Over the past few months, the US stock market has been rising rapidly, touching new all time highs. The domestic housing market appears to have stabilized in most markets, and home prices in some markets have actually risen dramatically through 2012 and the first part of 2013. Even with a fractured political system, the North American economy is sending many signals of recovery and growth. How so for Portugal?
Just returning from two weeks in the Lisbon area, I have spent a fair amount of my time trying to observe, ask questions, read and listen to a variety of sources to gauge what is happening in Portugal. While I desire to provide a report similar to that recorded above, unfortunately much of Europe, including Portugal, appears to be getting worse…much worse. People are foregoing health care services and medications, and families are consolidating with more and more people under one roof. I have heard reports of the malls being full of people during this current winter, not for the purposes of shopping but for the purposes of staying warm, as they have cut off the heat in their apartments.
The recent headlines have trumpeted the rebellion of the people of Cyprus, the tiny Mediterranean Island of approximately one million people. Instead of accepting an egregious penalty on all personal bank accounts, the Cypriots have instead taken to the streets in demonstrations. While Cyprus may be the proverbial “canary in the coal mine” implying that the smaller nations of the European Union have withstood about all they can of economic austerity, one sees far less raucousness in Portugal than in Cyprus, Spain, Italy and elsewhere.
However, it would be a grievous mistake to assume that the relative quiet from the Portuguese is a sign of positive economic developments. This current trip underscored the human toll that Portugal and other small nations are paying in this economic downturn. At times it was hard to realize that so many that you speak with are unemployed, and for many that are employed they are often underemployed, working two or three part time jobs in an attempt to escape financial despair. For retirees, significant reductions (10-40%) have been made in their pensions’ for all taxes and costs have gone up dramatically, and holidays have been reduced.
Now, as an entrepreneur and as professor in a School of Business, I must say that some of these cutbacks are indeed needed to make Portugal competitive with a globalized world. It is simply not possible for much of an entire country to go on holiday for 4, 6 or even 8 weeks per year. Government benefits for not only Portugal but much of the developed world (including the US), have escalated to unsustainable levels. But the solution does not lie in reductions, cutbacks and austerity—a new path to growth must be found.
Last fall, I met with a group of young Portuguese (pictured above) to discuss what this future could look like, and attempted to instruct, encourage and provide a different way of thinking to solve these problems. Currently, this group of exciting young people from Loures, Massama and Amadora are working on some ideas for a summer seminar on entrepreneurship, management and related business issues. Their excitement is contagious and needs to spread among all of the strands of Portuguese political, economic, socio-economic and other stratas of society.
And just this week I had the opportunity to visit a prominent business school in Lisbon, with approximately 8,000 students in various degree and executive programs. The students and curriculum is rigorous, vibrant and international. Diana Malyszek Oliveira, an alum of the ISCTE Business School in Lisbon completed their program and she has now worked for ISCTE for the past ten years in the International Programs department building collaborations and partnerships throughout the world. (Pictured below) These are all good signs! And the more that the energy of youth channeled through churches, schools, seminars and other platforms can foster and stimulate small and mid size enterprise development and entrepreneurship, the better.
But Portugal still labors under an inefficient and archaic new business permitting and licensing system, and the sooner significant reforms are made there the better. Abd they also need to realize that this must come from the ground up and not from the stale political ideas, parties and leaders. A new Portugal can emerge from this crisis, but it will take a new way of thinking about employment security than it has for many years in not only Portugal but in the entire European Union. The seeds of the greatness of the famous “Discovers” of Portugal who long ago ruled the waves and traveled the uncharted world remain—but they need something other than the directives of the European Central Bank to have them burst forth into a new and more prosperous Portugal for the future.
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