In early March the Portuguese government announced a two-year collaboration with technology industry heavyweight Cisco as part of the company’s Country Digitalisation Acceleration programme. The partnership will accelerate the digitisation of the Portugal’s economy and bureaucracy, something that Portuguese Prime Minister António Costa said will lead to bigger and better things for one of Europe’s fastest recovering countries. Following the signing of the memorandum of understanding with the tech giant, he stated that, “by accelerating the national digitisation agenda, Portugal can increase GDP growth, create jobs, and improve digital inclusion for our people and businesses.”
Cisco’s Country Digitalisation Acceleration programme is more than just a collection of buzzworthy syllables. The programme’s scope is far-reaching and includes policy areas such as cyber security, environmental security, educational outcomes, and the development of smart cities. However, the details of each partnership are determined by a national government’s own digital strategy.
Why did Cisco choose Portugal? One reason is its budding start-up culture. The country attracted approximately €15 million in venture capital in 2016, a whopping six-fold increase from the previous year. However, Portugal’s digital ecosystem still leaves a lot to be desired. The country ranked 15th on the EU’s 2017 Digital Economy and Society Index, only slightly above the EU average. Improving its digital infrastructure and the digital literacy of its workforce is essential if Portugal is to achieve its goal of becoming a European centre for innovation and entrepreneurship.
In order to support Portugal’s technology firms, Cisco will collaborate with Startup Portugal, the government’s strategy for entrepreneurship. Portuguese entrepreneurs will be able to access Cisco’s European Venture Capital Initiative and its incubation programme. The ultimate goal will be to help young, high-potential companies scale their business models and operate internationally in a relatively short period of time.
Even though new business ventures are indeed mushrooming across Portugal, the country’s start-ups aren’t the sole focus of this comprehensive partnership. Cisco will also assist the Ministry of Education in its implementation of the company’s Networking Academy aimed at improving the digital skills of both secondary school students and workers over the age of 45, with the goal of reshaping of the country’s workforce. Portugal’s ministries of health, justice, and defence will also team up with Cisco to design new platforms that increase efficiency, reduce costs, and improve security.
In a nod to the importance of Portugal’s booming tourism sector, the partnership includes a project with Turismo de Portugal. Wireless service will be expanded in Portugal’s historic centres thanks to increased wifi analytics in conjunction with the EU’s WiF4EU initiative. Portugal is currently one of the top five European vacation destinations and these upgrades are intended to make it even more attractive for tourists.
Is it possible that the Portuguese government has bitten off more than it can chew by committing to such a broad, potentially expensive programme? With debt around 130% of GDP, some observers might question the wisdom of this partnership. However, while it is certainly ambitious, it is not a stand-alone venture. Portugal’s partnership with Cisco is meant to work in tandem with Indústria 4.0, the government’s strategy for developing digital industries. Indústria 4.0 consists of €4.5 billion in public and private funds which will be allocated over the next four years to projects focused on digitalisation, innovation, and training. Suffice it to say that the country is placing a high-wager bet on the future importance of national digitisation, and is hoping to cash in big-time in the form of GDP growth, job creation, and overall attractiveness to both business and visitors.
This partnership is another example of the country’s alternative route away from austerity-based economic solutions. While public investment in Portugal is still historically low, it’s set to expand by 26% according to the 2018 state budget. Speaking to the European Parliament last week, the prime minister proudly explained that Portugal had devised an alternative to austerity measures by focusing on growth, better jobs, and fostering equality. So far, the numbers show that it is working. This next big investment in the digitisation of the country’s infrastructure will further demonstrate if the Portugal is on the right path to success.