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Portugal – an example of IT talent in Europe

Portugal occupies, in geographical terms, a position of excellence for nearshoring hiring in information technologies (IT). Add to that the excellence and open mindset of the Portuguese talent. This unique combination puts the country at the center of the map in Europe.

In this time of continuous disruption and accelerating innovation, more and more companies are looking for partners in countries with geographical proximity to reach efficiency gains and speed in business extension. This is where Portugal stands out on the European map as an attractive location for nearshoring in information technology. Besides the beaches, tourist spots, and pleasant quality of life that already attract visitors from all over the world, Portugal (and Lisbon in particular) has been establishing itself as a location of choice for start-up and innovation hubs, and in the field of innovation and information technology.

As IT nearshoring is an outsourcing model where an organization hires IT services from a provider located in a nearby or geographically close country, it makes perfect sense for companies operating in Europe to look at companies in Portugal as potential partners in this area.

Hiring IT services in a nearby country allows you to achieve considerable cost efficiencies, while overcoming some of the common barriers associated with offshore outsourcing in distant countries (such as cultural differences, disparate time zones, or difficulties with communication and collaboration in project management).

IT nearshoring in Portugal brings several advantages for companies present in Europe, such as:

Geographic and cultural proximity. 

Portugal is located in Western Europe, which allows easy communication and collaboration with other European countries. In addition, cultural proximity and similar time zones facilitate interaction and business alignment.

Quality of labor force. 

Portugal is recognized for having a qualified and highly educated workforce in IT-related areas. Portuguese universities have quality academic programs in computer science, engineering and related fields, providing a solid foundation for future IT professionals.

Language proficiency. 

IT professionals in Portugal are familiar with the English language, which facilitates communication with international clients and partners. And many have training in other languages, such as Spanish, French or German.

Competitive costs. 

Although Portugal is not considered a low-cost destination compared to some Eastern European or Asian countries, it still provides an appealing cost-benefit ratio for companies looking to hire quality IT services. Operating and salary costs in Portugal are generally lower than in many central and northern European countries.

Favorable business environment. 

Portugal has invested in developing a favorable business environment to attract technology companies. The Portuguese government has implemented policies that promote innovation, entrepreneurship and investment in IT, with tax incentives and support programs for technology companies.

Technological infrastructure. 

Portugal has a solid technological infrastructure, with high-speed internet and wide network coverage – essential to ensure adequate connection and performance in IT operations.

For industry, there are significant advantages to using IT nearshoring, as companies that are very focused on efficiencies and innovation are able to access a broader pool of skilled IT professionals, counteracting talent shortages in this area, while keeping their business structures flexible and agile. This solution enables companies to respond more quickly to changes in their business requirements and IT operations, and even ensure that their IT projects are compliant with relevant European laws and regulations.

Also noteworthy as a critical success factor is that IT nearshoring in Portugal can help mitigate cultural barriers. Portuguese talent has not only excellent foreign language skills but also a great aptitude for communicating and collaborating with teams from different cultures. Both the cultural proximity and the work ethic of the Portuguese talent ensure that teams function more smoothly and efficiently, and contribute to reducing miscommunication, improving the quality of work and minimizing risks with easier supervision, in addition to the possibility of regular visits to the partner’s facilities.

Within the initiative Meet Portugal’s Best 2023the German-Portuguese Chamber of Commerce and Industry (CCILA) is fostering partnerships between German industry companies and Portuguese companies for IT Nearshoring in Portugal, surely a safe bet for companies in Austria, Germany, Switzerland and Europe. Initiatives of this kind are a great opportunity to support potential interested parties in their research, who want to take full advantage of this unique combination of factors when choosing a partner to move forward with IT nearshoring in Portugal.

Why is Nearshoring growing in Portugal?

Nearshore services have increased over time in Portugal, and we are here to explain why. IT Nearshore in Portugal is on the rise and the pandemic Covid-19 didn’t slow it down. 
With remote work becoming the norm nowadays worldwide, the IT sector becomes a vibrant industry to look at. 

Many of you have known Portugal from being the (sunny) capital chosen to host Web Summit for several years in a row. But Portugal is more than that. Portugal’s economy is growing robustly above the European Union average and the appealing conditions of cost-efficient skilled labor and transparency in legal matters are some of the many factors to consider.

Portugal has been recognized as a leading tech environment where excellence meets innovation, engaging top-rated technological and entrepreneurial companies like Google, Siemens and Microsoft.

Time-zone compatibility and our prime location deserves full consideration, given the close proximity (being 1 hour difference) to Central European Time and considering that it is the nearest European country to the US and Canada). 

Moreover, effective communication is key to effective nearshoring, and Portugal holds the title of being the world’s seventh-highest non-native English proficiency, perfectly suiting this service model.

On top of that, according to the OECD ranking in 2020, Portugal presents the 2nd highest rate of new engineer graduates in Europe, offering a large talent hub at a competitive quality/price ratio compared to other markets. 

Portugal is a must for all companies that need to operate across digital spectrums in which flexibility and adaptability are compelling non-negotiables. 

LBC Nearshore is focused on web development and process automation, based on a customized approach of the whole service cycle – diagnosis, solution design and solution implementation. If you want to know more, contact us at nearshore@lbc-global.com