Portugal: sun, sardines… and start-ups

by Cristina Parente, International Business Strategist at ICC

The announcement of this summer’s openings in Lisbon of a Second Home Hub – a major tech workspace in London, and Impact Hub – one of the biggest entrepreneurship communities in the world made me stop for a second and ask myself: why are these two iconic start-up incubators interested in settling in Portugal? Can a country submerged in a deep financial crisis, with one of the biggest population exoduses in Europe, be the next big tech destination?

Last month, $US 22 million in Venture Capital was raised by Veniam, a Portuguese start-up that wants to enable free Wi-Fi in urban settings using vehicles. The company was created two years ago in the incubator of ctwo Portuguese universities and now has offices in Porto, Silicon Valley and Singapore.

When start-ups and VC hold hands in the same country, it is probably worth taking a closer look.

Portugal is a small, financially troubled country better known as a tourist destination than for its entrepreneurship.

Portugal has a population of 10 million people. It is part of the EU, and is a gateway to a market of 250 million people worldwide, thanks to its ties with other Portuguese speaking countries such as Brazil, Angola, Mozambique and Macau. It also has a long tradition of trade with the UK. The Eurozone crisis hit Portugal early in 2009, and a great recession led Portugal to a 3-year bail-out programme in 2011. Portugal’s GDP grew by 0.9% in 2014 and 1.5% in 2015, and the growth forecast for 2016 is 1.6%. After an extremely difficult period, the Portuguese economy is now showing signs of recovery and a buzz of excitement is attracting international attention… and investors.

Is it safe to assume that a small tech revolution is happening in Portugal? Why should you, or I, be considering opening a start-up in Portugal?

Porto, in the north of Portugal, was recently considered one of the best value destinations for start-ups. In summary, Portugal has a low technical cost base (low rent, cheap food and transportation, etc) and a developed local infrastructure, with good connections by road, air and sea. The government has introduced a number of tax breaks and incentives for those who set up their own company. Portugal has a well-educated work force with a talented young generation with a high technical skill set. Portuguese are welcoming people, and English is widely spoken in business.

Portugal is becoming synonymous with innovation and leading companies are building a new and effervescent reality. If these are not good enough arguments for you to take your laptop and move to Portugal, I will give you a few more: sun, quality of life, security, golf, Port wine and… sardines, of course!