Portugal has to decide whether it wants to be the AI back office or create the AI economy

Portugal has to decide whether it wants to be the AI back office or create the AI economy

Portugal has become, in recent years, a particularly competitive destination for international service centers, administrative operations and support teams of large companies. We have qualified talent, excellent language skills, security, quality of life and lower wage costs than many Northern European economies. It was an important strategy, it created thousands of jobs and helped internationalize our economy. But artificial intelligence now forces us to ask whether this model will be enough for the next decade.
A recent JLL study on the impact of AI on employment and real estate shows that we are not facing a simple destruction of jobs. Some functions will be automated, many will be profoundly transformed and others will be created. Sectors such as technology and financial services may continue to grow, but with more productive teams and greater capacity to generate results. On the contrary, certain administrative and support functions are among those where exposure to automation may be greater.
This conclusion should be of particular interest to Portugal. For too long, part of our competitiveness has been based on a relatively comfortable idea: we can provide qualified workers for lower wages than in London, Paris, Frankfurt or Amsterdam. It has worked, but it can hardly be a permanent strategy. If AI allows ten people to do the work that previously required fifteen or twenty, the individual cost of each worker loses importance. What becomes important is how much value each professional can produce.
And perhaps this is one of the biggest opportunities for the Portuguese economy. Instead of using AI to protect a model based on lower costs, we can use it to finally attack one of our structural problems: low productivity. Portugal needs companies where technology, merit, productivity, and remuneration are much more connected. If a worker equipped with artificial intelligence can produce significantly more, part of that gain should be able to be transformed into better wages, greater business competitiveness, and faster growth.
We have some of the necessary ingredients. Portugal is receiving investments in data centers, submarine cables, renewable energy and digital infrastructure. Sines could become one of the main European hubs linked to artificial intelligence infrastructure. Lisbon and Porto continue to attract technology companies and international talent. Portuguese companies are able to create technology and compete internationally. The question is how much value we will be able to build on top of this infrastructure.
Because installing servers is not enough.
We need research, engineering, software, intellectual property, startups, technology companies, decision-making centers and capital capable of transforming knowledge into global business. We also need universities closer to companies and a labor market flexible enough to allow talent, productivity and remuneration to evolve together.
This transformation will also have consequences for real estate. If Portugal continues to essentially capture low-cost administrative operations, part of the traditional demand for offices may become vulnerable to automation. If, on the contrary, we manage to attract higher value-added activities, a different demand will arise: better offices, laboratories, technology centers, data centers, housing for qualified professionals and new urban centers.
That is why the discussion about artificial intelligence is much bigger than technology.
It is a discussion about the economic model we want to build.
Portugal can continue to be an excellent place for multinationals to perform certain functions at competitive costs. We should not neglect this advantage. But we should aim for much more.
The next decade will not be won by countries that simply have access to artificial intelligence. Practically everyone will.
It will be won by those who can use it to produce more value, create better companies and pay better wages.
Portugal now has to decide if it just wants to work for the AI economy or if it wants to help build it.