Luís Ferreira Lopes, Consultant
It is time for hope and the turning of a cycle following a hard and long period of recession and a pandemic arriving in various waves that forced people and companies to reinvent themselves in addition to causing the death of almost five million worldwide and over 18,000 Portuguese citizens (data from mid-October). The hope in this sunshine of autumn 2021 resides in the swift economic recovery that we all desire but that comes accompanied by caution and uncertainties across various facets of the economy and public health.
The 85% vaccination rate in Portugal against Covid-19 provides us with greater confidence for this winter and for what we wish to (re)build in 2022 should there be neither new variants nor behaviours that once again throw everything away (as seen in the first quarter of this year and in June / July when Portugal was even able to manage the pandemic outbreak well). This is not the time to be lowering any guard as there are uncertainties as regards the effective control of the pandemic when only 2% of the population in Africa has received vaccinations alongside various other countries with low levels in Asia or the Americas for example, which can only lead to reflection on the (in)equality of vaccine distribution. Furthermore, in Portugal and various European countries, given new outbreaks in already vaccinated sections of the population across various age groups, there is the need to administer the third dose of Covid-19 vaccine and alongside that for seasonal flu (for now, only for the more elderly and health professionals), so that this return to the normal life of people and public and private organisations is sustainable.
This is thus the time to innovate and redesign to drive significantly better rates of growth, competitiveness and productivity while facing the real risk of the Portuguese economy remaining in one of the latter carriages on the European train despite the optimistic forecasts for 2022. This may be achieved through clearly investing in Innovation (technology, people, management methods) applied to projects developed by owners and entrepreneurs who invest in Portugal whether through that termed the “silent revolution” of the ecosystem of start-ups and unicorns of national origin or through greater stimuli for small and medium sized companies without overlooking the large (at least on our dimension) businesses with export capacities and international scales.
There is certainly life beyond the budget and the European “bazooka” – and investors shall be attentive in forthcoming years to the funding package that should be leveraged for effective national development – but you don’t sell hope in packs of sugar, not even with the trickery of illusionism, when the context costs are not lowered (to adopt a recent expression from the 2022 state budget presentation) for those who still believe in the opportunities existing in the Portuguese market:
– energy at almost intolerable prices and still highly taxed;
– high levels of central and local government bureaucracy;
– slow program in the justice system that worsens the unpredictability for investment;
– fiscal system “unfriendly” to companies and the middle and upper middle classes that continue to incur a major proportion of the state’s expenditure despite some relief recently announced in the name of social justice for the scales in effect for the lower middles classes or whoever can survive on a little over 1,000 euros per month.
I would risk affirming that the entrepreneurs and business owners that try and create wealth, investment and qualified employment in Portugal are the true heroes for facing such obstacles. Despite the various weaknesses, the Portuguese business sector has demonstrated, a notable level of resilience was indeed proven in the pre-pandemic period and during this last eighteen months of always “rowing against the tide”.
This has been proven over the last two decades – of stagnation, recession and weak growth with the exception of 2019 and 2007 –, as we have accompanied and highlighted whether as editor of the Economia program on the SIC / SIC Notícias television channels or as author of the program / books “Sucesso.pt” (2001/16) and also as the corporate and innovation adviser to the President of the Republic for all sectors of the economy over these last five years – a challenging mission performed between the springs of 2016/21 with total dedication. Whatever the civic role, the conclusion remains the same: the country, and not only the state, should reward meritocracy more; those who dare to advance with innovative projects with strategy and vision.
This is a time for a systemic vision of the business sectors and areas of knowledge in general should we wish to obtain the objectives of strong growth and transformation across various fronts, such as the digital, energy or labour. As I highlighted in the book “Esperança e Reinvenção” (published in the late Spring of 2020, co-authored with business owners, managers and academics) and deploying the Allegory of the Cave from Plato’s Republic, “this is the time for having an open mind to leave the cave behind; that is, to investigate, learn more, innovate and promote the “idea of wellbeing”, being more demanding both of ourselves and of those surrounding us (…). Empirically, we know that we only encounter solutions and innovate when faced by need. And the question is almost always ascertaining whether this innovation is incremental, gradual and reformist or if this is disruptive and causing deep transformations. Is this the time to redesign models that we have hitherto taken as certain and thinking and acting differently?”
At the beginning of the third decades of the 21st century, we, those who have survived the Covid-19 pandemic, should be well able to value the gift of Life and attempt to better understand that termed the behavioural economy – or the behaviour of economic actors in managing crises –, as some already perceived in the financial crisis of 2008/09 which dragged on until 2014 in Portugal after the country stood on the verge of bankruptcy in April 2011 and required external support from what as known as the “troika” and have returned to the markets three years after seeking assistance from the IMF, the ECB, and the European Commission… a period that already seems far distant but that deserves retaining in the memory.
This is the time for grasping the utility and relevance of a systemic vision with the courage to innovate, the interconnections of sciences and knowhow, the interdependence of people and countries, solidarity and charity, the humanist spirit that unites (and does not divide) people of all ages, social and financial conditions and all beliefs as many of us grasped over the course of the pandemic.
Whoever understands this is (or was) only a public health and economic crisis – which generated unemployment, newly impoverished people and a high financial bill for Portugal and various European countries and the world – is probably taking a reductive view of these strange years of 2020 and 2021. We do not yet know whether the recession and recovery will be a V, U or W but we do know that the forthcoming times demand a change in mindset and strategic thinking.
Various organisations and persons have already picked up their pencils to redraw and reinvent the business and working models of their companies and states, in schools and in the planning of cities. And this is the time to ask questions:
– Will we understand with this pandemic that ensuring stocks of foodstuffs and water and the smooth functioning of energy, telecommunications and technology is a matter of national security and sovereignty?
– What lessons will be able to learn from the health professionals and their attitude of selfless combat on the frontline, knowing that the structural problems in healthcare are already longstanding with budget injections and recourse to some remedial measures only serving to relieve some of the pain?
– What examples of military inspiration were replicated by employees, managers and entrepreneurs across every sector of the economy, in the factories and the fields, in the offices or in homeworking, both before and during, the military management of the public vaccination campaign in 2021?
In summary, should we attempt to elicit some lessons from the pandemic, we would point to some key variables for our survival as a national community and the return of society to “normality” – which seem obvious in theory but are anything but easy to apply in practice:
– alignment between the leadership and the team;
– proactivity with a spirit of mission and service;
– knowing how to plan and always counting on contingency plans (b, c, d, e, f…);
– testing and never facilitating or overlooking risks (examples: health, civil protection, social or labour conflicts, in periods of high stress);
– acting rapidly and communicating efficiently and transparently in all crisis management situations (which has not always happened);
– returning to the frontline (even after having been wounded in combat) and not leaving anybody behind;
– seeking to ascertain the impacts of decisions (right or wrong) and delaying or not deciding at the key time;
– fostering solidarity and cooperation at the social and political-institutional levels.
In the text I wrote for the aforementioned book in 2020, I raised various questions that I believe remain actual because “this is also the time to question and imagine what might be changing”.
– Will we maintain the recourse to homeworking in companies and public administration structures?
– If so, what implications will this have on the property sector for usage as offices and on the (lesser) need for business travel and commercial flights even while appreciating the return of in-person contacts?
– Will there really be greater investment and better management of resources in health and education?
– Will we head back into the stress of traffic jams (now already happening since September…) or will we understand we have to improve the means of public transport, the cycleways and green roots?
– Will we take advantage to truly accelerate the digital transformation and the energy transition, reducing the pollution, taking more care of nature and better managing the resources of our seas and oceans or do we stop at the politically correct discourses on sustainability?
– Will we have the capacity to question, in a constructive and civic fashion, with demagogy and easy populisms, how to build a better country in a fairer world, with greater regulation and true economic and geopolitical interdependence – which differs sharply from the globalisation of untamed capitalism?
– With the pandemic over, will we continue with the spirit of solidarity (that we witnessed in the first wave of 2020 and later in early 2021) and value that which is really essential when dealing with our survival and giving without the expectation of receiving, irrespective of our religious or spiritual beliefs?
– Will we return to egoistic and hedonistic practices or will we gain a greater willingness to listen, to understand, to look and help the Other, cherishing the differences, seeking shared ground and building bridges of dialogue among persons, cultures and civilisations as the Portuguese have known how to do over the course of centuries?
The diagnosis is done and it is time to be precise. We know what we need to improve:
– better Management and Leadership practices;
– raising exports, ‘made in’ Portugal, up the chain of value;
– more appropriate training for technical, middle and senior management;
– attracting more foreign investment to Portugal;
– working better in marketing (and post-sales services) and the reputation of our products and brands, including the country-brand;
– developing or seeking more centres for reflection (think tanks) and producing interdisciplinary knowledge on applied Innovation, competitiveness and productivity.
The early years of this decade should in no way be wasted neither in terms of financial and human resource management nor in the short term tactics of various powers. This is the time for setting out ambitious but feasible paths forwards, preferably conciliating the political and social spectrum on the pain of Portugal becoming one of the economies that most suffered in Europe when this economic cycle inverts or implodes in a new financial crisis such as that of 2008/9 – and which hit Portugal in 2011.
Following the hard and difficult, but also challenging, period that we have been through, we did not really need a crisis to discover what is really important in our lives as the “noble people” of a “valiant Nation”, united and European, born in 1143. Indeed, this represents an identity asset that we should value more and we might very well begin planning for the country we wish to be in 2043 when Portugal commemorates nine centuries as a nation.
And I return to the book: “The country of Eduardo Lourenço, Fernando Pessoa, Eugénio de Andrade and Amália Rodrigues has already faced so many crises, plagues, invasions, losses of sovereignty, bankruptcies, jealousy, poverty, the risks of adventure, and discoveries of vain glory and wisdom (by the sound of the waves at sea or by the chords of a guitar) of what is lamenting, bravery, struggle, happiness, resilience and courage. This is thus a time for Hope and Reinvention”.
This is also the time for political courage to raise the barrier and focus on politics in the noble sense of its origins: Polis, in the service of the community and citizens. There is much that needs advancing with reforms to the various domains of state and functioning of the different public entities. There is a need to innovate, with political and economic stability, without overlooking the fiscal competitiveness to attract and retain investors. This is not the time for “fighting like cats in a bag” and dragging down anybody who attains success nor for the jealousy and petty mindedness of the factions that only delay or annul so many Lusitanian businesses.
As we have been witnessing since summer with the downturn in the pandemic, these are the times for taking investment decisions and doing good business instead of delaying and waiting to see. Portugal is, despite the aforementioned problems, an attractive market for investment because, in a world and a Europe undergoing change, this is a country with countless advantages for living and working in and for launching businesses.
In this country, there are various national, Iberian, European and even world champions in many different sectors, segments and niches – where differentiation and rising up the value chain were and are decisive to survival and resilient growth. This is the time for a new paradigm (there are companies who have already swiftly perceived this) and high doses of self-esteem have to make up part of the recipe for the international success of Portuguese businesses, their owners and workers for whom, ever since the 15th century, there have been no impossibles.