Portugal Economy
The Portuguese economy has struggled to adapt to global markets during the last fifty years. Beginning in the 1970s, Portugal has experienced a steady downturn economically. This has been made obvious by comparison with the economic expansion experienced during the 1960s. The Carnation Revolution in 1974 ended a period of growth and prosperity. Traditional industries were thrown into confusion. Not until the 1990s was there a slow change for the better. The Portuguese began to switch from consumption to export. This is a measure of economic health. Portugal is a bit of a mystery when compared to other Western European countries. It has high scores in quality of life yet the lowest gross domestic product per person.
Economic Changes
Quickly rising unemployment rates have forced a change on the Portuguese. This change resulted in the development of the high-tech sector of the Portuguese economy. Traditional industries are being over-taken by the quickly growing business services industry. Portugal is the world’s largest cork supplier. The business services sector has even surpassed cork. Business service providers offer state-of-the-art, web-based business software, including credit card processing, payroll management, custom software, etc. The applications are as broad as the market place today. They offer everything from single use software, like credit processing, to over-all business management, like a custom-built small business database.
Business service is one of the largest growing industries worldwide. Portugal is beginning to take advantage of a growing market. Unfortunately, this industry growth has not been enough to fight record highs in unemployment. The unemployment rate reached 10.2% in December of 2009. The steady increase shows no sign of stopping. This was after a 65% increase in unemployment from 2002-2007. The underdeveloped educational system plays a role in the continuing unemployment problem. The Business services industry requires high educational standards to maintain productivity. sia and Central Europe are able to offer similar services for less money.
Steady Growth
However, there are positive signs in other areas of the economy. While the unemployment rate remains high, many industries are maintaining and some are expected to grow in the next few years. The hoped for growth of the tourism industry may help reduce unemployment numbers. Traditional industries like cloth, footwear, wood products and beverages have become stable. A revamp of the public sector may help with economic growth. Currently, it loses millions of euros each year due to inefficiency and overstaffing.