a world to explore – The Economic Journal

The Portuguese and Portuguese companies have never limited their action to national borders and have always adopted an outward-looking approach. This should be, more and more, a growth premise for Portuguese entrepreneurs.

Recognizing that exports are and should be a key pillar in the growth and sustainability of the national economy, the truth is that they are slowing down (10% in 2017 vs. 5.3% in 2018) with the additional challenge of growth expectations of our main destinations (Spain, France, Germany, UK and USA, which together represent 60.8% of our exports in 2018) are being revised downwards.

It is essential to widen our horizons, considering less traditional regions, but with enormous potential, such as the Southeast Asia Region (ASEAN1).

With a population of about 640 million and mostly young (84.9% under 55) and an emerging middle class (per capita income with an annual average growth of 4% since 2009 and currently with average levels of literacy above 95%) presents a set of arguments of high interest to position itself as a relevant export destination for Portugal.

Of course, when it comes to a region composed of 10 countries, it concentrates different realities on its own, so it is important to know its specificities. Take Vietnam as an example.

With a population of approximately 93 million, extremely young (85.3% under 55), an emerging middle class (per capita income with an annual average growth of 9% since 2009, a rate that is predicted stable at least until 2022). (imports have increased by 17.6% since April 2018, exceeding USD 20.5 billion, largely due to EVFTA2 – one of the most ambitious free trade agreements between the European Union and an emerging economy), Vietnam is highly privileged about quality, and this may be one of the strongest factors for our entry.

Of course each 'business / destination' combination should define its own approach, the 'one size fits all' concept will most likely be a step to failure, not least because export earnings from the past no longer work and have to be reshaped.

Roland Berger recently supported a large national group to assess the potential of this market as well as to define its entry strategy, which aims to highlight a set of 7 critical aspects: i) thinking about a medium-term minimum horizon (~ 5 years ); (ii) assess the potential of the market in an evolutionary perspective (2 to 5 years); iii) understand the market structure and competitive environment not only through desk research but through interviews with key stakeholders; iv) analyze the value chain to be addressed and define clearly how it may be relevant; v) really know the targets that are intended to address, which presupposes field analysis and conversations with their own; vi) join forces with partners and entities that have common ambitions in Portugal and vii) establish a partnership with a local player that adds value to the "details" that really matter.

If Portuguese businessmen want to continue to grow, it is essential to find new avenues of evolution, in which export, of course, should take a leading role, and preferably explore less obvious options, especially if they are to achieve growth levels with materiality and prospects medium-term.

For this to happen, one must begin to broaden the horizons, evaluate the momentum of the company and the destination and define the best way to approach the market.

It would be very interesting in a period of five years to find a top 10 of exports different from the current one, especially if this new mix transmitted perspectives of a bigger growth and a lower risk of concentration.

1) ASEAN – Association of Southeast Asian Nations

2) EVFTA – EU-Vietnam Free Trade Agreement

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