | Near Partner Blog

Nearshore outsourcing: 5 reasons to choose Portugal

Portugal is a great place for your next vacations. There are millions of reasons, from our amazing weather, the outstanding beaches or the incredible wine. The World Travel Awards just recognized Portugal as the World’s Leading Destination and Lisbon as the World’s Leading City Destination. You definitely can’t beat that…

These are great reasons to visit and live in Portugal. However, there is so much more than meets the eye!

Home of the biggest tech conference in the world and top choice for foreign investors, nowadays Portugal is called the new Silicon Valley. But, why?

What are the key drivers behind these claims? And how do they relate to the exponential growth in outsourcing in IT services?

A couple hundred reasons can be listed, but time is money. Let me highlight 5 great reasons why you should choose Portugal as your outsourcing destination:

1. A global talent hub

Here you’ll find a pool of highly skilled, experienced and driven workforce.

According to IMD, Portugal has “skilled labour readily available”. Still according to IMD, the “international experience of senior managers is generally significant”, and “the management education meets the needs of the business community”.

Besides that, the Portuguese language is one of the top 5 most spoken language in the world and we also have high proficiency in English (#5 in the world, according to IMD).

Portuguese are great communicators and communication is of paramount importance for the success of a project.

This is the current scenario. The trend is to grow even more. Portugal is the 3rd country that most invests in education per student.

Portugal is ranked in 17th at IMD World Talent Ranking 2018. comparing favourably with Ireland (21st), UK (23tr), France (25th), Slovenia (30th), Spain (31st), Poland (38th) or Ukraine (48th).
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This report is based on countries’ performance in three main categories — investment and development, appeal and readiness. The three categories assess how countries perform in a wide range of areas. These include education, apprenticeships, workplace training, language skills, cost of living, quality of life, remuneration and tax rates.

Moreover, if you have a problem, you’ll want a Portuguese at hand. We all have a MacGyver within ourselves! 😊

Nearshore outsourcing: 5 reasons to choose Portugal

2. Prime location

We have 8 hours of daily sunshine, 290 rain-free days and 2 600 km of coastline. That alone makes Portugal one of the most appealing places on earth. Apart from that, Portugal co-ranks #1 worldwide in trading across borders, acting as a door to the European market (>500 M people) and Portuguese-speaking countries (>260 M people).

Sounds interesting, doesn’t it?

And let’s not forget that Portugal is also in the same time zone as London, one of the most important global markets.

Our adaptability to multicultural approaches and international environment is in our blood. For centuries we crossed the seas and engaged with many cultures. You still can find this atmosphere today. Our hospitality, open spirit and openness to work with different cultures is a major plus.

3. Great value to cost ratio

Obviously, cost will always be an aspect in mind when outsourcing software development. Saving money is a priority for any business, but other factors must be remembered. Skilled people and an overall political and social stability are key when you are choosing an outsourcing destination.

If you only care about cost, you can choose the Asian market. However, along the way, you’ll probably find a few bumps the in the road: communication, time zone, social environment, political or economic instability, among others.

However, if you want to consider the cost / benefit ratio, Portugal is the place to look at.

According with The State of European Tech 2018,  the average software engineer salary per year in Lisbon is $31,500, while in Berlin is nearly 1.9x times higher ($58,750). In London the average is $54,000 and for our neighbours in Barcelona is $40,250.

The Portugal Wage Growth in Services is projected to trend around 2.60 percent in 2020 (by Trading Economics), which sets us still far below the leading European markets, such as UK and Germany.

In 2019, the Cost of Living Index ranks Portugal in the middle of chart (50th out of 119 countries), comparing favourably with Ireland (10th), UK (24th), France (11th), Slovenia (39th) and Spain (38th).

As you can see, Portugal offers a great value for money.

4. European Leader in connectivity: accessibility and technological infrastructures

When it comes to connectivity, nothing compares to us. According to Europe’s Digital Progress Report 2017 – Connectivity, Portugal is the leader in fibre-to-the-premises (FTTP) access in Europe, with almost 90% of the territory covered.

Portugal is ranked 19 out of a pool of 138 countries by the Global Competitiveness index report 2018 in quality of infrastructures, such as roads, telecommunications and internet access, and has one of the best internet velocities in the EU28 due to a focus on public investment.

Europe's Digital Progress Report (EDPR) 2017, Country Profile Portugal

Europe’s Digital Progress Report (EDPR) 2017, Country Profile Portugal

 

5. Strong social and political stability

It honours us to say that, Portugal is the 4th most peaceful country in the world. This, according to the report Business & Peace 2018, acts as a good predictor of a country’s future performance in several macroeconomic indicators and our numbers reflects this statement.

Portugal is a symbol of EU recovery. The GDP in Portugal expanded 2.10% in the third quarter of 2018 over the same quarter of the previous year. This year, the GDP annual growth rate is expected to be 2.20% by the end of the first quarter, according to Trading Economics global macro models and analysts’ expectations.

These numbers are also reflected by the amazing progress of the labour market. In fact, between 2014 and 2017, the number of jobs grew by over 351,000, which represents an average annual growth of 1.9%, slightly higher than the average GDP growth of 1.8% in the same period.

Portugal Unemployment Rate Forecast

Wrapping up

Although the global market might seem swamped in outsourcing options, finding the perfect development team for your project can be harder than expected. Portugal meets all the requirements – great talent, location, competitiveness and social, political and regulatory framework – to be seriously considered one of the most competitive nearshore outsourcing destinations. World-class businesses like Accenture, Altran, Cisco, Google, Microsoft, Nokia Siemens or SAP, already have highly successful nearshore operations in Portugal.

What about you? Are you looking to extend your development team? Let us help! Share your needs with us.

Patrícia Peixinho

Marketing & communication lover. Curious, imaginative, ingenious. Crossfit addict. Hungry for challenges and enthusiastic about life!