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PORTUGAL AS  A  NEARSHORE  OUTSOURCING   DESTINATION   2015  EDITION   Execu&ve  Summary  


Index 1.  Portugal,  a  Nearshore  Outsourcing  Des&na&on     (2015  Edi&on)   2.  Conclusions  

The current  study  was  based  on  informaGon  obtained  from  various  sources  deemed  reliable  and  credible  by  the  enGGes  that  used  it.  NBSE-­‐Nova  Business  School  of  Economics   and  Portugal  Outsourcing  AssociaGon  did  not  validate  the  informaGon  when  producing  this  study.  Portugal  Outsourcing  AssociaGon  may  in  future  update  this  study  and  the   informaGon  contained  herein.  The  AssociaGon  may  also  produce  different  analysis  from  the  ones  expressed  in  this  paper.     The   copying,   reproducGon,   distribuGon   and   disposal   of   this   study   are   prohibited.   However,   the   informaGon   contained   herein   may   be   used   in   the   preparaGon   of   other   documents,  studies  or  for  public  use,  without  commercial  purposes,  and  subject  to  obtaining,  whenever  appropriate,  the  respecGve  authorizaGons  from  the  sources  used;   references  to  this  study,  to  Portugal  Outsourcing  AssociaGon  and  to  the  sources  used  must  always  be  guaranteed.  

2 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


PORTUGAL OUTSOURCING   The  AssociaGon  and  main  goals  

Associação Portugal   Outsourcing   gathers   some   of   the   top   ITC   and   BPO   service   providers   in   Portugal   with   the   objecGve   of   contribuGng   for   the   development   of   the   Portuguese   Outsourcing   Sector   and   its   impact   on   the   country’s   economy   by   raGonalizing  resources,  maximizing  efficiencies  and  creaGng  jobs.                                                                                                    

3 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Portugal

Key macroeconomic  indicators  2009-­‐2014 Varia&on  of  GDP  (%)  

Varia&on of  Exports  (%)  *  

1,9%

8,8%

7,4%

6,1%

0,9%

2,9%

1,8% -­‐1,4%  

-­‐1,8% -­‐3,0%  

2009

-­‐3,3%

2010

2011

-­‐8,3%

2012

2013

10,49

10,42

2014

2009 Q3  

2010 Q3  

2011 Q3  

2012 Q3  

2013 Q3  

2014 Q3  

Popula&on (millions)   10,57

10,57

10,54

Varia&on of  Imports  (%)  *   2009  

2010

Infla&on (%)  

2011

2012

2013

3,7%

2014 (1)  

6,7%

3,9%

5,3%

3,7% 2,8%  

1,4%

-­‐0,9%

-­‐7,0%

-­‐8,8%

0,3% -­‐0,3%   (1)  No data available at the issuance date of this report

2009 Q3  

2010 Q3  

* Change  year  overyear  

4 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  

2011 Q3  

2012 Q3  

2013 Q3  

2014 Q3  


PORTUGAL AS  A  NEARSHORE   OUTSOURCING  DESTINATION     Domain:  Country     Exports continue to show a continuous growth   Higher economic activity is reflected in a GDP growth in 2014, inverting previous years contractions

5 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Domain: Country   GDP growth rate (%*) Eurostat 2013 (PT: 2014 data) (1)

R&D and innovation investments (% of GDP)

Infrastructures

ES

CZ

IE

1,50

1.70

3.40

HU

PL

RO

2014

CZ

0.50

0,77

1.21

1.33

RO

PL

HU

ES

0,9%

1,0%

1,4%

1,7%

2,4%

3,9%

PL

IE

ES

CZ

HU

3.90

4,30

4.30

4.40

4.50

4.80

4.80

RO

PL

HU

CZ

ES

IE

3.96

4.24

4.32

4.49

4.51 4.69

4.73

5.07

Technology Report 2014 148 Countries; Score [min 1; max 10]

RO

PL

HU

CZ

ES

Ease of Doing Business Rank

54th

48th

44th

33rd

32nd

HU

RO

CZ

ES

PL

54.29

70.24

74.71

76.42

76.97

RO

HU

ES

PL

CZ

EU’s Member States Growth Performance on Innovation ‘06-’13 EU Innovation Scorecard 2014 60 Countries [0 -100%] (2)

138 Countries; Index [min 1; max 7]

Networked Readiness Index WEF(1) and INSEAD - The Global Information

The World Bank – Doing Business 2015 189 Countries (1)  No 2014 data available for ES, CZ, IE, HU, PL and RO Values from 2014 edition; * = % change to previous year. (2) No data available for Romania

0,9

IE

WEF(1) - The Enabling Trade Index 2014

Costs

0.20

1.84

Enabling Trade Index Competences

-0.70

1.72

IMD World Competitiveness Yearbook 2013 60 Countries

Country

-1.20

Governance Matters Score

The World Bank Group The Worldwide Governance Indicators, 2013 Update 215 Countries; Ranking [0; 100]

6 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  

1.49

IE 25th

13th

IE 77.62

90.01

IE


PORTUGAL AS  A  NEARSHORE   OUTSOURCING  DESTINATION     Domain:  Infrastructures  

  The quality of infrastructures continues to be a competitiveness factor highly valued by foreign investors.

7 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Domain: Infrastructures   Communications Technology meets Business Needs

42nd

39th

33rd

30th

24th

IE

PL

HU

ES

CZ

51st

29th

23rd

21st

14th

IMD World Competitiveness Yearbook 2014 60 Countries (1)

HU

PL

ES

IE

CZ

Availability of Latest Technologies in Your Country

102nd

57th

53rd

33rd

30th

PL

HU

CZ

ES

IE

0,35

0,38

0,39

0,40

0,47

0,53

ES

IE

CZ

PL

CZ

HU

4.5

5.4

IMD World Competitiveness Yearbook 2014 60 Countries (1)

Internet Bandwidth Speed (per internet user kbps)

Country

Infrastructures

The Global Information Technology Report 2014 148 Countries; Ranking [0 -148] (1)

Investment in Telecoms (% of GDP) Competences

Costs

IMD World Competitiveness Yearbook 2014 60 Countries [0 -100%] (1)

Intellectual property protection

(1)  No data available for Romania

2.9

3.7

3.8

3.9

4.0

World Economic Forum, The Global Competitiveness Report 2013-2014; 148 Countries; Ranking [1-7]

RO

PL

CZ

HU

ES

Quality of overall infrastructure

14th

10th

15th

IE

3.4

4.0

4.9

5.1

5.2

6.0

World Economic Forum, The Global Competitiveness Report 2013-2014; 148 Countries; Ranking [0-1]

RO

PL

HU

CZ

IE

ES

e-Government Rank

64th

42nd

53rd

39th

37th

22nd

12th

RO

PL

CZ

HU

NL

IE

ES

United Nations Global E-Government Survey 2014 193 Countries ; Ranking [0-100]

8 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  

6.1


PORTUGAL AS  A  NEARSHORE   OUTSOURCING  DESTINATION     Domain:  Competences  

  Significant progress on the flexibility of the labour laws and on incentives for job creation.

9 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Domain: Competences   3.75

4.25

4.69

4.83

RO

ES

PL

CZ

96th

88th

79th

The Global Competitiveness Report 2014-2015 144 Countries (1)

HU

ES

Availability of Scientists & Engineers

62th

Labour Regulations

IMD World Competitiveness Yearbook 2014 60 Countries; Ranking [Index from 0;10]

Quality of Education System

Country

Infrastructures

IMD World Competitiveness Yearbook 2014 60 Countries; Ranking [0;10]

Competences

Costs

English Proficiency TOEFL (IBT) TOEFL 2013 Score [0;120]

IMD World Competitiveness Yearbook 2014; 60 Countries

HU

IE

77th

40th

5th

CZ PL

CZ

ES

PT IE

55th

15th

11st

8th

56th

CZ CZ

IE

ES

PT

3.05

3.08

5.04

5.31

6.73

6.82

7.17

ES

HU

IE

CZ CZ

RO

PL

PT

89

90

92

95

96

ES

PL

The Global Competitiveness Report 2014-2015 144 Countries (1)

(1)  No data available for Romania;

6.68

HU

Local Availability of Specialized Research & Training Services Public expenditure on education (% of GDP)

6.12

PL

The Global Competitiveness Report 2014-2015 144 Countries (1)

Language skills

4.69 5.14

91

CZ

RO

IE

HU

85th

35th

31st

27th

25th

24th

HU

ES

CZ PL

CZ

IE

PT

3.0

4.5

4.8

5.2

5.5

4.8

5.7

RO RO

ES

CZ

IE

PL PL

HU

PT

10 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


PORTUGAL AS  A  NEARSHORE   OUTSOURCING  DESTINATION     Domain:  Costs     Reduction in unit labor costs equate Portugal to Eastern European countries;       Increased tax burden is offset by the demand for efficiency or reduction in operating margins;       However, Corporate Tax may be further decreased in 2015. 11  |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Domain: Costs   Total Tax Revenue (% of GDP)

39.30

34.90

35.00

33.60

32.50

30.20

28.50

CZ

ES

PL

IE

RO

51st

56th

57th

60th

64th

IE

CZ

RO

HU

PL

12.4

8.7

0.5

0.1

-5.1

-5.2

CZ

ES

IE

PL

32.66

29.19

19.91

9.51

HU

Eurostat, 2012

Cost of Hotels

The Hotel Price Index™ Review of global hotel prices: January - December 2013; 68 Cities (1)

Country

Infrastructures

Labour Costs per hour (in €)

Costs

IMD World Competitiveness Yearbook 2013; 60 Countries

Cost of Living

IMD World Competitiveness Yearbook 2014 60 Countries (1)

Labour Compensation per Unit Labour Input (1)  Priciest come last in the ranking/index. (2)  No data available for Romania.

OECD System of Unit Labour Cost 2012 (growth rate) 30 Countries (2)

46th

ES

Whole Economy, excl. Agriculture and Pub. Adm. (costs include wage + non-wage – subsidies) (% Change 2013/2008) Eurostat, March 2014 (2)

Cost of Telecommunications Competences

44th

33.91

34.76

HU

IE

CZ

HU

ES

PT

PL

RO

38th

31th

29th

18th

11th

7th

4th

IE

CZ

ES

PT

HU

PL

RO

8.0

5.8

2.8

0.4

0.2

-0.2

PL

HU

CZ

ES

IE

PT

12 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Conclusions

1        2  

•  Portuguese companies are ‘going abroad’ focusing on external markets and exports;

•  Increased job function competitiveness as a result of Country

Infrastructures

i) labour flexibility and ii) reduction in wages and ‘extra hours’ compensation, along with iii) national grants and incentives for creating new jobs;

•  Forecasted relief of personal and corporate tax burden will encourage more economic activity and foreign Competences

Costs

Custos

investment; •  Portuguese Public Administration’s adoption of Outsourcing models and solutions is still below EU average. This is a challenge for local service providers which may lack the required critical mass to get into large operations. However, positive signs are being observed as it is starting to implement operational models like Shared Services for specific Central and Local Government functions.

13 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Conclusions

Country

Infrastructures

Competences

Costs

Custos

1            2  

On the past 5 years, Portugal has been recognized by Gartner as one of the 13 World’s Developed Countries with more potential to ‘perform’ as an ICT services platform. This is regarding both the perspective of providing transnational services from Portugal and, the location perspective to invest and establish Shared Services and Competence Centers.

14 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


CONCLUSIONS Future  Challenges   •  Portugal’s competitiveness as a viable nearshore location for IT based outsourcing operations has increased in the past 3 years; •  The skills of the talent base outperform the arguments of offshore destinations. This is particularly true for knowledge based processes due to a extremely low turnover rate. 15  |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  


Associação Portugal  Outsourcing   www.portugaloutsourcing.pt     General  Secretary  -­‐  Guilherme  Ramos  Pereira   guilherme.ramos.pereira@portugaloutsourcing.pt   T:  (351)  926  621  975  

      “Portugal  as  a  Nearshore  Outsourcing  Des4na4on”,  2015  Edi&on           in  associaGon  with  

16 |   Portugal  as  a  Nearshore  Outsourcing  Des&na&on  

Profile for Julio Boim Esteves

Portugal as a nearshore outsourcing destination  

PORTUGAL AS A NEARSHORE OUTSOURCING DESTINATION 2015 EDITION Portugal Outsourcing

Portugal as a nearshore outsourcing destination  

PORTUGAL AS A NEARSHORE OUTSOURCING DESTINATION 2015 EDITION Portugal Outsourcing

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