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Home > Business Areas > Services & Trade > Sector Overview
 
Sector Overview
 
 
Guilherme Costa Kindly written by
Prof. Guilherme Costa
Former Chairman of ICEP
the Investment, Trade and Tourism Office of Portugal
 
     
  An open economy for international trade and foreign investment  
     
 

In line with the growth characteristically experienced by developed countries, the Portuguese economy has become more services-oriented in recent years.

Far more important than the growth in the Product and Employment structure are entrepreneurial behaviors in those sub-sectors of Services that are relevant because of their contribution to the modernization of the Portuguese economy.

As far as Banks, Telecommunications, Distribution, Transportation and Tourism are concerned, an increasing number of companies have shown a capacity to face up to the competitiveness of the European market and the globalization challenge in other markets.

Banks and other Financial Services have benefited from a favorable conjuncture, expanding through reorganization. All public banks, therefore, have been privatized, except for the Caixa Geral de Depósitos Group. As a consequence of these privatizations, acquisitions, mergers and profound internal restructuring, on the one hand, and several international strategic alliances, on the other, modern financial groups have emerged. These groups are capable of innovating products and processes (for example, the Portuguese ATM network) and organizing their presence in international financial markets (through the acquisition of financial institutions - recently in Spain and Brazil - or the establishment of branches in foreign countries, mainly in the investment banking sector, frequently as joint ventures). Under these conditions, Portuguese Banking has been preparing for an active role in the European financial system, driven by the euro.

We are also experiencing an important move toward modernization in other sectors, where major public companies underwent progressive privatization. On the one hand, this upgrade is based on requalifying human resources capacities and restructuring manpower, while innovating techniques and procedures. On the other hand, it is underpinned by strategic international alliances. As a result, we are now ready to successfully join large operator networks, based on a sustained growth of productivity and profitability.

A change has also occurred in the Construction and Distribution areas, dominated as they are by private companies. In some cases, this is worked through internal expansion, while in others, though acquisitions and mergers. Simultaneously, the concerted effort made to get established in external markets (with important positioning in Africa, Eastern Europe or Brazil) is proof of the growth and modernization capacity of the largest companies in these sectors.

These enterprises are followed by a set of smaller companies, which occupy niches in the internal market or in specific selected markets. Such companies are either in the same sectors or related services, such as business consulting, engineering services, data base or audio-visual. All examples of those that have succeeded in redefining a strategy and organization for international competitive capacity.

As to the Hotels and the Food & Beverage sectors, in recent years we have seen an increasing growth and a relevant improvement in terms of quality. This has come about due to the appearance of more tourism business, contributed to not only by foreign visitors but Portuguese nationals too. This greater interest in tourism may well be the outcome of an increase in real disposable income in recent years.

The Tourism sector accounts for 8% of GDP and directly employs around 6% of the working population. The potentiality of the sector is great, in view of the fact that it already boasts a consolidated image as a tourist destination. In addition, Portugal is known for the quality of its natural-beauty resources and as an established tourist product. It is also highly thought of because of its professionally trained and qualified human resources, allied to the fact that it is recognized as a place to vacation safely.

Portugal does not disdain the very good geographical position nature has granted it and firmly grasps the possibilities, inherent in its natural vocation, to develop it as a tourist's favorite leisure spot.

Marketing policies and development of the offer will mean having to undergo a substantial change in trying to improve Portugal's competitive goals as a tourist destination.

Portugal has an open economy, not only as far as Tourism is concerned, but also in terms of international trade and foreign investment.

Portuguese international trade has, in particular, contributed substantially to the country's economic growth. During the past 10 years, the degree of openness in the economy has been significant, accounting for between 60 and 70% of GDP.

This situation leads us to analyze the changes that have occurred in the services' major sub-sector - trading. This sector is essentially woven into a corporate fabric, strongly marked by manifold and mutating characteristics visible over the past decade. Structural transformations have been implemented at a brisk and intense pace. It is true to say that, whether we are talking about the development of new types of distribution approaches and entrepreneurial cooperation, or about the introduction of new technologies.

With regard to transportation and access utilities, current policy entails various branches of transportation - especially land and sea. Government moves in this area are focused on developing an integrated and sustainable policy, supporting the logistics of such a globally integrated trade.

Finally, Government Services also face the need to contribute to this important restructuring of the economy. This effort is particularly obvious in specialized institutions - such as ICEP and IAPMEI - called upon to support the endeavor of Portuguese and foreign companies in terms of innovation and globalization

 
     
     
  The main business areas in this sector:  
 
  • Airlines
  • Logistics
  • Banking
  • Mail Services
  • Casinos
  • Real-Estate
  • Environmental Requalification
  • Roadway Infrastructures & Services
  • Exporters/manufacturers of garments
  • Services to Enterprises
  • Golf Courses
  • Software
  • Hotels
  • Telecommunications
  • Institutions
  • Tourism
  • Insurance
  • Transports & Distribution
  • Venture Capital & Financial Services
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