Information Technology landscape in PORTUGAL

Computer Hardware and Software

Size of domestic hardware production: nmf. Domestic production is mainly in support of telecommunications services and equipment for export and domestic usage. Portugal's telecommunications trade balance is consistently negative, with Portuguese telecommunications equipment exports serving the EU (especially Germany) and Portuguese speaking African countries (Angola and Mozambique) predominantly. Main providers to the Portuguese market include Siemens Nixdorf, Alcatel, Motorola, Nokia, Ericsson, Cisco and Newbridge Networks.


Size of domestic software production:4 Imports play a significant role in the Portuguese software market. Seventy-five percent of the Portuguese software market is served by American firms, either operating in Portugal via distributors or subsidiaries, or by American firms operating in Europe and trademarking software to American-Portuguese joint ventures. Imports from Germany, Japan and the UK also serve the Portuguese market for computer software.

Scale of the Portuguese Software Market as of 1996:

• $240 million total
• $158 million domestic production
• $180 million imported
• $ 98 million exported

Software Suppliers to the Portuguese Market:

About 50 Portuguese firms produce computer software and services in Portugal, employing 1289 workers. The top ten worldwide suppliers of software have a presence in Portugal.
Six of these are US companies with branch offices in Portugal: IBM, Microsoft, Computer Associates, Oracle, Novell, and Digital Equipment Corporation
Three are Japanese companies: Fujitsu, NEC and Hitachi
One is German: Siemens Nixdorf

Multimedia Industry:

According to the Educational Multimedia Task Force (see reference 15a) there is no consolidated multimedia industry in the country, but there are a "plethora" of software development SMEs and some research and development centers devoted to multimedia who have also gotten into the area of production. The R&D centers generally produce multimedia titles for education; their financing, either through national or EC programs, result in unfair competition for private software developers.

Major Players in IT sectors:5 Siemens, Samsung, Texas Instruments, Ford, Volkswagen, GM and Portugal Telecom. The automotive industry is a major user of IT in Portugal, and domestic and foreign suppliers support the main automakers throughout the value chain.

• Siemens: has had a presence in Portugal for 90 years, but Portugal Telecom's digitalization efforts has created new opportunities. In 1987, Siemens entered into a joint venture with a local company to manufacture digital switching equipment for the local market and for export. Siemens provides 60% of the digital switching equipment used by Portugal Telecom. It recently contracted with Portugal Telecom to deliver 1 million local lines capable of ISDN for voice, video and data transmission. In addition, Siemens is producing software to operate the digital switching exchanges in Lisbon, in conjunction with Siemens operations in Boca Raton Florida and Munich, Germany, among others.
• Texas Instruments and Samsung, Joint Venture: Texas Instruments (TI) has been manufacturing integrated circuits in Maia, near Porto, since 1973. In 1994, Samsung joined TI, making the Maia plant a joint venture. Samsung added CD-ROM computer memory products to TI's integrated circuit production in order to gain an advantage in the growing EU market. The operation was Samsung's first semiconductor production outside South Korea.
• AutoEuropa: since 1995 is a joint venture between Ford Motors and Volkswagen to build the Ford Galaxy and the Volkswagen Sharan, which are both multi-purpose vehicles (MPVs) that combine the advantages of a passenger car with those of a minivan. Total investment in Portugal exceeds $2.54 billion (the largest foreign investment contribution in Portugal,) which has been used to establish a state-of-the-art plant in Palmela that uses the most advanced technologies in automation and computerized production control.
• Ford Electronica Portuguesa: Manufactures variable scroll air compressors based on the latest technology in air compression for use in automoblile air conditioning units. Ford is investing an additional $230 million in its electronic components plant in Palmela, just south of Lisbon, to meet the growing demand of EU consumers for air-conditioned-equipped automobiles. By the year 2003, Ford estimates that its exports will result in $1.5 billion in sales.
• Delco Remi: is a joint venture between Delphi Automotive Systems and General Motors. Delco manufactures ignition products, sensors and solenoids using a vertical manufacturing base in Portugal's Setubal region. In 1997 it procured an opportunity to produce Anti Skid Braking Systems sensors, as well. Annual production exceeds 4 million units across five production lines for shipment to customers on five continents.
• Portugal Telecom: Please refer to "IT Geographics" for information on PT's IT research efforts.

Marketplace: The Portuguese market for IT has developed around the automotive and telecommunications industries. Portugal is evolving as an attractive location for the manufacture of software and hardware IT, but currently does not offer a robust domestic marketplace relative to those countries known for IT prowess, such as the US, Singapore, India, Ireland, etc. Nevertheless, several prominent software providers exist in Portugal due to its low cost, fairly skilled and hard-working labor, the strategic location of Portugal between northern and southern Europe, its membership in the EU, and its temperate climate.