Innovation and Growth – The point of no return

Innovation and entrepreneurship are terms and concepts increasingly used nowadays. As we usually say, they are “fashionable”.

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However, the act of creating / thinking differently or having an original idea is as old as the human capacity to carry out that same idea, making it happen, putting together a business model and to “roll up their sleeves” in regard to carrying out the undertaking.

Portugal, Europe and the World are living in rapidly changing times, sometimes changing at breakneck  speed. Today the concepts of innovation, differentiation and entrepreneurship are key to the sustainable development of economies and societies, on every continent, and are far from being fleeting trends.

This is not a phenomenon that will slow down when the lights of the cameras of any kind (TV cameras, photo cameras, mobile phones and tablets, and so on) are turned off. However, although we may be facing events on an international scale such as the Web Summit, there will always be people ensuring that all of this is temporary, because the structural problems remain. All because Paddy Cosgrave decided to move this technological startup event from Dublin to Lisbon.

If the truth be told, Portugal and Europe are having serious problems in regard to the macroeconomic and financial system environment. Problems that do not vanish by magic. Many governments and organizations would like that to happen, but that is not the case. The question is knowing what we are talking about when we approach, in 2016, the concepts of innovation, differentiation, investment, entrepreneurship, growth and confidence.

First of all, Innovation is a theme that the Portuguese, in various businesses, have been at ease with for many years, although we recognize that the resistance to change mindset still prevails for some people. However, this problem is not exclusive to the Portuguese. In fact, Innovation is a universal and cross-cutting issue for all businesses and all areas of knowledge.

However, the mindset is crucial: who does not have an open mind to change and thinks or acts differently or does not have the agility to adapt to changing times certainly has added difficulties in living and seizing the opportunities generated by a new world. And this is not just about the “unattainable” realm of technologies and young openspace entrepreneurs, or overnight app creators.

Secondly, once the universality and mainstreaming of the concept and of the act is assumed, Innovation is perceived everywhere. Therefore, this is not just a question of technology (which could be merely procedural or instrumental), it is also a question of attitude regarding the leadership of organizations towards management processes and the way we manage resources, especially that of talented people.

In the real world of business and families, Innovation is something as simple as having an idea or a different answer to a new problem. In a second phase, the issue relates to the application or implementation of the idea, no matter how brilliant it is. But then, sometimes, the idea remains on paper, on the PC or in the iPad – it just does not become reality. Just remember the high “mortality” rate of startups around the world

However, we are not talking about remembering the teachings of Management, Engineering or Technology manuals. Let us just remind ourselves of Plato and his Allegory of the Cave in “The Republic”. It calls for the need of learning to find the difference between the original idea, or essence, and the archetypes or the shadows cast by the cave fire. It is not always easy to find this difference.

But we also may go from the famous dialogue between the Greek Socrates and Glaucus, in the fourth century B.C., to the seventeenth century, where we find the same relentless pursuit of the “Truth” or a new idea for the problems of Polis, just to find the French philosopher René Descartes and his Discourse on the Method. Thus, we realize the importance of clear and distinct ideas, which should be “ordered” through “methodic doubt”. Therefore, we may have ideas (or perceive them), but a method is required in order to give them practical utility … and to have faith in them, of course.

At this point, in the twenty-first century, the main question is the speed of treatment or the filtering of so many supposedly new ideas. The amount of information (data) and innovation is such that it leads into the field of registration of intellectual property or patents.

However, the act of registering a patent of an idea becomes useless if we take a long time (days, weeks or even months) to execute it. Therefore, it is crucial to make the innovation happen and this matter has more to do with the management capacity and the courage to undertake, assuming risks and overcoming obstacles, than any other subject. In short, the logic of the idea itself (“I think, therefore I am”, said Descartes) is somewhat outdated, unlike the concept of resilience that we have in ourselves or in our organizations in order that our idea is the one that best suits the resolution of a given problem. At this stage, we may approach another concept – the concept of differentiation, absolutely essential for our product, good or service to become the most attractive and profitable in a given sector, segment or business niche.  In fact, differentiation and innovation are more valuable if they really represent a rise in the value chain, regardless of the country we are in.

Above all, in Portugal the Innovation and Differentiation challenge is a matter of mindset:

a) we are not the Calimeros and the ugly-ducklings in Europe. We must understand this once and for all. In fact, we have several cases of success in all the sectors of economy, science, arts or sports. This reality demonstrates that when we focus and create the right conditions to make things happen we are as good as or better than the others. Therefore, the problem is more on the management quality side and less on the quality and willingness of talented people.

b) Companies, universities, polytechnics, incubators, accelerators, national or regional employers’ associations and local authorities which support startups should all realize that it is time to come together and work as a network, instead of being stuck in sterile, senseless rooms, as I have been advocating for more than two decades. It is urgent to promote, in a sustainable way – and not in regard to political tides or EU funds – this new contagious attitude of entrepreneurs, regardless of their ages, geographic locations or backgrounds – that aims to create innovative and differentiative companies or projects in a country with such adverse context costs as Portugal.

Remember the cluster idea that Michael Porter spoke about? Great! So, after so many years of missed opportunities, just apply it … Regarding the field of synergies, we find good examples of working in partnership, because the need for the last many years of crisis has sharpened the wit of those who undertake and invest.

c) The holding of a summit dedicated to technological companies (and startups from various sectors of the economy) in Lisbon in 2016 and 2017 is an opportunity for us to welcome the people who comes to Portugal and thank them for looking at our potential growth. Above all, the Web Summit is a wave worth surfing. It is the cannon of Nazaré, which has always been there, until a world-renowned surfer (McNamara) beat the record, as seen on TV networks in all continents. And the word “Peniche” has become pronounced throughout the world and Portugal came to the front. Portugal became a part of the the surfing world.

Our kayaks are the best and for a long time they have equipped more than 80% of the Olympic teams worldwide. Our wine and olive oil win numerous awards and has become more and more sought after. Our cities, villages, monuments, museums and landscapes are increasingly a must for tourists from all over the world. Our exports in regard to machinery, shoes, textile or cork have an increasing role in creating wealth in Portugal. Our engineers and nurses are in huge demand…So there is no doubt we should overcome the chronic Lusitanian problem of low self-esteem. Others like the Portuguese and what we do in our country, but none the less we are always complaining. So, we may have a psychosociology issue that we must face and deal with.

We are living at a turning point after a decade and a half of stagnation. The point is not that the Portugal 2020 funds may solve structural problems or measure one-off effects of a State Budget, which is always just an operational instrument for one year. So, we must think about the country in the long term, at least as far as 2030 – not in the short-term vision of party-political cycles.

Portugal must grow more than 2 or 3 percent per year, so there is sustained growth, employment and greater wealth distribution, otherwise the economy will continue to lose competitiveness and the little wealth generated in the country will only serve to repay our public and foreign debt interest; the last being much larger and more difficult to pay.

This is the proper time to reflect on the notoriety and reputation of Portugal. Forget the ghosts of the past, the inferiority complex or the megalomania. In short, we are where we always were: not at the periphery but at the centre of the world, a platform where business and cultures cross between continents, a place where it is good to live. As with everything in life, this is only a matter of perspective, mindset and an attitude of openness to change and the creative spirit. And that spirit exists in each startup and in many of us, the Portuguese people.

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