L’Atelier takes a look at Lisbon and its buzzing innovation ecosystem. In recent years a number of success stories have emerged with the support of the Portuguese government.
However, 2011, 2012 and 2013 were dark years for Portugal. The economic crisis forced the government to tighten its budget drastically and the economic cure imposed by the ‘Troika’ of the IMF, European Commission and European Central Bank had a severe impact on ordinary Portuguese citizens. Even today more than one Portuguese in five lives on less than €411 a month.
Although Portugal is still somewhat in the shadow of its neighbour Spain, for more than a year now the Portuguese economy has definitely been getting back on to an upward path. Now just a few months away from a new round of legislative elections, the country appears to be making steady progress towards economic stability.
As happened in Spain, periods of economic misfortune often provide fertile ground for innovative, creative people who are keen to grasp every opportunity to turn things around.
Public funding lacking, but innovation-fostering initiatives in place
Portugal appears to have chosen this path to growth, with momentum driven by Lisbon. While, in this post-economic crisis period, the Portuguese government is clearly limited in what it can do to support innovation, there is nonetheless strong public support for business creation in terms of legal structure and communications. For instance the new Empresa na hora (‘On-the-Spot Firm’) initiative enables you to set up a company in record time. Moreover, in 2011, the Lisbon municipal authorities, in partnership with Portuguese bank Montepio and IAPMEI, the Portuguese agency for competitiveness and innovation, set up Startup Lisboa, a startup incubator focusing on technology, e-commerce and tourism. In fact Lisbon was named ‘European Entrepreneurial Region 2015’ alongside Northern Ireland and the Spanish region of Valencia. This EU label recognises the efforts of Lisbon and the wider Portugal to foster entrepreneurship and encourage innovation in the broadest sense.
Driven by this momentum, a range of co-working spaces, such as Dock-38, and acceleration programmes such as Beta-i, which organised the Lisbon Challenge – a partner of Paris-based accelerator Numa – have appeared in Lisbon and elsewhere. In the north of the country, Porto, Coimbra and Braga are also starting to become innovation hubs, especially for hardware.
Some high potential startups have emerged, for example online luxury clothing company Farfetch, which is now valued at €1 billion, Feedzai, a platform that uses Big Data technology to combat online fraud, and Uniplaces, an Airbnb-type solution for student accommodation. One example of a young but equally promising company is Orankl, which applies Big Data analysis to marketing.
Innovation ‘made in Portugal’ is not showing any signs of leaning strongly towards any specific sectors. However, some very promising initiatives are emerging in the fields of ‘fintech’, tourism, e-health and e-commerce.
Portuguese ecosystem striving to make its mark internationally
‟We’re a small country”, points out Beta-i co-founder Ricardo Marvão. Portugal’s population is only 10.5 million, 5% of whom live in Lisbon. With such a small domestic market, the country has its sights set on becoming an innovation hub with international outlook. Lisbon has at least one definite advantage: the city’s time zone is well-placed for communication with both the United States and Asia.
In addition, the city is a stopover point for flights between the old and new continents. Tech events held in Portugal such as the Go Youth Conference and the Lisbon Investment Summit – major international get-togethers for innovation players – often take a strongly international approach.
As elsewhere in Europe however, there is a need for more business angels and Venture Capital (VC) firms, especially investors able to provide seed funding. Apart from Portugal Ventures, the largest Portuguese VC firm, the VC landscape is still in its infancy: ‟Startups seeking pre-seed and seed stage investment still have to look to Germany or the UK, for example, to obtain financing. Today it can prove more difficult to find €15,000 to help get a venture off the ground than to raise closer to €500,000 to carry out an expansion project,” reveals Ricardo Marvão.
Meanwhile Portugal also needs to make its mark as a venue for substantial acquisitions, which would ‟result in Portugal receiving more attention and international recognition,” stresses Ricardo Marvão.