Nearshore 2.0: How European companies are turning outsourcing into strategic innovation (opinion article at Executive Digest)

By Tomás Santos, Head of International Business at 99x Portugal (original article in Portuguese published at Executive Digest)

For years, when people talked about nearshore or outsourcing, the first thought was almost always the same: cost reduction. Lower rates, larger teams, faster hiring, often with a glaring lack of strategic vision.

However, from my experience, that mindset belongs to the past. Today, European companies face challenges of a very different nature, ones that have forced them to look at this “alternative” through a much more strategic lens. The shortage of digital talent is real, the pressure to innovate is constant, and the need to keep teams aligned and productive has never been greater.

What these companies are looking for is no longer an external supplier. It’s a strategic partner. And that’s exactly where Nearshore 2.0 comes in.

The new nearshore model isn’t about outsourcing activities or filling missing roles. It’s about co-creating solutions, side by side.

Teams are no longer sitting on the other side of the screen waiting for tasks, staring anxiously at a board that dictates their next few days. Those who still work that way risk losing all their talent. Now, teams join the same daily meetings, share the same goals, and contribute to the same vision.

At the company where I work, we see this happen every day. Our clients aren’t just looking for developers; they’re looking for professionals who think, question, and add strategic value. That’s the true transformation of nearshore: moving from a delivery model to a partnership model.

There are three key factors behind the success of Nearshore 2.0. First, the talent shortage isn’t going away, even with AI. Europe doesn’t have enough engineers to meet demand, and nearshore partnerships open the door to experienced teams capable of generating impact from day one.

Second, cultural proximity makes all the difference. Working in the same time zone, sharing similar values, and speaking a common business language makes collaboration smoother and trust more natural.

Finally, flexibility is a true competitive advantage. The ability to scale teams or adjust projects quickly without compromising quality is essential in today’s tech landscape.

It’s no longer about finding the cheapest option but about finding the right partner: a team that genuinely integrates with your company culture and helps you grow faster. As we all know, cheap often turns out to be expensive.

Portugal has consistently positioned itself as one of the most strategic nearshore destinations in Europe. You can see it in the growing number of international companies opening hubs across the country. We have qualified talent, a strong work ethic, excellent communication skills, and a culture that naturally fits with organizations across Central and Northern Europe.

But what truly sets Portuguese teams apart is maturity. Nearshore isn’t just code. It’s collaboration, alignment, and trust. And at the end of the day, that’s what creates value for our clients and delivers real ROI.

The challenge now is to keep evolving and leading through quality, reliability, and long-term commitment, not just price.

When companies treat their nearshore teams as true partners, not as external providers, something changes. They innovate faster, retain talent longer, and create products that genuinely make a difference.

As I recently heard in a keynote: “Outsourcing can’t work if you don’t have the strategic vision internally to make it work.”