Portugal’s economic transformation is already underway – The Portugal News

Analysis of Portugal’s Economic Growth Potential in Alignment with Sustainable Development Goals

Executive Summary

A recent analysis indicates that Portugal is positioned for sustained annual economic growth exceeding 3%. This potential is not speculative but is grounded in fundamental economic transformations that align closely with several United Nations Sustainable Development Goals (SDGs). The convergence of enhanced human capital, demographic shifts, strategic investment, and unique structural advantages provides a clear pathway for Portugal to achieve robust and sustainable development, contributing significantly to SDG 8 (Decent Work and Economic Growth).

Core Drivers of Sustainable Growth

The report identifies three primary engines driving Portugal’s economic trajectory, each contributing to specific SDGs:

1. Knowledge and Innovation: The integration of advanced knowledge into the economy is projected to boost productivity, contributing approximately 1% to annual growth. This directly supports SDG 9 (Industry, Innovation and Infrastructure) by fostering innovation and aligns with SDG 4 (Quality Education) by leveraging a highly skilled workforce.
2. Demographic Expansion and Decent Work: A reversal of previous demographic trends has seen immigration surpass emigration, adding over 100,000 people to the resident population annually. The successful integration of this talent into the labor market contributes another 1% to annual growth, advancing SDG 8 (Decent Work and Economic Growth) and promoting SDG 10 (Reduced Inequalities) through inclusive labor policies.
3. Strategic Investment: Increased investment intensity serves as a critical catalyst for economic expansion. This driver is fundamental to realizing SDG 9 by upgrading infrastructure and industries and supports SDG 17 (Partnerships for the Goals) by attracting foreign and domestic capital.

Foundational Pillars for Sustainable Development

Portugal’s growth potential is further reinforced by several key strategic advantages and sectoral transformations that underpin its commitment to the 2030 Agenda:

• Human Capital Development: Significant investment in higher education has elevated national skills indicators above the European average. This focus on lifelong learning and research is a cornerstone of achieving SDG 4 (Quality Education).
• Strategic Infrastructure Advantages: The nation benefits from a unique combination of affordable energy, excellent digital connectivity, and a strategic geographic location for transatlantic submarine data cables. These assets are crucial for advancing SDG 7 (Affordable and Clean Energy) and SDG 9.
• Sustainable Agriculture and Forestry: The agri-food and forestry sectors have undergone a profound transformation, marked by soaring productivity. This is attributed to major infrastructure projects and the promotion of intelligent water usage, which directly contributes to SDG 2 (Zero Hunger), SDG 6 (Clean Water and Sanitation), SDG 12 (Responsible Consumption and Production), and SDG 15 (Life on Land). Portugal’s global leadership in sustainable products like cork further exemplifies this commitment.

Key Investment Areas for Future SDG Alignment

The analysis identifies four priority sectors for investment over the next decade, each with strong links to specific Sustainable Development Goals:

• Health and Biotechnology: Fostering this sector will directly advance SDG 3 (Good Health and Well-being).
• Multinational Competence Centers: Attracting these centers will create high-quality jobs and foster innovation, supporting SDG 8 and SDG 9.
• Digital Economy and Cloud Infrastructure: Investing in this area is essential for building resilient infrastructure and promoting inclusive industrialization, key targets of SDG 9.
• Defense and Advanced Technologies: Developing advanced technologies contributes to national and regional stability, a prerequisite for sustainable development as outlined in SDG 16 (Peace, Justice and Strong Institutions).

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The article discusses several issues that directly or indirectly connect to the following Sustainable Development Goals (SDGs):

   • SDG 8: Decent Work and Economic Growth: The core theme of the article is Portugal’s potential for sustained economic growth, driven by productivity, an increased active population, and investment. It explicitly mentions a growth target of “more than 3% per year” and the integration of over 100,000 people annually into the labor market.
   • SDG 9: Industry, Innovation, and Infrastructure: The article highlights Portugal’s strategic advantages in infrastructure, such as “excellent digital connectivity” and “submarine cables.” It also emphasizes investment in innovation and technology-driven sectors like “health and biotechnology,” the “digital economy,” and “advanced technologies such as drones.”
   • SDG 4: Quality Education: The text identifies “knowledge” as a fundamental engine of growth. It points to Portugal’s heavy investment in “the qualification of its workforce,” the growth of “higher education,” and its success in attracting “international students and researchers,” leading to the country being “above the European average in several skills indicators.”
   • SDG 2: Zero Hunger: While not focused on hunger, this goal’s targets related to sustainable agriculture are relevant. The article describes a “profound transformation” in the agricultural sector, where “productivity has skyrocketed thanks to infrastructures such as Alqueva and an increasingly intelligent use of water.”
   • SDG 7: Affordable and Clean Energy: The article mentions energy as a key strategic advantage, noting that Portugal has “cheaper energy than the European average.” This relates to the goal of ensuring access to affordable and reliable energy.

2. What specific targets under those SDGs can be identified based on the article’s content?

   Based on the article’s discussion, the following specific SDG targets can be identified:

   • Target 8.1: Sustain per capita economic growth. The article’s central conclusion that “Portugal has real conditions to grow more than 3% per year” directly aligns with this target of sustaining economic growth.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. This is supported by the text’s emphasis on incorporating “more knowledge into the economy” to gain productivity and investing in key areas like “health and biotechnology” and the “digital economy.”
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The mention of “excellent digital connectivity” and “submarine cables” as strategic advantages directly relates to developing high-quality communication infrastructure.
   • Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors. The identification of “competence centers of multinationals” and “defense with advanced technologies” as key investment areas points directly to this target.
   • Target 4.4: Substantially increase the number of youth and adults who have relevant skills for employment. The article supports this by stating that Portugal has “invested heavily in the qualification of its workforce” and is now “above the European average in several skills indicators.”
   • Target 2.4: Ensure sustainable food production systems and implement resilient agricultural practices that increase productivity. The article’s description of how “productivity has skyrocketed” in agriculture due to “infrastructures such as Alqueva and an increasingly intelligent use of water” reflects this target.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   Yes, the article mentions or implies several indicators that can be used to measure progress:

   • Annual GDP Growth Rate: The explicit mention of a target to “grow more than 3% per year” serves as a direct indicator for Target 8.1 (Annual growth rate of real GDP per capita).
   • Net Migration and Labor Force Growth: The statement that “Immigration has far surpassed emigration, adding more than 100,000 people to the resident population every year, most of whom are integrated into the labor market” is a clear indicator of an increasing active population, relevant to Target 8.2.
   • Productivity Growth in Agriculture: The description that “Productivity has skyrocketed” in the agricultural sector is an implied indicator for Target 2.4 (Agricultural productivity).
   • Educational Attainment and Skills Levels: The claim that the country is “above the European average in several skills indicators” is a direct reference to indicators used to measure progress towards Target 4.4.
   • Investment in Key Sectors: The identification of “health and biotechnology,” “digital economy,” and “advanced technologies” as “key areas of investment” implies that tracking investment flows into these sectors would be an indicator for Target 9.5.
   • Energy Costs: The mention of “cheaper energy than the European average” can be seen as an indicator related to the affordability aspect of SDG 7.

SDGs, Targets, and Indicators Table

Source: theportugalnews.com