Why does Portugal grow above average?
In the debate on economic growth, it is important to look at economic policy options and try to understand their impact on GDP, but also their influence on the evolution of competitiveness factors.
We only analyze proposals that tend to create conditions for sustained growth. Of these, I highlight three: 1) the effort around the capitalization of companies; two) the increase in R&D expenditure in GDP; 3) the dynamization of entrepreneurship.
Since 2016, with the Capitalize Program, the country took off privately for the necessary capitalization of companies. A path that has not yet ended and which, in this legislature, must be strengthened and consolidated through the use of means of an unprecedented size, in the order of 1300 million euros and which will be managed by Banco Português de Fomento. Public policies to capitalize Portuguese companies are impeded for economic growth because only in this way can leaps in private investment become feasible. But also, only with companies with financial autonomy is it possible to use the full and accelerated means of the Multiannual Financial Framework 2030 or the PRR. The private investment records that took place between 2016 and 2019 are the result of clear options in terms of using the PT2020, but also of attractive Foreign Direct Investment measures, where targeted taxation can be generated, as well as investment tax reserves that positively discriminate as investing companies. But, it’s not enough!
The sustainability of economic growth depends on productivity. And this one has two essential pillars: R&D and options.
In the past there have been increases in productivity due to a reduction in incidents and/or unemployment. This model does not provide any guarantee of sustainability and, above all, does not combat inequalities and poverty.
“More than 150 incubators and accelerators that generated thousands of startups and made Portugal champion in unicorns.”
Since 2016, the country has once again focused on increasing expenditure on R&D and, therefore, on boosting innovation. It was possible to recover the fall – the largest in Europe at the time – in R&D expenditure, placing Portugal in 2019 among the countries with strong innovation, therefore at the forefront. This recovery has taken place, but we are still far from the 3% of GDP spent on R&D that should be our target.
Even more. In order for the effects of expenditure on R&D to be felt in the country’s competitiveness, it is very important to shift the weight of R&D from universities and public laboratories to companies. Direct incentives for companies to innovate and programs such as mobilizing agendas or SIFIDE, for example, are decisive instruments for this process.
Another aspect of this triangle is the promotion of entrepreneurship. Portugal stands out in this theme. More than 150 incubators and accelerators that generated thousands of beginners and Portugal became champion in unicorns: there are 7 worth 38,000 million euros, almost 20% of GDP and 70,000 jobs.
This entrepreneurial dynamism also did not occur by chance. Public policies since 2016 have focused attention on encouraging the creation of new companies. The Web Summit is just the visible part of a unique journey. But the public measures were many and with many means. O Consolidate Programrecently launched and which involved more than 30 of the 65 venture capitals in Portugal and which contemplates 500 million euros demonstrates this.
Maintaining this dynamism is a challenge for the country, because an ecological entrepreneur attracts new businesses, retains young people and creates wealth and employment.
Vice-President of the PS Parliamentary Group