Portugal, an ecosystem in incubation seen from Barcelona

Innovation in the world is played in a league of cities. It's about attracting and empowering talent where it can best develop. Where one can best live and work. There are many beautiful places in the world, but there are not so many where one can live and work well. And there are even fewer where it is possible to live well and work in strategic and high value-added sectors, such as technology. A few cities in the world compete to be well-positioned in these rankings of tech cities: in Europe, in the top positions, we find examples ---and this is only an alphabetical order--- such as Amsterdam, Barcelona, Berlin, Lisbon, London, Madrid, or Paris.

Precisely, next week, Lisbon will be the world capital of digital entrepreneurship thanks to the Web Summit. The epicenter of the event will be on a stage where the Back Street Boys performed fifteen days ago. It's no coincidence: this is about show business. The Web Summit is organized by an Irish company, and it was held in Dublin until the Portuguese government deployed its best weapons (competing with London, Paris, and Berlin) to bring the event to Lisbon, where it has been held since 2016. That was the year the Portuguese Government launched a very ambitious commitment to innovation that has already begun to bear fruit: now Lisbon boasts that it is already home to 7 unicorns.

In the coming days, we will hear a lot about the digital economy from Lisbon. During the three days of the Web Summit, 70,000 people from all over the world will flood the venue and surely the cobblestone streets of the city's central and most cool neighborhoods. 2,500 journalists, 1,200 investors, 900 speakers will meet, and 2,300 startups will participate. The event has an annual budget of 30 million euros, of which 11 million come directly from the public budget. The Web Summit is a long-term commitment: the contract to be held in Lisbon lasts until 2028.

Last week I had the opportunity to prospect the ecosystem of Portugal, hand in hand with a mission organized by the general directorate of Innovació i Emprenedoria of the Generalitat, and which has had the participation of Tech Barcelona and other innovation agents from the country, from university, territorial and sectoral fields. For four days in Lisbon, Porto and Aveiro, we have learned about public and private initiatives to promote entrepreneurship, entrepreneurs and digital nomads, innovation projects, municipal officials of smart cities, universities, business incubators and coworking spaces. Having a global vision and international interconnection is key to strengthening our ecosystem.

In Portugal, the good vibes of the new economy are palpable everywhere, and the Web Summit is the icing on the cake. But a cake that is still half-baked.

Speaking with a group of Portuguese investors who are well acquainted with what they call the Iberian market, they recognize that their ecosystem is 4 or 5 years behind the Spanish one, in terms of the maturity of entrepreneurs or available capital. But they have a lot of faith in their bright future. Many resources are dedicated and everything goes very fast. Investors, entrepreneurs, the institutions themselves, talk above all about quality of life, about the waves that delight surfers, and about the Government's facilities to attract talent, startups and international corporations: tax reductions, ease of hiring foreigners, special visas for entrepreneurs and digital nomads.

Lisbon has set out to become the world's largest community in scale ups in three years, and an example is that they have started by creating the place to put them. The Beato Creative Hub is an old military area of 35,000 m² on the banks of the Tagus that is being rehabilitated to be a large innovation complex. There are 18 industrial buildings that the Government and the City Council have made available to private companies so that they can rehabilitate them in exchange for not paying rent for many years. Among others, Factory (Berlin), the Suprebock brewery, the Startup Lisboa incubator and a coliving space will be installed there. For now, everything is still under construction.

Everywhere we are told that to create this new mental framework based on innovation, it is essential to start with education and training, because Portugal is not precisely a country with an entrepreneurial and risk-taking culture. They have also started working on this.

Near Cascais, next to an old military castle and right on the beach, the Nova University campus has just opened, with its Business & Economics School. Spectacular falls short. A top American private university would not have better facilities. But this university is public, although completely financed by private entities (from Santander to Pingo supermarkets or the Haddad Foundation). "We are an experiment," they say. They offer degrees, master's, and executive programs; 65% of the students are international (Germans and Italians the most). On campus, everything seems perfect, students studying in silence at their desks, a piano with a spontaneous pianist in a common area, light streams in, and from everywhere you can contemplate views of the immensity of the ocean. It really makes you want to stay and study anything.

In the north of the country, Porto has a good technological university, certain industry, and the city council is also making an effort to be a leader in innovation. The creation of technological startups is encouraged, whether agrotech or blockchain to improve mobility or the relationship of citizens with the public sector.

The winds of transformation have also reached Aveiro, another small coastal city that has reinvented itself as a smart city that wants to be a testbed for new technologies. An example is the electric gondolas that cruise through the canals and the estuary and aim to set the path for sustainable transformation for Venice or Amsterdam.

Portugal's economy has a connection to agriculture and the sea that inevitably must translate into innovations in agrotech, blue economy, and turistech, sustainability, and energy. Currently, Lisbon's ecosystem does not yet have a great specialization in specific sectors or technologies; there is hardly any talk of deep tech or biotechnology. For now, the attraction of international talent and projects has more to do with surfing and taxes.

The economy of Portugal has a link with agriculture and the sea that inevitably must translate into innovations in agrotech, blue economy and turistech, sustainability and energy

Everything seems perfect in this bet on model transformation. But there are also entrepreneurs who complain that in Portugal there is no risk culture and that companies do not invest, that they find it difficult to access financing, that it is difficult for them to communicate with the Administration. There are also skeptical entrepreneurs, who say that Web Summit is not for them, but believe that the country needs a lot of talent and that everything that is done to attract it is welcome. Gentrification is starting to appear in the central neighborhoods of Lisbon. And there are also critical voices. A senior executive of an international R&D center in telecommunications expresses his fear: "In five years there may be no Portuguese companies left. International companies capture all the talent, because it is cheaper for them here, and local ones cannot compete."

There is a middle ground between the fireworks surrounding the obsession with achieving unicorns, and the fear of those who still remember that Portugal was one of the four PIGS of the 2008 crisis (the weakest countries during the Great Recession: Portugal, Italy, Greece, Spain). There is a country that has decided to focus its strategy on innovation. And it involves city councils, universities, private companies and European funds. And it attracts foreign capital and talent.

There is a country that has decided to focus its strategy on innovation. And it involves city councils, universities, private companies, European funds. And it attracts foreign capital and talent

Portugal is a very small market, of 10 million people, and no startup is born without already having a vision beyond its own country, whether towards Europe, Brazil or the United States. It seems that they know where they want to go, and they are pressing hard on the accelerator. Some are already saying that Portugal can surpass Estonia as a technological tiger.

Meanwhile, in Barcelona, ​​it seems we are starting to be clear that we want to be the place to be when it comes to digital and technological economy in Southern Europe. We already are for many international corporations, and we have a good base of startups local and international. We have a city with an unbeatable quality of life, a powerful technological infrastructure, universities and research centers, sectors with a powerful industry (health, tourism, commerce, logistics, food). We have local and international talent and several generations of repeat entrepreneurs. We have more and more global and deep tech projects. We have an ecosystem in an acceleration phase, which is coming out of adolescence and can now begin to take the measure of adult life.

We are missing some improvements, at a bureaucratic and fiscal level, it is true. But above all, we need to finish believing it. That everyone who needs to believe it believes it and that we all row in the same direction. We cannot fall asleep, because in this race we are not alone, and we have competitors, like the Portuguese, who may still be in the incubator, but they know very well what they want and are going very fast.