Building the Country’s Competitive Advantages

What is it about?

Portugal has a long history of pioneering the application of science and technology to commercial endeavors starting in the fifteenth century when Prince Henry the Navigator created what would later become known as the Sagres School of the Discoveries. Exemplary work on astronomy was pioneered by the Portuguese more than 400 years ago. It was the navigation by the stars that enabled the Portuguese discoveries enterprise to proceed at full speed. Leading astronomers, shipbuilders, and cartographers were challenged to make scientific breakthroughs that laid the technological foundation for the European Age of Discoveries. The astrolabe device and the rudimentary best-guess hand-drawn maps based on ground-truth observation of yesteryear were today’s precursors of our satellites and Global Positioning System (GPS). The astrolabe in particular allowed navigators to measure the distance between the position of the starts in the galaxy and a fixed points on the earth’s surface, such as distance to the coast line and to maintain the direction of navigability in the pursuit of a maritime route to the spices islands. The relationship between the belief in the human will via scientific principles and the desire to contribute to human progress through mercantilism and reciprocal exchange amongst the peoples of the earth motivated the early explorers. Fast forward to the early 1990s and to the attempt to find a more prosperous path for a new era following the Portuguese adhesion to the European Economic Community in 1986. The dual effort to charter an economic development strategy for Portugal and to advance the role of science and technology in the country’s industrial development materialized with Harvard Professor Michael Porter’s 1992 study: “Building Portugal’s Competitive Advantages” and its partial implementation at the turn of the century. In “Community Responsible Innovation in Portugal: Building the Country’s Competitive Advantages,” Carlos Balsas (2022) discusses how the recent history of industry in Portugal has been tangled between letting non-viable, uncompetitive companies collapse while targeting those bolstered by European funds for their “success stories.” The article is a historical account of community innovation in Portugal during the 1990s.

Featured Image

Photo by Portuguese Gravity on Unsplash

Photo by Portuguese Gravity on Unsplash

Why is it important?

It analyses two illustrative case studies: the Portuguese automobile cluster and the AutoEuropa development in Setúbal; and the Portuguese science and technology sector exemplified by the Taguspark – a science and technology park in Oeiras near Lisbon. It is argued that Portuguese industry had to develop strong links and establish viable R&D relationships with science and technology institutions in order to help strengthen the country’s competitive advantages in an increasingly globalized economy. The case study selection was based on the author’s knowledge of the AutoEuropa development, a minivan plant for Ford-Volkswagen, and the Taguspark, a science and technology park located in Oeiras near Lisbon. These two cases enabled the possibility of making a contribution to knowledge in terms of understanding how innovation percolated within one economic cluster, while helping to bolster Lisbon’s territorial advantages by giving emphasis to the relationship between innovation and higher education in a brand-new science and technology park. At a time when the Community Social Responsibility (CSR) paradigm has been extensively utilized in firms’ policies, only occasionally with real results for society as whole, the Community Responsible Innovation (CRI) framework invoked in the paper presents an alternative to simply recognizing the social role of community in science and technology pursuits and extending it to truly responsible innovative pursuits. Balsas (2022) paper offers a cogent and well-articulated analysis of the history of industry and science and technology before the fall of the Portuguese dictatorship and its need for modernization in the decades after the political transition, by ultimately fostering higher competitiveness levels. The paper engages with the literature on science and technological innovation in Europe and the United States in terms of the transition from an emphasis on the availability of the factors of production to the proximity and integration of supply chains and access to regional and global markets in a post-Fordist just-in-time era. On the one hand, the AutoEuropa plant on the southern bank of the Tagus River in the Lisbon Metropolitan Area illustrated the new productive strategy of transnational corporation subsidiaries that ended the “cathedral in the desert” stereotype associated with former inward investment projects in peripheral regions. On the other, the Science and Technology Taguspark has served to expand the science and technology vision to broader concepts such as the “City of Knowledge” and the “Oeiras Valley,” known in the industry as the aspiring Silicon Valley of Portugal. In the conclusion, the paper asks whether the Porter diamond and clusters framework made history given that some of the study’s recommendations were executed while others were simply disregarded by successive governments, which appeared to have based their assessments mostly on distinct political ideologies.

Perspectives

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The Porter study is believed to have allowed a focus on the diamond production factors with only a medium impact on the demand conditions and a relatively low effect on the context for firm strategy and rivalry. Portugal’s inability in accomplishing the proposed goals resulted partly from the fact that investments in competitiveness do take time to produce results, and may even only occur in the medium to long term. This does not invalidate the Porterian guidance nor its applicability to small and peripheral economies, such as the Portuguese, as a cluster approach to industrial re-industrialization is ensuing at the European level, with smart specialization strategies and the pursuit of core clusters by the European Cluster Observatory exemplifies.

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