Productivity. “Creating wealth in Portugal is urgent”

The diagnosis is known, but the reality remains unchanged. Productivity is one of Portugal’s Achilles heels, whose value is 28% lower than the Euro Zone average. The last decade has been one of decline and the blame, experts say, is shared by everyone: companies, academia and the State. “We have a large proportion of entrepreneurs in Portugal without higher education and the majority without management training. We need good management”, pointed out Ricardo Parreira, CEO of PHC, during the debate “5 Decades of Democracy: How to generate wealth in Portugal”.

The discussion, broadcast on SIC Notícias with support from the Francisco Manuel dos Santos Foundation, was also attended by economist José Alberto Ferreira and Céline Abecassis-Moedas, director of Executive Training at the Catholic University of Lisbon. Discover the main conclusions:

More and better skills

• For the academic, universities have “an essential role” in increasing productivity, namely through investing in worker requalification actions and adapting the skills taught to the needs of companies. “The role between the business and academic world is to work together to make sure that the training we prepare is adequate”;
• This investment, considers José Alberto Ferreira, is essential to ensure that the most qualified generation ever can explore their full potential and, through it, support innovation in companies. If “teammates [de um jovem muito qualificado] they do not have the same type of skills”, the productivity gain for the organization “tends to be much smaller”;
• The PHC leader recognizes that “the Portuguese are, in general, excellent workers”, but are often underutilized and this is largely due to the weak capabilities of managers. “We can, and should, invest more in training our entrepreneurs”, he insists.

Obstacles to competitiveness

• If responsibilities are distributed between companies, academia and the State, the public machine is, for participants in this debate, one of the greatest obstacles to economic growth. “Bureaucracy is, in fact, a problem for companies. It takes more than 250 hours for a small company to lose tax compliance with the State”, explains Ricardo Parreira, who compares it with the numbers recorded in Estonia, where less than 50 hours are needed;
• The person in charge also refers to labor legislation as one of the challenges to be resolved, as “it is very rigid to the point of protecting incompetence”. The consequence, he considers, is to make business growth and rising wages in the country “difficult”. “The minimum wage is a shame”, he emphasizes, while arguing that “creating wealth in Portugal is urgent”;
• Céline Abecassis-Moedas, who has carried out research in the area of ​​the fashion and textile industry, sees industrial policy as a path of potential evolution. “Portugal is a country that already has a very strong industrial tradition, but we know that being Europe’s subcontractor, which is very much the country’s role today, allows it to achieve a certain level of wealth, but not much more”, she analyzes;
• The focus should be, he argues, moving from the stamp made in Portugal to something created and designed in Portugal. “In the last 10 or 20 years, footwear has managed to increasingly position itself as a design and brand industry. We are moving up the value chain, that’s what seems important to me,” he explains;
• For the structural transformation of the economy, community funds from the Recovery and Resilience Plan or Portugal 2030 can be important. However, warns José Alberto Ferreira, success “really depends on the executive capacity” of the State’s bureaucratic machine and this, until now, has not been the case. “At this moment I am optimistic, but with some caution”, says the economist.