Changing Innovation & Growth Paradigms in Portugal, Daniel ... · Zero to One: Notes on Startups, or How to Build the Future. Bureaucratic hierarchies move slowly, and entrenched

CHANGING INNOVATION & GROWTH PARADIGMSIN PORTUGAL

DANIEL TRAÇAJANUARY 2019

PRODUCTIVITY REMAINS “THE CHALLENGE”

2

Source: AMECO and IMF, 2010.

Value of Labour Productivity, 2000(thousands of euros per worker)

Gro

wth

ofLa

bour

Pro

duct

ivity

, 200

0-20

10(%

)

1,10%

3,77% 1,73% 1,74%

0,98% 0,98%0,69%

-0,29%-0,04%

1,88%

0,08%

2,37%

-0,09% -0,68%

-2,21%

2,44%

1980-84 1985-89 1990-94 1995-99 2000-04 2005-09 2010-14 2015-17

Productivity (GDP/Labour) Labour (ELF)

Source: Banco de Portugal, 2019.

Productivity Convergence in the EUContribution to Growth:

Productivity And Employment

Human

Capital

Digital Transformation

Internationalization

3

Investment

QUALIFICATIONS AND SKILLS PORTUGAL

4

Source: Eurostat, 2019

Evolution of education levels

PISA scores

Source: OECD, 2019Source: EIB, 2019

ADULT EDUCATION IN PORTUGAL

5

Source: OECD, 2019

A long way to go…Education attainment of adults (25-64 year-olds) in Portugal, 2016

but catching upParticipation rate (last 12 months), by type of education and training

Challenges• Technical Skills and Skills of the Future in Higher Education

• Retraining of Adults for Digital Challenges• Funding and Institutions

6

PORTUGAL SLOWLY CATCHING UP ON INTERNATIONALIZATION

3,04%

6,53%

3,70%

10,85%

12,03%

5,68%

3,73%

5,09%

3,86%

5,71%

2 0 0 2 - 2 0 0 9 2 0 1 0 - 2 0 1 7

CAGR OF TOTAL G&S EX PORTS , BY COUNTRY

Portugal Ireland Czech Republic Germany EU

1,55%

5,73%5,81%

8,39%

1,81%

10,36%

2 0 0 2 - 2 0 0 9 2 0 1 0 - 2 0 1 7

CAGR OF EX PORTS BY TYPE, I N PORTUGAL

Total de Bens Total de Serviços Viagens e Turismo

7Source: Eurostat, 2019.

BUT PICKING UP PACE

8Source: EIB, 2019

FRIMS INVESTING ABROAD

GLOBALIZATION TO ASIA WILL CONTINUE

Source: The World in 2050, PwC, Feb 2017

Sources: Banco de Portugal, 201912

0.4%

0.3% 0.3%

0.3%

0.4% 0.4% 0.4% 0.4%0.4%

0.4%

2481,31

1237,371451,74

1934,42

2627,97 2717,26 2792,392994,19 2945,32

3518,53

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0

500

1000

1500

2000

2500

3000

3500

4000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Exports to Asia1996-2016 (in millions of euros and in % of total)

Exports of G&S to Asia (% total) Exports of G&S to Asia (M€)

PORTUGAL TOO SLOW IN ASIA

10

Challenges• Collaboration among firms

• Investment and lead time in Internationalization

• Economic Diplomacy

11

Gro

wth

Data Availability

Computing Power

Efficient Algorithms

Years to gain 50 million users

Source: The Intelligence Revolution | The Future of work is Here, Deloitte Canada

DIGITAL TECHNOLOGY IS EXPONENTIAL

If the rate of change on the outside exceeds the rate of change in the inside, the end is near.Jack Welch

Accenture, 2018

… AND DISRUPTIVE

Source: INE, 2019

PORTUGAL LAGGING

14

1 533 M€(2017)

1 207 M€(2005)

1 000

1 100

1 200

1 300

1 400

1 500

1 600

1 700

1 800

1 900

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

Evolution of private investment (GFCF) in ICT in Portugal (M€)

304

246

123

111

59

58

45

33

29

26

25

19

14

9

4

3

2

0

0 50 100 150 200 250 300 350

Israel

USA

Sweden

Ireland

United Kingdom

Finland

France

Denmark

Norway

Germany

Netherlands

Belgium

Spain

Austria

Portugal

Italy

Russia

Turkey

Capital Stock in ICT ($) per capita

Source: State of European Tech, 2017

Challenges• Leadership and Culture

• Investment in Intangibles

• Digital jobs

• Speed and Stakeholder Partnerships

15

Peter ThielZero to One: Notes on Startups, or How to Build the Future

Bureaucratic hierarchies move slowly, and entrenched interests shy away from risk. In the most dysfunctional organizations, signaling that work is being done becomes a better strategy for career advancement than actually doing work (if this describes your company, you should quit now).

Chief Innovation OfficerImprove!

Chief Disruption OfficerChallenge!

Disrupt or get disrupted!

LEADERSHIP and CULTURE

AGILITY IS CULTURE “Give employees slightly more freedom and empowerment than you are comfortable with.

If you are not, you haven’t given them enough.”

Laszlo BockFormer SVP People Operations, Google

LEADERSHIP and CULTURE

THE INVESTMENT SLUMP

18

Investment (GFCF) in Portugal

20%

Source: EIB, 2019

LONG-TERM BARRIERS TO INVESTMENT

19Source: EIB, 2019

ACCESS TO FINANCEType of External Finance used for Investment

20Source: EIB, 2019

ACCESS TO FINANCEDissatisfaction with External Finance

21Base: All firms who used external finance in the last financial year (excluding don’t know/refused responses) Q. How satisfied or dissatisfied are you with ....?

Source: EIB, 2019

13%

10%

6%

5%

7%

9%

11%

13%

15%

17%

19%

21%

23%

2009 2010 2011 2012 2013 2014 2015 2016

Evolution of credit to non-financial companies (% GDP)

by firm size

Source: Banco de Portugal, 2018

Large firms

Micro firmsSmall firms

Medium firms

#1 Road to productivity

#3 Internationalizeand leverage Asia

#6 Access to Finance

#4 Foster digitalization

INNOVATE FOR GROWTH

#8 Agile, Leadership

#2 Continue to build up skills

#7 Context Challenges rule

#5 Convergenceof Stakeholders

CHANGING INNOVATION & GROWTH PARADIGMSIN PORTUGAL

DANIEL TRAÇAJANUARY 2019