Economy

Portuguese Tech Startups: A Key to Transforming the Economy

18 Nov 2024 min reading

The recent State of European Tech (SoET) report by Atomico highlights a pivotal moment for Portugal’s tech ecosystem. As I delved into the findings, it became clear that Portuguese tech startups are not only gaining global recognition but also holding the potential to reshape the nation’s economy. With these companies expected to raise €92 million by the end of the year, the momentum is undeniable, yet the journey is just beginning.
Over the past decade, Portugal has made remarkable strides. Between 2005 and 2014, tech investments amounted to just $145 million. Fast forward to the current decade, and this figure has soared to $1.5 billion (€1.4 billion). These numbers underscore the sector's growing capacity to attract significant global attention and capital. However, despite these advancements, Portugal’s tech investment represents only 0.06% of its GDP, placing the country in the lower half among European nations. This highlights a missed opportunity—one that could revolutionize the economy if harnessed correctly.
Atomico’s experts emphasize the importance of fostering a favorable environment for tech growth. Access to capital, government policies that reward innovation, and the expansion of local talent are identified as the cornerstones for unlocking Portugal's full potential. Encouragingly, there are already signs of progress. Initiatives led by the EU and local governments are driving more funding into Southern Europe, helping Portugal build the foundations for a stronger tech-driven economy.
One area where Portugal shines is in artificial intelligence (AI). With world-class universities and a focus on STEM (science, technology, engineering, and mathematics), the country has cultivated a strong AI talent pool. Currently, Portugal ranks 12th in Europe for active AI roles (17,700 jobs), rising to 7th when adjusted for population size. If this talent can be supported through strategic investments and policies, AI could become a transformative force, placing Portugal at the forefront of global technological innovation.
The report also highlights the growing tech workforce, which has quadrupled from 5,200 in 2015 to 20,700 in 2024. This growth, while promising, still lags countries like Spain and Italy, suggesting that there is still untapped potential in Portugal’s talent market.
So how can this growing tech presence transform Portugal’s economy? First, a thriving tech sector can drive job creation, not just in technology but across industries, including education, healthcare, and energy. Second, it can attract more foreign direct investment, boosting GDP and fostering innovation. Finally, the development of cutting-edge technologies, especially in AI and sustainability, can position Portugal as a global leader, drawing in international collaborations and furthering economic resilience.
The message is clear: Portugal has the talent, the momentum, and the potential. By focusing on policies that attract investment, support innovation, and empower entrepreneurs, the country can transform its economy and secure a prosperous future. With the world watching, it’s time for Portugal to seize this opportunity. The success of the tech sector isn’t just a victory for startups, it’s a game-changer for the entire nation.

Economy