Voice of Experience

How do you define CIP’s role in the context of business in Portugal?

The global economy is going through a series of rapid changes, demanding that organizations adapt to new challenges in the business context. CIP interprets these challenges and finds the best solutions, thus acting as a beacon that guides companies. CIP must focus on finding the answers to these new challenges. We represent 140,000 Portuguese companies and are the largest employers’ confederation among 70 associations. The diversity of the companies we represent provides us with a deep knowledge of the day-to-day activities and needs of our companies, replicating best practices that have worked for other companies in need.

What are Portugal’s current competitive factors, and what needs to be done to improve them?

We have an excellent communication network, great highways, and young people who are highly qualified. However, we still need to improve the qualification of our human resources, because it is through knowledge that differentiation among countries will prevail. Incorporating knowledge to create innovation will allow us to differentiate ourselves in the highly competitive global economy. In addition, more structural reforms are needed. The wealth of the country does not support the dimension of the state we currently have. Portugal must improve the qualification of its human resources and free the state from activities that consume a great deal of the wealth generated in order to transfer the surplus to the economy. We must stimulate the improvement of competitiveness factors by reforming tax and reducing bureaucracy so it is less stifling. If the state manages these points, then companies will be able to perform their roles far better.

What is the importance of strategy in terms of Portugal’s efforts to change its industrial profile theme?

The country cannot be based on services alone; we must also have an industrial base. The weight of industry in the economy must increase, and this can be reached with a well-defined strategy. Portugal must bet on sectors such as aeronautics or the maritime sector. The country must also look to traditional industries such as footwear and textiles, where we have excellent examples. Portugal must define its strategy and business model to diversify and improve. The country must know what it wants and what it can do; we have excellent examples in the metallurgical and metal-mechanics industry, where we are increasing sales and exports. There are great successes in the aeronautics industry, where Embraer and other companies have come to Portugal. Then, there is the automotive industry, where we are attracting companies through clusters that provide components to the sector. Portugal must define industries and, within these, aggregate and develop strategies, promote reforms, and fiscally encourage possible ways to invest. We must attract productive investment and bring more national and foreign investments that will bet on internal production, substituting imports for internal manufacturing, and developing more industry than what we currently have. The weight of industry in Portugal’s GDP has fallen in the last 20 years, and we must return industry to the center of our economy.

What are the priorities for CIP in the coming year?

We will continue to demand that the government look at our internal politics and our role in Europe and the world. We want the government to promote reforms that must be undertaken. We need fiscal stability, and our fiscal policy must be more predictable. We cannot change the fiscal framework every year; there must be an attractive fiscal policy toward investment. It must allow predictability for investors and ensure that taxes will not change in the next five or eight years. The reform of the state must allow the economy to set itself free and entice stimulus so that it can benefit. We need a more efficient legal system with less bureaucracy in order to benefit economic agents.