eteams report centro

INTERREG IIIC operation

“Interregional Entrepreneurial Teams” (3E0010I E-teams)

The Report on SMEs Support Policies and Practices

in Centro Region

September, 2005

2

The Report has been based on “The benchmark system for SMEs support policies and practices” developed by Sigmund Barczyk, Content Advisory Board (Slaskie, PL) and Marcin Baron, Project Co-ordinator with support of: Artur Ochojski, Regional Co-ordinator (Slaskie, PL) and Bogumił Szczupak, Content Advisory Board (Slaskie, PL) with inputs by: Stasys Bielinis, Regional Co-ordinator (Klaipeda, LT) and John Vourdoubas, Content Advisory Board (Kriti, GR)

This document has been produced within the “Interregional Entrepreneurial Teams (E-teams)” project, co-ordinated by The Karol Adamiecki University of Economics in Katowice, Poland. The project is part-funded by the European Union under the Community Initiative Programme INTERREG IIIC East Zone.

The document has been elaborated and composed by

AUTHOR(S)

Carlos Cerqueira

Rui Miranda

(Instituto Pedro Nunes)

Filipe Neves

(IPN Incubadora)

3

Contents

I. MAPPING A REGION KEY ISSUES, KEY RELATIONS AND STRUCTURES I.1 Region’s profile and attributes-from business point of view

� Region’s basic data � Type of the region. Interregional context of region’s profile � Basic business profile of region � Employees and prerequisites for labour market dynamics � Costs of location � Legal profile in business making context � Innovation profile � Communication standards � Some other specific attributes � Region’s attractiveness- uniqueness � Regional/local competitive advantage

I.2 Business profile of region

� Main relations and proportions � Business structure dynamics

I.3 Mapping the SMEs in regional context

� SMEs –basic data � Business profile of SMEs

I.3.1 Key factors affecting SME sector dynamics

� Cultural codes affecting patterns of enterprising � Access to labour. Skills and competence � Innovation as a change and success factor � Creativity as a factor. New trends in making business � Large companies impact (Strategic partners, investors, market creators) � Public demand as basic stimuli for making business. Private operating-public

funding. (New standard requirements and new fields for call for tender) � Clustering and networking as processes facilitating accessibility. Factors

profiling business access and development � Summing up: Availability as a location factor � Summing up: Tendencies/structural changes

4

II. SUPPORT SYSTEM FOR SMEs

BENCHMARKING - ACTORS, PROGRAMS, POLICY DOCUMENTS POLICY MAKING PHASE PROVIDER’S PERSPECTIVE II.1. Strategies policies, programs, actors, interrelations, interdependencies II.2. Specific programs and policies SMEs-oriented: women, disabled and

exclusion III. SUPPORT SYSTEM FOR SMEs

BENCHMARKING - PRACTISES. IMPLEMENTATION PHASE USER’S PERSPECTIVE III.1 DIRECT SUPPORT to SMEs

III.1.1 Improving access to the capital. Financing, funding, capital supply, financial and market expertise

III.1.2 Improving access to knowledge and market/business information III.1.3 Improving innovation support III.1.4 Improving access to labour market III.1.5 Improving access to good institutional standards for making business. III.1.6 Demand strengthening activities (market extension and diversification): new

market opportunities � Regional/local authorities as creator of demand and facilitator of market

extension for SME products and services � Regional/local authorities as facilitator of market extension for welfare services

and municipal services � Regional/local authorities as facilitator for start ups and spin offs

III.1.7 Improving business environment and spatial arrangements III.1.8 Improving access to technical infrastructure and communication standards III 1.9 Improving organisational/administrative support III.1.10 Improving educational support and training - supporting higher competence

standards III.1.11 Supporting networks and clusters III.1.12 Encouraging networking and clustering

III.2 INDIRECT SUPPORT TO SMEs

III.2.1 Learning capacity of regional local authorities. Consequences of plans, programs strategies

III.2.2 Managing quality standards due to the strive for regional/local attractiveness III 2.3 Projects and arenas of networking/partnerships in support of SMEs

5

Acknowledgements

We would like to thank all our MAP members for their support and collaboration. A special mention goes to the partner CEC – Conselho Empresarial do Centro, for providing the most valuing information in their publication Guia do Investidor da Região Centro (2004).

6

Foreword

This Report has intent to be as extensive and complete as possible, knowing that the complexity and multidisciplinary of concepts, the immense array of actors, directly or on indirectly involved, make is it difficult to map it in completely.

The information is provided at both national and regional level, regional where available and national as proxy most accurate to evidence the region reality in its support to SMEs.

We intent with this report to make a clear and understandable map of SMEs support reality in Centro region, working in a framework that this in its essence a working document to be use as a toll to improve the actors SME support in the region.

Despite the availability of data and information, numerous areas of the report are to some extent subjective and, therefore it should be kept in mind that the opinions and views expressed here may be of personal character and represents the authors’ views, experiences and perceptions.

7

I. Mapping the region

I.1 Region’s profile and attributes

->

Region’s basic data * Identify region’s basic data Table 1. Region’s basic data

Population 1.700.000 habitants (17% from Portugal total population)

Total area 23.700 Km2 (26% from Portugal surface area)

Key economic sectors and industrial branches

The economic structure has an important weight in the traditional sectors as the agriculture, which coexists with sectors well integrated in the global market competitiveness’ dynamics, as the ceramics, metallic products, moulding industry, wood agglomerates and the pulp and paper industry.

GDP and GDP per capita

Years GDP per capita em PPC (euros) GDP (M euros) 1995 73,1 80.826,80 1996 73 86.230,30 1997 74 93.014,10 1998 75,4 100.962,60 1999 77,2 108.029,70 2000 77,3 115.548,10 2001 77,2 122.549,60 2002 76,7 128.458,30 2003 74,4 130.511,20 2004 72,8 135.034,90

Type of the region. Interregional context of region’s profile * Describe the type of the region in regard to region’s cross-border boundaries and inter-regional

urban and business/industrial structure. Use the hypothetical scale and identify region’s profile: - from metropolitan core region up to peripheral rural region.

* Consequently, make a consistent description of the urban structure: - polycentric versus monocentric structure

* Identify and make short comment on the density of business locations - spatial dispersion of

business

- concentrated (in one or many centres) versus dispersed without clear pattern of concentration

* Are any identified growth poles for the future development in the region?

Growth poles can be described as specific places with concentration of capital and activities affecting positively further prosperity/growth/sustainability - according to documents regarding spatial planning and regional development strategies.

8

* The major strength and weaknesses of the business location (according to region’s strategy and other documents)

* Character of region’s productivity (more as jobless growth or more as labour intensive growth of region’s economy)

Table 2. Type of the region. Interregional context of region’s profile CHARACTERISATION OF THE REGION: COMPETITIVE POSITION AND PERSPECTIVES OF REGIONAL DEVELOPMENT The Centre Region, for its geographic position, has a central role in the articulation of the transports systems, at the national level and in its relations to Spain. However, in economical terms, the Centre region is under the centripetal forces of the two great metropolitan regions, especially of Lisbon’s Metropolitan Area, in such a way that the inter-regional articulations with the neighbour regions are stronger that the intra-regional articulations themselves. This positioning of the Centre region has clear effects on the territory’s internal cohesion, in economical, demographic and social terms, giving origin to a space of great territorial and productive diversities where coexist and are interconnected several urban systems, organised around a system of medium cities, but where the current transports and equipment infrastructures net doesn’t guarantee an effective articulation, which is reflected on the definition and afcompanieation of solidarities and of promotion of common interests between economic agents of the region and on their national visibility. Approached on a perspective of territorial differences of the economical activity, the Centre Region offers a vision of a space that shelters a very heterogeneous group of activities’ sectors, of which are highlighted the following nuclei: A group of “industrial districts”, in the northern part of the region (in close connexion with the Entre Douro e Vouga sub region; to the interior, the textile poles that try to surpass the difficulties through attempts of reconversion, not always successful); to south, the glass, moulds and plastics clusters. A certain number of “industrial platforms” and of forest resources and non-metallic materials transformative complexes (Dão-Lafões); Extensive areas of low density, occupied by forestall or agricultural activities, where some poles of industrial transformation of the region’s natural resources stand out (the areas of Pinhal Interior Norte e Sul, Beira Interior Sul e Norte); Services’ activities concentrated in four littoral cities and located in the areas of transition to the interior (Aveiro, Coimbra, Leiria and Viseu); and in the “frontier” cities – Castelo Branco and Guarda. A specific reality around Coimbra, a city strongly specialised in the rendering of health services, with some excellency domains, which has given rise to local initiatives in the sense of the creation in the region of a life sciences thematic park and of the development of a “health row”, centred in the domain of health cares, inducing a set of complementary activities. Cento Region SWOT STRENGTHS Higher education Potential (Universities and poli- technical quality and network) Technological and R&D institutions quality Health sector competences in Coimbra Telecommunications sector competences in Coimbra Good industrial dynamic in sectors like the ceramics, metallic products, moulding industry, wood agglomerates and the pulp and paper

industry Historical and architectural patrimony (specially Coimbra University) Tourism potential Natural resources (geological, water, florestal) Human resources Local actors (public and private) commitment and awareness Key role in the national territorial articulation

WEAKNESS

Strong regional asymmetries Institutional density fragmented and low regional development actors networking Insufficient transport (persons and commodities) infra-structures and intermodalitie Lacking of coherent marketing strategies for the region and its products Low articulation between the R&D network and business sector Low articulation between University and business sector Low demographic dynamics and interior regions desertification

9

Local market small dimension Low internationalization from local firms Industrial sector with short value chain Low intra-regional cities cooperation

SME low competitiveness and innovation capabilities

OPORTUNITIES

Business sector open for innovation strategies and partnerships Strong potential for some market niches (health, telecommunications, ceramics and moulding sectors) Extend the value chain in some traditional sectors (form R&D and design to selling/branding) Thematic tourism exploitation (thermal, ecological, cultural, etc.) R&D for the business sector politics and programs in course

THREATS

Competitiveness factors based on low cost production human resources (no longer functional) Others regions (East Europe, Asia) offering better alternatives for foreign investment Firms from traditional sectors disappearing (and no replacing form others sectors)

Agriculture difficulties to adapt to global markets

10

Basic business profile * Major relations (main proportions and changes):

1. Industrial sector versus service sector

Table 3. Industry and service Dynamics

Sector

2000 Changes 2001 Changes 2002 Changes 2003 Changes 2004 Changes

industry 52 % [ ⇓] ∴ 51 % [ ⇒] ∴ 51 % [ ⇓] ∴ [ ] ∴ [ ] ∴

service 47 % [⇒] ∴ 47 % [⇒] ∴ 47 % [ ⇒] ∴ [ ] ∴ [ ] ∴

Identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years 2. Modern (high-tech, knowledge–based) versus traditional, routine based industry

Table 4. Modern and traditional

Dynamics Industry


modern 30 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

traditional 70 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years 3. Large businesses versus SMEs

Table 5. Large and SMEs

Dynamics Enterprises


large 0,3% [ ⇓ ] ∴ 0,1% [ ⇒ ] ∴ 0,1% [ ⇒ ] ∴ 0,1% [ ⇒ ] ∴ [ ] ∴

SMEs 99,7% [ ⇑ ] ∴ 99,9% [ ⇒ ] ∴ 99,9% [ ⇒ ] ∴ 99,9% [ ⇒ ] ∴ [ ] ∴

Identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years Dynamics of the business * Branch structure of local business and its dynamics Table 6. Branch structure and dynamics

Dynamics Branch name


Agriculture, hunting and forestry

1,95 % [ ⇑ ] ∴ 2,35 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Manufacturing 40,07% [ ⇓ ] ∴ 36,85% [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Construction 8,63 % [ ⇑ ] ∴ 9,85 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Wholesale and sale trade; repair of motor

39,01% [ ⇑ ] ∴ 39,38% [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

11

vehicles, motorcycles and personal and household goods

Transport, storage and communication

3,22 % [ ⇑ ] ∴ 3,57 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Real estate, renting and business activities

2,55 % [ ⇑ ] ∴ 2,58 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Others (includes Education/Health and social work/Other community, social and personal services activities)

4,58 % [ ⇑ ] ∴ 5,42 % [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Name the branch, identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years Employees and prerequisites for labour market in the region * Unemployment, jobs, mobility Table 7. Unemployment

Dynamics Type


General unemployment

2 ,2 % [ ⇑ ] ∴ 2,8 % [ ⇑ ] ∴ 3,1 % [ ⇑ ] ∴ 3,6 % [ ] ∴ [ ] ∴

with academic diplomas

[ ] ∴ [ ] ∴ [ ] ∴ 10,94% [ ⇓ ] ∴ 10,26% [ ⇑ ] ∴

young people

[ ] ∴ [ ] ∴ [ ⇓ ] ∴ 17,87% [ ⇓ ] ∴ 17,01% [ ⇒ ] ∴

at the age of 55+

[ ] ∴ [ ] ∴ [ ] ∴ 18,78% [ ⇑ ] ∴ 19,29% [ ⇓ ] ∴

Unem

plo

yed

women [ ] ∴ [ ] ∴ 59,12% [ ⇑ ] ∴ 60,60% [ ⇓ ] ∴ 59,50% [ ⇑ ] ∴

Identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years Table 8. Recruitment and job opportunities (high and low demand)

Demand employees

2000 Demand 2001 Demand 2002 Demand 2003 Demand 2004 Demand

qualified [ ∴ [ ∴ [ low ⇑ ∴ [ low ⇒∴ [ low ∴

unqualified [ ∴ [ ∴ [ high ⇓ ∴ [ high ⇒∴ [ high ∴

Identify demand and mark the changes ([/∴ ) in the last 5 years Table 9. Mobility of employees - workers moving in and out

Dynamics Workers


12

moving in Non

available [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

moving out Non

available [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴ [ ] ∴

Identify proportion (%) and mark the changes ([/]/∴ ) in the last 5 years Cost of location * The average cost in comparison with neighbour regions

Table 10. Cost of location

Region Cost of:

yours (Centro)

neighbour (LVT)

neighbour (Norte)

neighbour (Alentejo)

labour 9688 (year 2002) 14070 9842 9674

housing 2051 (year 2000) 2452 2274 1783

land

hiring rooms for business activities

Put appropriate names in the headline and identify the 2004 averages (€) Legal profile in the context of making business * Describe the region in terms of:

- strong property rights legislation and enforcements - favourable contractual law and enforcement - favourable environmental legislation - favourable fiscal legislation: tax discounts, low social security contributions, exemptions

from import duties Table 11. Legal profile and making business

13

The current Portuguese Tax System was adopted in the mid-1980s to synchronize national legislation with the various directives of the European Tax System adopted within the European Community. The tax system presently in force is constituted by a set of state and local taxes levied on income, net wealth and expenditure, in addition to other taxes imposed on certain particular deeds or situations. There are also Social Security Contributions. The most important current taxes are: 1. Tax on the Income of Individuals (IRS) is regulated by the Individual Income Tax Code, as enacted by Decree-Law 442-A/88 of 30 November 1988, as amended. 2. CORPORATE INCOME TAX (IRC) Corporate Income Tax is regulated by the Corporate Income Tax Code (IRC Code), as enacted by Decree - Law 442-B/88 of 30 November 1988, with subsequent amendments, and applies to income and capital gains earned by the companies in Portugal. Scope of tax Under applicable provisions of the IRC Code the following entities are subject to Portuguese Corporate Income Tax: - Companies and other legal entities with their registered office or an effective place of management in Portugal whose main activities are carried out in the commercial, industrial, or agricultural fields. - Companies and other legal entities with head offices or an effective place of management in Portugal which carry out activities in the commercial, industrial or agricultural fields by way of ancillary activities. - Legal entities which do not have their registered office or an effective place of management in Portugal but have a branch or a permanent residence in Portugal. - Entities without either registered offices or an effective place of management or a permanent establishment in Portugal, which earn income and/or capital gains, considered to arise from a Portuguese source. Fiscal transparency Relevant dispositions of the IRC Code stipulate that taxable profits of entities with head office or effective place of management in Portugal are directly attributable to the members or shareholders irrespective of dividend distribution and taxed according to the applicable rules either of Individual Income Tax Code or of the Corporate Income Tax Code, where such entities are: - Companies incorporated under the form of Civil Companies with Commercial Capacity; - Professional partnerships; - Civil companies constituted for the management of assets, whenever the majority of the share capital belongs either to a family group for more than 183 days or to a maximum five shareholders, none of which can be a legal entity governed by public law. IRC GENERAL RATES Entity Rate (%) Resident entities or branches of non-resident entities whose main activity is of a commercial, industrial or agricultural nature: 30 % (Plus a Municipal surcharge levied by many local tax authorities,(up to 10% over the principal rate). Non-resident entities without a permanent establishment in Portugal: 25 % 3. Value Added TAX (VAT) is regulated by the Value Added Tax Code, as enacted by Decree–Law 394-B/84 of 26 December 1984, as amended. 4. Tax on property, is regulated by the Municipal Tax Code, as enacted by Decree– Law 442–C/88 of 30 November 1988. 5. Stamp duty is regulated by Law no. 150/1999 of 11 September 1999 (Stamp Duty Code), as amended Companies in Portugal are regulated by the Portuguese Commercial Code, Decree–Law 262/86 of 2 September 1986, with subsequent revisions. In accordance to the Commercial Companies Law, corporate entities abide by the law where their head office is located, and primary business location. Nevertheless, companies that have a statutory head-office in Portugal, with the actual head office and business situated abroad are subject to Portuguese jurisdiction. Companies with a foreign head office, who wish to carry out commercial activities in Portugal for longer than one year, must establish a permanent representation in the country regulated by Portuguese law. Legal phases to set up a company in Portugal 1. Define company’s principal activity & corporate name: Shareholders wishing to incorporate a company in Portugal must apply for a corporate name certificate at the Registry of Company Names (Registo Nacional de Pessoas Colectivas). After the approval of the corporate name, the Registry will issue a certificate of registration together with a provisional tax registration card. 2. Request a Public Registry Deed: Establish a date for the Public Registry of the company at the Notary Office. 3. Celebrate the Public Deed: Draw up the Articles of Incorporation and execute the company deed: these must be signed and sealed by public notary. 4. Declare Start of Activity: Once the incorporation deed has been executed, register the activity of the company at the local Tax Authorities, signed by the auditor responsible for the company accounts. Declare the start of the company’s activity at the Government tax office (DGCI – Direcção-Geral dos Impostos)

14

5. Commercial Company Registrar 6. Social Security: The new company must also register with the regional Social Security office. 7. Register the company at the Department for Trade & Competition or at the corresponding Regional Directorate of the Ministry of Economy EMPLOYMENT LAW The Labour Code, approved by Law nº 99/2003 - 27 August, revised and unified the set of laws that regulate employees, systematizing legislation to prevent the proliferation of special diplomas, given all the negative consequences these would give rise to. Regarding changes made, some flexibility was introduced to specific issues. For several matters, the Code portends an adaptation of services rendered by employees to the modern necessities of companies, namely in the work schedule, work location and tasks performed, therefore readjusting the subjacent legislation for current market forces and in this way providing business stakeholders with the tools to stimulate the much needed productivity rises to face an increasingly global economy. There are manly two Forms of Employment Contract Indefinite Term Contract: This type of contract can last indefinitely, having no preset time limit fixed by either part, terminating only under the terms set by lay. During the trial period at the beginning of the contract, any of the parts can rescind the contract without previous warning and without the need to claim just cause. In this case, there is no right to any compensation except when there is a written agreement stating the opposite. The trial period lasts for the following length: 60 days in general, or 90 days when the company has fewer than 20 employees; 180 days for employees executing technically complex jobs, jobs with a high level of responsibility or in a position of trust; The length of the trial period can be reduced if both parties desire or by collective employment agreement. Fixed Term Contract In general terms this form of contract can only be celebrated to satisfy a temporary requirement of the company and for the strict duration needed to fulfil these needs. The contracts may be of a fixed term or indefinite term. The length of these contracts, on principle is what the interested parties agree upon, yet cannot be less than six months, except in a few instances, as set by law. The termination of an employment contract may assume the following forms: End of term; Revoke; Resolution; and Denouncement. End of Contract Term A fixed term contract lapses at the end of the stated period as long as the employer or employee declares the opposite with respectively, a 15 and 8 days prior notice. An indefinite term contract ends when, upon the anticipation of the indefinite term, the employers notifies the worker of the contract end with a minimum prior period of 7, 30 or 60 days depending on whether the contract lasted up to 6 months, from 6 to 24 months, or over 24 months, respectively. The contract is also deemed to have ended upon the verification of the absolute and definitive impossibility of the worker to undertake his/ her job, or the receipt of this by the employer, or in case of retirement, illness, death of the employer, extinction or closure of the company. Contract Revoked: The employer and the employee may end an employment contract by mutual agreement. The effects of the agreement to revoke an employment contract may be annulled by the employee up to the 7th day subsequent to the respective rescinding agreement, by Resolution and Denouncement: Termination by the employees’ initiative: an employee may end an effective employment contract immediately whenever just cause is found, with the right to receive a fixed compensation of between 15 and 45 days base salary and wages for each complete year or work. Dismissal by fact attributable to the employee: an employee responsible for, in such a manner that, by its gravity and consequences, makes the continuation of the working relation practically and immediately impossible, constitutes just cause for dismissal. Collective Dismissal: the termination of employment contracts undertaken by the employer, simultaneously or successively over a period of three months, covering a range of employees, whenever this occurrence is based on the closure of one or several sections or equivalent units, or the reduction of personnel is brought about by structural or technological market forces. Renouncement: a worker may renounce a contract, independently of having or not just cause, by providing written communication with a prior notice of 30 or 60 days, depending on having, respectively up to two years, or more than two years of activity. Wages Wages can be fixed, variable or a mixture of these – a fixed part and a variable part. All workers are entitled to a minimum monthly wage, which is set each year by special legislation. A worker is entitled to a Christmas bonus equal to a month’s wage, which must be paid by the 15th of December of each year. The amount of the Christmas bonus is proportional to the length of time under employment. Similarly, the holiday wage corresponds to what an employee would receive if he/ she where in effective service. Besides this wage, an employee is entitled to a holiday bonus amounting to the base salary and any other payments connected to the job. An employee is equally entitled to receive wages corresponding to official holidays, without the employee being able to compensate this by assigning supplementary work. Work carried out during the night must be paid with an added amount of 25% relative to equivalent work undertaken during the day. This add-on may be set by a trade union agreement.

15

Work Period Normal work period cannot exceed 8 hours daily, or 40 hours weekly. Through a collective trade union agreement this limit may be raised to 10 hours per day and 60 hours weekly, without ever exceeding an average of 50 hours over a period of 2 months, with supplementary work resulting from uncontrollable causes not counting towards this limit. Foreign Workers in Portugal The foreign worker, provided with all authorizations to work in national territory, has the same rights and must comply with Portuguese labour laws. The work contract celebrated with a foreign, besides of assuming a written form, must also be communicated to the competent entity and comply with all formalities stated in the governing special legislation. However, that does not apply to work contracts celebrated between citizens from EU member countries, as well as with citizens from countries that grant equal treatment to national citizens to the exercise of professional activities. SOCIAL SECURITY Social Security is paid in part by the employer and in part by the employee. The employee’s contribution is withheld at source as per the following table:

Regime Beneficiary Beneficiary Beneficiary Employees (dependent work) 11% 23.75% Members of the management body of a company or any other legal entity (a) 10% 21.25% Self-employed workers under the minimum (mandatory) protection scheme (b) 25.4% __ Self-employed workers under the enlarged protection scheme (b) 32% __

(a) The amount of the social security contributions may be limited to 12 times the monthly national minimum wage (356,60 Euros x 12 = 4.279 euros), whereby the person concerned receives no remuneration from the company. (b) Contributions range between a minimum 356,60 (1 X the monthly national minimum wage) and 4.279 euros (12 X the monthly national minimum wage). Source: API - Portuguese Investment Agency : PORTUGUESE COMPANY LAW

16

Innovation profile * Describe the region in terms of:

- regional innovation systems (RIS) – does it work? key actors? key activities? - reported advantages of existing RIS

(use regional, local expertises and plans and other relevant documents) - RIS as support for SME- reported advantages and results

(use regional, local expertises and plans and other relevant documents) Table 12a. Innovation profile (RIS)

Portugal is not a regionalised country, except as regards the specific situation of the Atlantic archipelagos of Azores and Madeira. Therefore, there is not a consistent regional approach to innovation policy. There are no regional operational programmes for Continental Portugal. In spite of the exercises of diagnosis of regional innovation capabilities and strategy definition undertaken under RITTS – which led, for instance, to the launching of NORTINOV, LISACTION and INOVALGARVE programs–, it would not be correct to argue that there are ‘true’ regional innovation strategies in Portugal. Assuming that an innovation strategy exists, it is national, not regional.

A ‘decentralisation package’ was launched in 2003, with four main features: the definition of a new legal framework for Metropolitan Areas (associations of Municipalities around a large, focal town), laid down by Law 10/2003, of 13 May; a new regime for the creation and activities of inter-municipal communities, established by Law 11/2003, of 13 May; the transfer of several competencies from Civil Governors (representatives of the central Government in territorial districts); and a change in the structure and functions of Regional Co-ordination Commissions. So far, these have been the regional bodies with a say, though limited, in the area of innovation policy.

So we’ll refer here to the Portuguese national innovation system (NIS), as a proxy to a Centro RIS, as Centro firms and R&D organizations have a substantial participation on it.

Here, in the views of the authors of the report European Trend Chart on Innovation, Annual Innovation Policy for Portugal, Covering period: September 2003 – August 2004, NIS is defined as a network of organisations, individuals and institutions which contribute to generate, develop, absorb, share and use economically useful knowledge in a given territory – and which, in turn, shape the process of innovation and its performance in economic terms, and where firms are the key players of NIS: here in this view, NIS is much wider than an R&D system, and is not concerned with knowledge generation only; and is necessarily connected with players located outside the national territory.

This NIS definition considers five main categories of institutions: (1) enterprises; (2) the institutes in charge of education, training and R&D activities, including namely Universities, University-based bridging units, and public laboratories; (3) support and consultancy organisations, such as technological centres, S&T parks, incubators, technology brokers and consultancy firms; (4) the financial system, including banks and venture capital organisations as well as business angels; and (5) public administration, including state agencies in charge of specific industries or issues (e.g. industrial property, innovation policy, training and SMEs).

The analysis of the Portuguese NIS shows the existence of several positive aspects: (1) a relatively large number of players, especially in the areas of technology support and inter-face organisations, some of them with a very good performance; (2) the improvement in the capabilities and evaluation processes of University research organisations; (3) the increased experience of public institutions in the design and implementation of operational programmes; and (4) the existence of a thin ‘crust’ of internationally competitive, innovative companies as well as some dynamic clusters.

There are, however, significant weaknesses which constrain the behaviour of the NIS as a whole.

Three types of weaknesses deserve to be mentioned. First, the weak links among the various groups of players. This is, to a large extent, a result of the interplay of three factors: the lack of a co-operative attitude and behaviour, a historical trait which has long since conditioned the development of the country; the myopic perspective of many players, focussing on short, instead of long-term gains; and the lack of credibility of some organisations. Second, the limited in-house capabilities of many players. This is evident not only at company level, but also with regards to the education and training system, technology interface and support organisations (where marketing capabilities are low), the financial system (where there is a lack of experienced evaluators of innovative projects) and public administration. The shortage of capabilities is a consequence of a wider problem: the shortcomings in education, training and human resources skills. The third main weakness is the lack of a clear understanding of the systemic nature of innovation and, therefore, of the main tenets of an outwardlooking innovation policy. In spite of the pioneering experience of PROINOV (now abandoned) and the improvements achieved in the co-ordination of policies and implementation mechanisms of the Ministers for the Economy (MEC) and for Science and Higher Education (MCES), innovation is still often envisaged from a linear perspective, thereby leading to biased and limited approaches towards innovation policy.

Sources: European Commission, Enterprise Directorate-General (2004), European Trend Chart on Innovation, Annual Innovation Policy for Portugal, Covering period: September 2003 – August 2004, Innovation/SMEs Programme

17

* Describe the region in terms of:

- innovation centres: o technological parks, industrial parks- o public R&D centres o private R&D connected to large companies

(identify and make brief description) Table 12b. Innovation profile (innovation centres)

The Region has a significant group of support and technological structures that develop a fundamental role of support and promotion of competitiveness of the productive areas to which they concern. Besides the centres connected to the universities, are highlighted a set of support and technological development centres in several domains (ceramics and glass, moulding and special tools, textiles and clothing, telecommunications, biomass for the energy, graphical computation,…).

These entities are essential for the reinforcement of the regional competitiveness, for the competences they detain and develop, for the interface function between the companies, universities and administration entities, for the cooperation and interchange of experiences at the national and international level.

The higher education in Centro Region is assured by three state universities, Aveiro University (http://www.ua.pt/), Coimbra University (http://www.uc.pt/english/) and the Beira Interior University (http://www.ubi.pt/). The region also possess some private universities (The Catholic University in Viseu and the International University in Figueira da Foz). There are also six poli-technical institutes in the region, located in Aveiro, Castelo Branco, Coimbra, Guarda, Leiria e Viseu. Centro region possesses a technological offer that reflects the region production specialisation pattern: a technological centre (t.c) for the textile industry in Covilhã (CITVE), a t.c for the moulding industry in Marinha Grande (CENTIMFE) and a t.c for the ceramics and glass industry in Coimbra (CTCV). As technology transfer and interface between business and the universities, there is the Instituto Pedro Nunes from Coimbra University and the GrupUnave form the Aveiro University.

Communication standards * Describe the region in terms of:

- ICT’s regional cover (density of broadband connections, percentage of frequent internet users)

Table 13. ICT’s regional cover In terms of Accesses to the Internet, of broad band, there are in Portugal two kinds of services: the ADSL and the CABLE, served, respectively, by the two main national operators, TELEPAC and TV CABO, which belong to the PT group. According to the Portuguese Association for the Communications Development, “(…) in the end of 2003 the penetration in the broad band, in ADSL and Cable accesses, per home, reached the 10%, having the PT group 85% of the ADSL clients of the market (…). Also counting the cable, the quota of the incumbent was of 75%”. There are in Portugal almost two tens of operators of Cable distribution nets, as well as six tens of companies. The effective availability of the access to the broad band Internet in the national territory is a relevant factor in the analysis of the service’s penetration rates, being often invoked to explain the relative penetration deficit identified above. The situation of the access to the broad band Internet in the Portuguese continent in 2004, when the councils effectively info-excludes represented values inferior to 10%. Penetration of the access to the Internet in broad band, access to the Internet and PC According to the gathered information, in December 2004, almost 17,3% of the Portuguese homes had access to the broad band Internet. The Lisbon and Tejo Valley’s region is that where the penetration of the accesses to the broad band Internet reaches the highest value – 25,2% of the homes have broad band accesses. Alentejo presents the more reduced penetration level – only 7,9% of the homes have broad band. According to the obtained results, 29,8% of the homes had access to the Internet (broad or narrow band) in December 2004. Table 13.1 – Penetration of the accesses to the Internet in broad band by region

Region Percentage of homes with Internet Percentages of homes with broad band:

18

North 24,4% 12,3% Center 25,0% 14,4% Lisbon and Tejo Valley 36,5% 25,2% Alentejo 20,8% 7,9%

Geographic distribution of the accesses to the broad band Internet

With 36,6%, Alentejo is the region with lower percentage of broad band accesses.

In the North, less than a half of the accesses to the Internet are broad band (46,5%). In the rest of the regions, more than a half of the accesses to the Internet is made by broad band, being highlighted Lisbon with 61,5% of the accesses6.

Table 13.2- Proportionof broad band accesses by region Region Percentage of Broad Band Accesses

North 48,8% Center 57,0% Lisbon and Tejo Valley 67,0% Alentejo 36,6% Total 58%

The penetration of the access to the Internet in broad band in the littoral region is almost of 21,2%, value significantly superior to the registered in the interior of the country - 8,5%.

- capacity for interactive governance through portals and other kind web-based

infrastructure (refer to results from various inquiries and expertises elaborated for the region)

Table 14. Web-based infrastructure

19

The website PMElink (www. pmelink.pt)is a private project, working as a Business centre online, destianted to support SME all theirs business areas. It is promoted by two major banks and a communications company, and has a vasta array of information for SME’s. The business model rest on the two services: free important information associated to e-business portal for SME needs, providing products and services for SME at a lower cost. At national level, but used and produced at national/regional level, we can find like the web site of IAPMEI, created in order to improve SMEs’ access to information on markets, financial instruments, legislation, and the economic and financial environment., and the Portal do Cidadão (http://www.portaldocidadao.pt/), a web portal providing information on a wide range of matters (creation of companies, taxes, tourism, administration, etc.) involving information from approximately 50 administrative services. The CFE - Centros de Formalidades de Empresas (Business Formality Centres) website (http://www.cfe.iapmei.pt/) has a vast array of information in the procedures of setting up a business, including all necessary steps, and specialised technical information. At regional level, the main initiative can be found at the CEC – Conselho Empresarial do Centro web page (http://www.cec.org.pt), as the Centro enterprises knowledge net.. The project started with a creation of a net of Cabinets to support SMEs competitiveness, based on a technological infrastructure of knowledge, communication and information: CEC’s NetCentro intranet/extranet, and as evolved to a the main information website for Centro Region SME’s; or an initiative form NERCAB (:http://www.portugalcentro.pt/), whuch works as a directory for the firms in Centro Region and general information about the Region itself (please see table 73a for more information)

In an analysis of the positioning of the Centre Area organisms websites in relation to the Rest of the Country, it is verified a balance in the percentage of websites classified with Good of the two analysed areas. The Centre Area presents 55% of organisms with the classification of Good, in comparison with the 51% of organisms of other areas of the Country. The Rest of the Country has a clear advantage in relation to the Centre Area in the websites classified as Very Good (23% against only 12% in the Centre Area).

On the other hand, there is a wide percentage (29%) of websites of the Centre Area with the classification of Insufficient (more 3% than in the Rest of the Country) and there are even 5% considered Very Insufficient, classification that is not given to any website of the Rest of the Country.

In what concerns a global appreciation of the web presence of the different organisms, such indicates great inequalities in the Centre Region, there being an unbalance in the attention and expended effort in the AE side by the entities of the region.

Once again, comparing criterion by criterion, one understands some balance in the obtained classifications, even though the Centre Area accompanies with some delay the tendency of the Rest of the Country, in what concerns the several points in analysis.

In all the criteria, there is always an advantage of the remaining areas of the country concerning the classification of Very Good, while the Centre Area has almost always a higher percentage in the classification of Good. In the sum of both classifications, for almost all the criteria, there is a very big balance in all the Country.

20

It is in the criteria of Presentation/Graphical Quality and Updating, however, that the Centre Area presents considerably worse classifications. There is a difference of more 14% of websites in the Centre Area classified as Insufficient or even Very Insufficient in what concerns the Presentation/Graphical Quality and there are more 17% of websites in the Centre Area classified with level of Very Insufficient Updating.

7% 19% 43% 31%

3% 9% 49% 40%

33% 19% 24% 24% 34% 20% 14% 31%

10% 19% 52% 19% 26% 46% 29%

40% 5% 12% 43%

23% 6% 14% 57%

81% 19% 66% 34%

Centre Area

Rest of the Country GRAPHICAL PRESENTATION

Centre Area

Rest of the Country BROWSING

Centre Area

Rest of the Country

INFORMATION/CONTENTS Centre Area

Rest of the Country

UPDATING Centre Area

Rest of the Country

ACESSIBILITY

Comparison, by criterion: CENTRE AREA vs REST OF THE COUNTRY

Very Insufficient Insufficient Good Very Good

21

- transportation-road system, railway system, water-based transportation, aviation

(describe their usefulness for business with focus on advantages o disadvantages for SME - refer to relevant expertises produced for the region)

Table 15. Transportation infrastructure

The existence of good accessibilities (e.g. highways, railways, sea and air), capable of improving the circulation of people, goods and services, is a key element for the establishment of any activity in a certain place, constituting one of the factors of promotion of a region.

In a small country like Portugal, the analysis of the transport infrastructures must report to the set of the country, namely in what concerns the infrastructures of bigger capacity, like the airports. The Centre Region presents a centrality towards the Country that places it in a privileged position for the access to the national infrastructures and to Spain.

At the national level, the fundamental structure of articulation of the territory and the urban system is constituted as follows:

a. North-South Littoral Corridor:

Integrates the so-called “Galician-Portuguese Corridor”, reinforcing the connections of the Centre and North of Portugal to Galicia, promoting a bigger centrality of Porto Metropolitan Area. This Corridor also reinforces the centrality and the articulating role of the Lisbon and Tejo Valley Urban System in the national territory;

Integrates the IP1, from the Valença’s frontier to Castro Marim’s frontier; integrates the railways of Minho, of North and of South; the airports of Porto, Lisbon and Faro, which allow the aerial connections between the three cities and from these to the exterior; the ports of Viana do Castelo, Leixões, Aveiro, Lisbon, Setúbal, Sines, Portimão and Faro, which constitute the base of the maritime connections of goods, in the national territory.

b. Transversal and Diagonal Structuring Axes:

The �IP5/IP3 and IP7 articulate the Littoral and the Interior and establish the main terrestrial connection with Spain and with Europe. The IP5 Axis also integrates the Beira Alta Railway. To these axes are added a set of “diagonals” of which are examples: the Douro diagonal, constituted by IP4 (Porto – Vila Real - Bragança - Quintanilha) and by IP3 (Vila Verde da Raia - Vila Real - Lamego - Viseu - Coimbra - Figueira da Foz); the Vale do Ave Diagonal, constituted by IC5 and IC25; and the Tejo Diagonal, constituted by IP6 (Peniche - Castelo Branco) and by IP2 (Bragança - Faro) and the Beira Baixa Railway;

The two North Diagonals allow the connection to Spain and to the AutoVia das Rias Bajas

Through the frontier of Vila Verde da Raia; the Tejo Diagonal has conditions to be the main connection from Lisbon and Tejo Valley Region to the Vilar Formoso frontier; it is along these axes and structuring diagonals that are verified the most significant territorial dynamics.

c. Axes of Territorial Cohesion:

IP2 constitutes a cohesion axis in the interior of Alentejo, being able to guarantee good articulation conditions from the cities of Beja and Portalegre to the structuring axes IP1, IP7 e IP6;

The IP2 branches, between Guarda and Bragança, of IP4 (Macedo de Cavaleiros-Vila Real) and of IP3 (Vila Real-Viseu) constitute a net of articulation and integration of the Northeast in the National Structuring System.

The Centre Region as, comparing to the continent, good highway and railway infrastructures, which allow it to take advantage of its centrality towards the two main national airports and some ports.

It is observed that the contiguity of some cities of the region assured by the several existing travelling axes, as well as by secular relations and traditions, is on the base of the formation of small structured axes with a demographic and economic dynamism that induces interdependencies and significant internal changes. It is estimated that ¾ of the region’s population lives less than 30 minutes away from the main cities, which allows concluding the existence of a well structured and operational net of accessibilities. The referred structuring axes are �Guarda-Covilhã-Fundão-Castelo Branco, �Aveiro-Ílhavo (including Vagos, Oliveira do Bairro and Albergaria), �Coimbra-Figueira da Foz (including Lousã-Miranda do Corvo-Cantanhede-Mealhada), �Leiria-Marinha Grande (with extensions to Pombal and Batalha), the urban constelation centred in Viseu and that includes Mangualde, Nelas, Oliveira de Frades, S. Pedro do Sul; and Tondela, �Oliveira do Hospital-Seia-Gouveia, which used to have more relevance when the “Estrada da Beira” was the main travelling axis of the region.

The national railway infrastructures are distributed by a group of structuring lines: Minho Railway, North Railway, Beira Alta Railway, Beira Baixa Railway and South/Algarve Railway. These railways present ramifications having in view to serve their involving, both in the transport of passengers and of goods. The main railways have the following characteristics: The North Railway is the one which present a generally a better quality, in physical terms (double way and total electrification of the railway). The Beira Alta Railway presents a good general level of infrastructures and the rest of the railways present, despite some debilities, enough conditions to satisfy the respective needs of the regions they are set in. In the Beira Baixa Railway were developed the modernisation Works of this Railway, allowing the reduction in almost 40 minutes in the time of the trip between Lisbon and Castelo Branco and almost 50 minutes to Covilhã.

22

The Centre Region presents, towards the Continent, a good endowment of explored railways, representing 27% of the total of the railways. Of the total extension of explored railways in the region, 26% are of double way or superior and 60% are electrified, as the second region with higher percentage of double way railways, region with higher percentage of electrified railways.

The port infrastructures in Continental Portugal are centred in tem commercial ports; five main ones (Leixões, Aveiro, Lisboa, Setúbal and Sines) and five secondary ones (Viana do Castelo, Figueira da Foz, Portimão, Faro and Douro). The Centre Region presents a relatively good endowment of port infrastructures, detaining a main port (Aveiro) and a secondary port (Figueira da Foz).

Aveiro’s port is in phase of restructuring, with several projects co-financed by Structural Funs, aiming at the development of the several terminals (of solid and liquid bulks, of fish discharging and of services quays), including among them a ro-ro terminal: a port infrastructure specialised for the maritime traffic of ro-ro discharge (transport t f conditioned charge in semi-tows). It is also foreseen for Aveiro’s port the development of terrestrial accessibilities, as for instance the railway access and of the multimodal platform in Cacia.

Besides the commercial ports mentioned above, there are also in the Centre Region two important fishing ports, the ports of Peniche and of Nazaré.

In terms of Airport Infrastructures, the airport activity in Continental Portugal is located, mostly, in three infrastructures: the airports of Porto, Lisbon and Faro.

The Centre Region, despite not being endowed with an international airport, presents a clear centrality towards the two main national airports (Lisbon and Porto), being also endowed with several civil air-fields (Leiria, Coimbra, Aveiro, Viseu and Covilhã) and a military one (Monte Real).

Source: CEC – Conselho Empresarial do Centro (2004), Guia do Investidor da Região Centro

Some other specific attributes * Identify the facts and evaluate their economic impact on SMEs:

- Are there any large foreign/ international companies - retaining and/or extending demand

for local SME products/services? - Are the key clusters of the region stimulating growth/profitability of SMEs? - Are there any clusters with prevailing participation of SMEs?

Table 16. Additional attributes in the region

The sectors from wood agglomerates and the pulp and paper industry are largely dominated by large firms, national in the wood

agglomerates and international and national companies in the pulp and paper industry; The Key cluster of this region stimulating growth/profitability of SMEs are more in sectors like the ceramics, metallic products, and

moulding industry.

23

Region’s attractiveness/uniqueness * Identify unique local advantages, capabilities and potentials of the region

(use regional, local expertises and plans and other relevant documents) Table 17. Unique advantages, capabilities and potentials

Higher education Potential (Universities and poli- technical quality and network)

Technological and R&D institutions quality

Health sector competences in Coimbra

Telecommunications sector competences in Aveiro

Good industrial dynamic in sectors like the ceramics, metallic products, moulding industry, wood agglomerates and the pulp and paper industry

Historical and architectural patrimony (specially Coimbra University)

Tourism potential

Natural resources (geological, water, forestall)

Human resources

Local actors (public and private) commitment and awareness

Key role in the national territorial articulation

* Identify niche products/services/processes presenting unique and positive attributes of the region

(use regional, local expertises and plans and other relevant documents) Table 18. Niche products/services/processes

Good industrial dynamic in sectors like the ceramics, metallic products, moulding industry, wood agglomerates and the pulp and paper industry;

Health sector competences in Coimbra;

Telecommunications sector competences in Aveiro;

* Are there any new investments/arrangements with ability to change the attractiveness of the

region and supporting its image/prestige/status? (use regional, local expertises and plans and other relevant documents)

Table 19. New investments/arrangements and attractiveness change

24

Parkurbis – Parque de Ciência e Tecnologia da Covilhã: Parkurbis – Parque de Ciência e Tecnologia da Covilhã SA aims at developing new industries in the region attracting national and foreign investors, offering the traditional industry the acquisition of innovative capacity, diversifying and improving the manufacturing equipments and technologies, incorporating new technological advances. The main goals of Parkurbis are creating the conditions for the development of new technological-based activities, assuring a dynamic interconnection between the Beira Interior University (UBI) and the business net, in order to approach the offer of R&D with the needs of that business net. Parkurbis is location in Tortosendo Industrial Area, was constituted in 17th September 2001, and has a Park Area: 100.000 m2 Its facilities are a - Business Innovation Centre; - Spaces for Technological-Based Companies to establish; Ideas and Businesses Incubation Centre; Technological Investigation Rooms; Laboratories; Auditory for 200 places; and a Multiuse Area (exhibitions, workshops). Tecnopolo de Coimbra: The Coimbra’s Science and Technology Park is managed by the Associaçáo Tecnopólo de Coimbra, a non-profitable associate, which is connected to the University of that city. The association was born in 1998, having as founders the University of Coimbra, the Coimbra’s Poly-technical Institute, the Coimbra’s City Council, the Commercial and Industrial Association of Coimbra, the InstitutoPedro Nunes and the Faculty of Sciences and Technology of the University of Coimbra. The society has as object the implementation, management and administration of business, scientific and technological parks and the support to the economic and business activity in general. OPEN – Oportunidades Específicas de Negócio: OPEN – Associação para Oportunidades Específicas de Negócio is a non-profitable private institution, created in November 2002, with the aim of promoting the innovation and the employment, through the support to the launching of innovative business initiatives. The Project has its materialisation with the creation of a Business Opportunities Incubation Centre in Marinha Grande, region characterised by a strong entrepreneurship and business dynamic, but where it is strategic to promote the reinforcement ant the statement of the enlarged value chain of the Regional Industry, through the launching of new companies of high technological incorporation and strong innovative character in the sense of rejuvenescence of the business net and of the unemployment prevention. OPEN has as founding associates the City Council of Marinha Grande, Centimfe, Cefamol, ANJE and Inova, Systems Engineering, Lda. Nowadays the Association has already 50 associates, among City Councils, Universities, Associations and Companies, being an attraction pole of new business projects and development motor of new ideas, namely in the financial plan, which bring to entrepreneurship innovative tools like the Risk Capital, Business Angels Club, Seed Capital and Venture Capital. The target groups that OPEN wants to comprise are mainly companies with innovative projects in areas both industrial and of services; promoted by young people, highly qualified in beginning of carrier and with entrepreneur spirit and/or researchers and other professionals with high potential for the transposition of Knowledge, Experience and Competences. Associação Incubadora Beira Atlântico Parque: The Associação Incubadora Beira Atlântico Parque is a non-profitable association constituted on November 15th 2002, by the Beira Atlântico Park Association and by Mira City Council. The Beira Atlântico Park Incubator is set in the sub-regional development logic defined for the territory delimited by the cities of Coimbra, Figueira da Foz and Aveiro, and establishes synergies with the rest of the incubators and universitary and technological research units there established. In that sense, and because there is foreseen the construction of a Technological Park with central facilities in Cantanhede, it will be possible to reduce some valences to a more limited dimension. The Beira Atlântico Park Incubator, such as the Park, wants to privilege the sectors as the biotechnology, Genetics, New Materials, Electronics, Telecommunications, Computers, Internet and Multimedia Products, benefiting from the great scientific development made in these domains by the Universities and Research Centres of Coimbra and Aveiro. Mira’s Business Park is constituted by a group of offices buildings, adequate to companies’ headquarters and administrative, commercial and development services, and by industrial lots designed for companies with manufacture, storage and logistics facilities. Set in the Regional Project of the Beira Atlântico Park, the Mira’s Technological Pole has a group of lots and buildings for establishment of technological-based companies, in an environment favourable to research, sharing of experiences and development of relations nets and indispensable knowledge to the making of partnerships and global scale businesses. Integrating the Companies’ Incubators, and adjacent to the Mira’s Business Park, the Mira’s Technological Pole has high level technical and of support to businesses easiness, and offers the better conditions for the creation of nets and partnerships between companies and Research centres.

Incubadora D. Dinis - Associação para a Promoção do Empreendedorismo, Inovação e Novas Tecnologias (IDD):

The D.Dinis Incubator – Association for the Promotion of Entrepreneurship, Innovation and New Technologies (IDD) will begin its implementation process in 2005. IDD is fruit of a partnership between IPL – Leiria’s Poly-technical Institute, Leiria’s City Council and NERLEI – Business Association of Leiria’s Region and appears within the Strategic Plan for the Creation of Leiria’s Competences’ Centre. This study put in evidence the need of creation of a companies’ incubator in the Region, as key for the foment of technological-based entrepreneurship. With the aim of filling in that gap, IDD is born with the mission of “supporting the constitution, establishment and development of new technological-based companies, giving them technical and physical adequate conditions, contributing for the dynamisation and rejuvenescence of the Region’s business net”.

The creation phase will have a duration of 24 months, during which will be defined the Incubator’s procedures, will be held promotion

25

actions and will be selected the companies to be incubated. The structure must be fully functioning in January 2007.

The companies to be sheltered must be of technological base, employ qualified workmanship and have non-aggressive for the environment Technologies. Will be adopted as selection criteria: originality and innovative character of the project, reasonability, feasibility and economical viability, the social relevance, the degree of involvement of the candidates, the adequacy idea promoter/ Project-region and also technical, technological and of market factors that may condition the success of the initiative.

In the day it was constituted, the IDD admitted as founding associates the National Association of Young Entrepreneurs, the Foundation Professional School of Leiria, Movicortes, SA, Balbino & Faustino, Lda., Adelino Duarte da Mota, SA, Agricortes, SA, Exposalão and Leirisic. It is foreseen that in short term other institutions come to integrate this project, namely Pedro Nunes Institute, which has already taken part in the Plan.

IPN INCUBADORA – Associação para o Desenvolvimento de Actividades de Incubação de Ideias E Empresas Since 1991, Insitituto Pedro Nunes (IPN), a transfer technology association located in Coimbra, promotes the creation of spin-off companies by giving support to innovative and technology-based ideas generated by its own laboratories, institutions of higher education, particularly the University of Coimbra, the private sector, and RTD projects in consortia with industry. The incubator provides companies with an easy access to the scientific and technological system and an environment which allows the development of knowledge in such areas as quality, management, and marketing; it also facilitates contacts with national and international markets.

Our provided support consists of technical orientation for the constitution phase and start of the company; physical space (12,5 m2, 25 m2, 30 m2 or 50 m2) for installation; logistic: conference rooms, post office, telephone, fax, Internet, photocopies; networking and contact with diverse national and international R&D institutions; privileged synergies with the University of Coimbra knowledge groups; access to financial information and other sources of knowledge, and access to training actions in technological and management areas.

In 2002, IPN has autonomised the incubations activities, creating a spin-off institution called IPN Incubadora - Associacao para o Desenvolvimento de Actividades de Incubacao de Ideias e Empresas, and start the construction of a new building infra-structures, that will double the incubation area (2.800 m2 total area, 1.620 m2 incubation area)), which will allow the incubation of more than 50 companies and the ability to incubate small pre-industrial/ laboratory companies. The main partners of IPN INCUBADORA are Instituto Pedro Nunes and the University of Coimbra.

Parque Industral de Mortágua / Incubadora de empresas:

The strategy for Mortagua region is based on the infrastructure creation, considered to be an important platform for the competitiveness of local economics activities, for which the Industrial Park and the creation of the "Firm’s Nest" of Mortágua, and incubator for local business, are examples. The Industrial park will grow in more than 100.000m2 area expansions, as the new Mortagua incubator" will receive and support the entrepreneurs generating ideas, firms in the constitution phase and new born companies, giving priority to young entrepreneurs and tech based.

Parque Industral da Figueira da Foz / Incubadora de empresas:

A Figueira ParaIndústria, s.a. was constituted in October 2000, having as goal to promote the installation of firms in the industrial park of the Figueira da Foz, contributing to a sustainable development in the region Its shareholders are to the City council (65%), the API Parks - Gestão de Parques Empresariais, SA (30%), the ACIFF, industrial association of the Figueira da Foz (5%) The meeting of these partners had as objective to congregate public entities responsible for the regions economic development with the private initiative, detainee of industrial areas management "know-how". To solve the gap between labour market demand and local human resources offer offer, the board integrated the two local universities. This industrial park has a technologic profile, giving preference to projects that increase the local technological capabilities and human capital. The Figueira Paraindústria will also promote and tech-based incubator centre, which will give human and technical support ot new born firm, and also a technological school to provide technicians with skills in the areas most needed for this firms (electronics’, moulding, production control, etc). Parque Empresarial do Mundão: The Parque Empresarial do Mundão (Mundão industrial park), it is located in Viseu District, and started in 2001. It is promoted by Park-Invest - Sociedade Promotora de Parques Industriais, s.a., the City council of Viseu and the AIRV - Enterprise Association of Region of Viseu. It has for goals the the conception competes, promotion and commercialization of industrials spaces, and the management of the park facilities. Parque Industrial de Castelo Branco The economic structure of Castelo Branco district has suffered to significant alterations in the last years, registering a growth trend on

26

activities of the industrial sector, commerce and services, in detriment of the importance of the agricultural sector. The Industrial Zone, with an area of 158 hectares and 108 installed companies, employing 3500 people, will evolutes into a Enterprise Centre with 122 hectares and a set of infrastructures and services more sophisticated, with a stronger technological component, capable to create qualified jobs and to generate synergies with Polytechnic and Universities.More than a hundred of companies occupy the 158 hectares of a multipurpose area, from SME to large companies. The new Enterprise Centre will have, also, a new model of management - a company of public and private capitals will define the strategy and the organizational model of the space. This managing society will have in its objectives the dynamism of this new equipment, with prominence for entrepreneurship support projects.

It can also be mentioned Guarda Industrial Park, (Parque Industrial da Guarda) an area of 16.000 m2 , where NERGA, Guarda district industrial association is located.

* Is the role of SMEs sector perceived as essential for strengthening of the positive uniqueness of

region’s profile? (make your comment against the regional, local expertises and plans and other relevant documents and materials)

Table 20. SMEs and positive uniqueness of region’s profile

Characterising the industrial profile of the Portuguese regions based on the relevant competitiveness factors for the competition analysis of the external market (working cost, natural resources, scale economies, product’s differentiation, R&D), the Centre Region clearly distinguishes from the medium pattern of the rest of the country, with a clear predominance of the industries centre in the exploitation of natural resources. As a matter of fact, it is the only sector where the Centre is “over-specialised”. This characteristicof the Centre Region industrial profile is determined by the pattern of the Pinhal Interior Sul, Pinhal Litoral, Dão-Lafões and Baixo Mondego sub-regions, which can be observed when that sub-region indicator is decomposed. The situation is different in the Cova da Beira and Serra da Estrela sub-regions, where the weight of the textile industry explains that the competitiveness factor revealed is the workmanship cost. Finally, it is highlighted the relative presence of industries that incorporate a product’s differentiation logic in the Beira Interior Sul, Beira Interior Norte and Baixo Vouga sub-regions.

The analysis of the productive structure of the Centre Region also reveals a considerable dynamism of some NUTS III in the industrial area. Those are the cases of the areas that configure an “industrial district” structure type (Águeda, Aveiro, Marinha Grande), which set their dynamism in a noticeable business ability, even in situations where one can’t see clear location factors, namely the domain of the accessibilities. To this respect and as example, the Leiria-Marinha Grande axis is an exemplar case of a high business dynamic, even in a context of deficient transport infrastructures. From here it mustn’t naturally be concluded that that shows the irrelevance of the transport infrastructures, but maybe it can be stated that the competitive ability of those industries would be higher if the region had adequate infrastructures, thus powering the endogenous business abilities that characterise the region. Source: CEC – Conselho Empresarial do Centro (2004), Guia do Investidor da Região Centro

Regional/ Local competitive advantages

* Is there a clear view and strategic orientation on regional profile and its anticipated changes

due to expectation on further development?

27

Table 21. Strategic orientation of the region

The new territorial dimension of the politics, shaped by a more demanding, complex and global competitive model, implies the transformation of the economical politics in the sense of the afcompanieation of the new structural and horizontal politics (centred in the seek for the collective effectiveness in open and loyal competition markets) in prejudice of the traditional sectarian politics (more connected to the management of the relation between supply and demand).

Simultaneously, the deepening of the territorial-based competitiveness presupposes the development of forms of competition between companies and between territories, within wider spaces, which isn’t necessarily translated in games of nil sum but, on the contrary, it must imply the strengthening of the cooperation bonds between the several internal and external economic actors to a certain territory, producing, most probably, games of positive sum. The recent economic evolution shows several examples in that sense. The most paradigmatic is, undoubtedly, the formation of clusters around a nuclear activity, where coexist competitor companies in the same type of offer, which take advantage of the local productive structure which is organised around those nuclear activities. In this context it becomes necessary a new development model for the region which creates a new centrality, in coherence with the national development model, offering a productive structure modern and well-integrated in the market, internal and external, developing competitive exporting clusters, where the investment external to the region has an important role to perform. In this sense, it is possible to identify a group of key factors that it is important to consider and mobilise while essential elements of a new development strategy for the Centre Region (please see Table 22. Major competitive advantages).

* List out and describe the major competitive advantages to be identified by the politicians

(according to the major documents viewing development strategies and works on vision and image of the region)

Table 22. Major competitive advantages

It is possible to identify a group of key factors that is important to consider and to mobilise while essential elements for a new development strategy for the Centre Region:

To take advantage of the central geographic position while articulation territory between the North and the South, and of the country with Spain. The construction of the structuring corridors, as well as the location in the region of logistic platforms, the central position of Aveiro’s port and the future construction of the new Lisbon’s airport south of the region will contribute for creating single conditions of attraction and retention of economic activities in the region.

To manage the natural and environmental resources in an economic perspective respecting its conservation and reproduction. These resources, which are already in the base of the region’s main productive branches, are still far from their potential economic improvement. The management of the forest didn’t have until now an effective solution by the State, in a context where the atomised nature of the familiar exploitations makes impracticable a rational management of the resources.

Orientation of the teaching and Professional training system in the sense of the intensification of the relation with the society in order to guarantee the training, in a large scale, in the essential areas that can attract and sustain the growth of new activities, and also has factor of fixation and demographic attraction.

A pattern of infrastructures that must give consistence to the articulation model of the several territorial urban systems and of the local productive systems, in a base of complementarity in the access to the equipments and productive and social infrastructures. The concept of infrastructure is here understood in a concept wider than the traditional, comprising not only the physical infrastructures (where are still to be finished large investments) but also the institutional infrastructures that assume a growing importance in the viability of the new productive paradigm (technological centres, nests of companies, business location areas, administration structures of support to the private sector).

The valorisation of the traditional activities of the region set in the agro-nutritious branch (dairy products, preservation of fruits and horticultural products, beverages), important for the maintenance of the primary sector, but made viable through the increasing of the storage and cold preservation capacity of fresh and frozen products, and improvement of the access to the internal and external markets;

In the textile/clothing branch, and especially in the knitting confection, it seems more evident that the pure subcontracting model begins to be worn out, mainly in the cases where it is based exclusively on the working cost by unit of time. It is thus defended that the strategy to be followed must pass for the dislocation of the purchases, assuring the companies the production phases that represent a bigger added value, and dislocating the remaining phases for other regions, namely to the Mediterranean basin.

In the tourism domain, there is a potential to be developed and promoted, which passes by the afcompanieation of a touristic offer based on the patrimony, on the landscape, on the hydric and thermal resources. The region has excellent natural and environmental conditions for the development of thermal tourism, not in the traditional perspective, but in the base of the development of new concepts that include the concept of “health hotel”, which associates leisure, benefiting from the excellent environmental conditions of the region, and the alternative therapies (taking advantage of the thermal resources).

The natural and adventure tourism finds in the Centre Region single conditions for its development, taking advantage of the Serra da Estrela and Vale do Côa parks. The improvement of the accessibilities, both in relation to the metropolitan areas of Lisbon and Porto

28

and in relation to Spain, opens good integration perspectives of the Centre Region in the touristic circuits.

The value chain of the primary sector must evolve in order that the focus is made on the distribution, mainly in the organisation of the relation between the small producers and main distribution channels: big surfaces (in the internal market) and exportation. The net of supplying markets, still to conclude, constitutes an important step in the sense of making easier the concentration of the production in conditions of higher transparency of the market. The evolution of the forestall sector depends mainly on the ability of improving the forestall management ability (At the national level there are almost 400000 forestall producers, of which 85% have exploitations with areas inferior to 3 hectares), in part through the associative organisation of the producers and the increasing of the exploitations’ dimension. Without that question solved the forestation and reforestation goals aimed by the continuity of the Forestall Development Programme will not be made viable (now within the III QCA) and which point to 200000 ha (accumulated until 2006), to which is linked the forestation of the agricultural lands, also of the same greatness. In any case, the new legal instruments that aim the management and distribution of the forest (Forestall Management Plans and Forestall Distribution Regional Plans) must have a deciding role in the recovery of the sector.

The bet in innovative products and services, of national origin, innovating at the level of the design and marketing, through the creation of own brands that translate the identity of the regions of origin or that identify products with a quality pattern recognised in the market;

Involvement in international production chains, in the base of the subcontracting regime, taking advantage of the multinational companies strategy, based on the segmentation of the productive process, and on the respective location in regions that offer specific comparative advantages;

The translation of these key factors in a system of regional competitive advantages system demands the creation of favourable external and environmental conditions to the development of business strategies that assure an evolution for a more competitive productive model.

Source: CEC – Conselho Empresarial do Centro (2004), Guia do Investidor da Região Centro

29

I.2 Business profile of the region Main relations and tendencies * Describe the main relations and tendencies in the region in terms of business Table 23. Relations and tendencies

Characterising the industrial profile of the Portuguese regions, based on the competitiveness factors that are relevant for the analysis of the competition in the external market (working cost, natural resources, scale economies, differentiation of the product, R&D), the Centre Region clearly distinguishes from the medium pattern of the rest of the country, with a clear predominance of the industries centred in the exploitation of natural resources.

The analysis of the productive structure of the Centre Region also reveals a considerable dynamism of some NUTS III in the industrial area. Those are the cases of the areas that configure an “industrial district” structure type (Águeda, Aveiro, Marinha Grande), which set their dynamism in a noticeable business ability, even in situations where one can’t see clear location factors, namely the domain of the accessibilities. To this respect and as example, the Leiria-Marinha Grande axis is an exemplar case of a high business dynamic, even in a context of deficient transport infrastructures. From here it mustn’t naturally be concluded that that shows the irrelevance of the transport infrastructures, but maybe it can be stated that the competitive ability of those industries would be higher if the region had adequate infrastructures, thus powering the endogenous business abilities that characterise the region.

The competitive advantages of some Centre Region industries are naturally reflected on their exporting capacity; however, this exporting potential is very much concentrated in the littoral: considering the district division, the littoral districts explain 86% of the exportations, difference that shades off if one considers the sub-regions division (NUTs III). Dão-Lafões marks a significant position, with values close to the Pinhal Litoral and the Baixo Mondego.

This performance is partially based on the fact that the Centre Region has, although in a located way, some of the most dynamic business concentrations in the country. In fact, the high relative concentration of business units in the Baixo Mondego, Baixo Vouga and Pinhal Litoral regions sustain the thesis of littoralisation of the Centre Region’s economic structure, but must also evidence the weight of Dão-Lafões in the Region’s business structure, and mainly the dynamic revealed in the last decade, partially explained by the improvement of accessibilities to the region.

In the intra-regional distribution, the concentration of companies reveals more accentuated in the littoral NUTS than in the interior ones. The Pinhal Litoral is the sub-region where more dynamic is revealed (almost 19% of the Centre Region companies) and a very pronounced growing tendency. The district analysis makes stand out the weight of Coimbra, Aveiro and Leiria districts in terms of the number of companies located there in relation to the total of companies of the Centre Region (note that, while the analysis by NUT II Centre includes all the existing companies in the region, the analysis made for the districts that compose it exclude the district of Santarém, because it is only referred the council of Mação, and whose inclusion in the analysis would have values considered marginal). Coimbra, although continues to concentrate the highest number of companies (surely due to the urban agglomerate), registers, however, a negative growth rate in the last decade, which concompanies the loss of business dynamism that has been pointed out by several specialists. Leiria has a number of companies almost similar to Coimbra, what, taking into account the demographic weight of both cities, shows a higher entrepreneur ability.

The most marking characteristic in the region’s business structure is, undoubtedly, the high weight of micro-companies, which has been reinforced along the last years. It is estimated that almost 83% of the Centre Region business universe is constituted by micro-companies. Thus, it becomes clear the relevance that these companies have in the creation of employment and their importance in the region’s economic and social net.

The sector analysis allows taking some significant conclusions about the distribution of companies for the different activity sectors. Since then it is registered the loss of weight of the industrial companies along the last decade in the generality of the Centre’s sub-regions. Sectors like “Constructions” and “Services Rendered to Companies” saw increasing their weight in the business structure. If the reinforcement of this last sector translates a positive evolution of the business net’s quality, in a context of tertiarisation of the economy, the growth of the construction sector is associated to the investment cycle within the communitarian support frames and that will certainly have to adjust when that cycle ends.

The distribution of companies by activity sector in the Centre Region accompanies the pattern registered in the rest of the country, that is, predominance of commerce (with almost a 1/3 of the total), followed by industry, although this one in clear relative loss. It is also registered the growing weight that the companies of the “Lodging and Restaurant” sector have been acquiring (almost 12% of the total), which is related with the improvement of the population’s consumption pattern and also with the growing tendencies of urbanisation registered in the region, accompanying, as a matter of fact, the general movement verified in the country.

The “demographic” behaviour of companies, by analogy with the human demography, allows analysing the business dynamic more deeply. Thus, the evolution of the population of companies since Portugal entered the European Union in 1986 (date that is an essential mark in the economic liberalisation process and insertion of the Portuguese economy in the world economy) happened at a very fast

30

rhythm (almost 11% a year), explained by a very high “birth rate” of companies and a not less significant “mortality rate”.

The migratory balance (difference between the companies that went out of the region to locate in other regions and those who came in, coming from other origins) seems insignificant, which indicates a reduced mobility of the established companies. However, given the easiness of business “changing of entity”, it may happen that the new companies that are located in the region may, after all, be companies with status or designation different from the origin companies.

In terms of relative variation, along the period in reference, it is verified that, from the companies existing in 1986, almost 54% was no longer functioning in 1998. In the same way, the companies created after 1986 correspond to almost 79% of the companies existing in 1998, which shows a noticeable youth of the region’s business sector.

The analysis of the companies closed and created in that period highlights the predominance of micro-companies, which constitutes the reflex of the business structure existent in the region, which at start was already dominated by micro-companies. The business dynamic, when analysed in the point of view of its distribution by activity sectors, allows taking some additional conclusions. Thus, it is verified that 28,5% of the closed companies belong to the industrial sector, loss that isn’t compensated by the creation of new companies in the sector (only 19,4% of the total of new companies). The same thing happens with the “Other Services” sector, which represents 16,2% of the closed companies and only 8,6% of the new companies with clear reflexes on the region’s business structure. On the contrary, sectors like “Construction”, “Commerce” and “Services Rendered to Companies” appeared as activities in expansion. In the case of “Construction”, it is registered a weight in the creation of companies (18,7%) very superior to the weight in the closed companies (12,3%). “Commerce” shows the dynamism in the region through the relation between new and closed companies: represents 36,8% of the new companies and 30% of the closed companies.

The dynamic of the created and destroyed employment in the Centre Region is naturally the reflex of the created and destroyed companies. A great part of the closed companies integrated the “Industry” sector, so great part of the job posts destroyed also fitted in this sector (59,4%), fact that is also justified by the high intensity of workmanship that characterises the traditional industry. On the other hand, the job posts created, linked to industry, have an inferior weight in the total of Job posts created, which results not only from the relative weight of the industrial companies, but also from the fact that the new companies are more capital-intensive. Parallel to the expansion of companies in the commerce sector, it is also verified the high growth of job posts created in this area. Source: CEC – Conselho Empresarial do Centro (2004), Guia do Investidor da Região Centro

Business profile of the region * Describe the main attributes of business structure in the region, in terms of main proportions

suggested as below: Table 24. The features of the whole regional business structure

No ∼ Move from cost-based competition-oriented activities towards knowledge based competition–oriented activities

Yes with clear tendency in which branches

IT and telecommunications sector, health care services

No ∼ Move from manufacturing to services

Yes in what kind of services

Construction, commerce, service to firms and tourism

No ∼ Move from low-skill production to human capital intensive activities

Yes in which branches IT and telecommunications sector, health care services,commerce, service to firms and tourism

No √ Move in spatial rearrangements - from cities to suburban areas

Yes specific areas

No ∼ Move towards increasing clustering

Yes in which branches

Some clustering dynamics in sectors like the ceramics, metallic products, moulding industry, IT and telecommunications sector, and health care services. The moulding and ceramics sector have a more defined clustering process around the region of Marinha Grande/ Leiria; the metallic products cluster has a core in Agueda; the telecommunications sector has a important pole in Aveiro, due to the location of PT inovação, a firm the major telephonic portuguese company dedicated to innovation in telecommunications; the health care services has its core in Coimbra due to the excellence of its organizations (hospitals, universities, R&D institutes).

31

specifically arranged areas

Tick √ if ‘no’ applies or give details in the featured categories I.3 Mapping the SMEs SME basic data * Describe the characteristics of SMEs in the region Table 25. SMEs basic data

SME as a part of the business sector (GDP rate) 59,2% (national level) l

Employees in SME sector (percentage) 74,7% (year - 2001)

Number of SMEs 69049 (year 2003)

Number of tax-registered firms 259.799

Key branches represented in the SME sector (percentage)

Number of firms in total number of SMEs representing:

industry

of which high-tech

services

of which knowledge-based

Table 26. Business start-ups

2000 2001 2002 2003 2004

micro firms 90 %

small firm 9 %

medium size firms 1 %

Percentage of business start-ups within SME sector in total number of firms in SME sector Table 27. Business failures

2000 2001 2002 2003 2004

micro firms Non available

small firm Non available

medium size firms Non available

Percentage of business failures within SME sector in total number of firms in SME sector * Consequently, describe business profile of SMEs

32

Table 28. Business profile of SMEs

No ∼ Move from cost-based competition-oriented activities towards knowledge based competition–oriented activities

Yes with clear tendency in which branches

No ∼ Move from manufacturing to services

Yes in what kind of services

IT and telecommunications sector, health care services

No ∼ Move from low-skill production to human capital intensive activities

Yes in which branches Construction, commerce, service to firms and tourism

No √ Move in spatial rearrangements - from cities to suburban areas

Yes specific areas

No ∼ Move towards increasing clustering

Yes in which branches

Some clustering dynamics in sectors like the ceramics, metallic products, moulding industry, IT and telecommunications sector, and health care services. The moulding and ceramics sector have a more defined clustering process around the region of Marinha Grande/ Leiria; the metallic products cluster has a core in Agueda; the telecommunications sector has a important pole in Aveiro, due to the location of PT inovação, a firm the major telephonic portuguese company dedicated to innovation in telecommunications; the health care services has its core in Coimbra due to the excellence of its organizations (hospitals, universities, R&D institutes).

All theses clusters have a an important core composition of SME’s

specifically arranged areas

Tick √ if ‘no’ applies or give details in the featured categories I.3.1 Key factors affecting the SME sector dynamics Cultural codes affecting patterns of enterprising * Classify the codes affecting patterns of enterprising in your region Table 29. Codes affecting patterns of enterprising

Yes No

Is the SME sector affected by any prevailing type of enterprising? ∼ √

Is the SME sector affected mainly by historically developed competence (focus on tacit knowledge)?

√ ∼

Is the SME sector affected by new trends in enterprising? √ ∼

Is the SME sector filled mainly with owners and entrepreneurs rooted in this region?

√ ∼

Is the SME sector dominated by “newcomers”? ∼ √

Can one observe strong family tradition in enterprising-highly preserved and still dominating?

√ ∼

Local business is deep-rooted in industrial tradition (in last 50years) √ ∼

Local business is deep-rooted in rural tradition (in last 50years) ∼ ∼

33

Is the local business culture affected by stable and strong ethical standards? ∼ ∼

Is the local business culture affected by of stable views on success and carriers (preserved historically)? ∼ ∼

Is the SME sector dominated by men as owners and leaders of their firms? √ ∼

Are there any symptoms of activating of business making by women? ∼ ∼

To start up own business is a popular solution for unemployed. ∼ ∼

Is the political subculture favourable for local business? ∼ ∼

Is the input of entrepreneurial locations higher then output? ∼ ∼

Is the climate for making business perceived as prevailingly positive? √ ∼

Can the image of the region be seen as friendly for making business? √ ∼

Tick √ ‘yes’ or ‘no’ to classify the codes in your region. If none is representative leave code blank. * Comment upon the codes affecting patterns of enterprising in your region or rank the most and

the least important in your region Table 30. Codes affecting patterns of enterprising

The business environment in Centro region is characterized by a conservative culture in managers and SMER owners, where failure is highly penalised in social terms, there is a high aversion to risk taking, associate to the characteristic stated before and to a conservative society that favours stability instead of change. In these context , most sector are very conservative in conducting their business, and to privilege local business relations instead of non-local networks. Of course, this view does not apply to the clusters identified before.

Form the most to the least important in Centro region

The SME is sector affected mainly by historically developed competence (focus on tacit knowledge)

The local business culture affected by of stable views on success and carriers (preserved historically)

A strong family tradition in enterprising-highly preserved and still dominating

The SME sector is dominated by men as owners and leaders of their firms

The SME sector is affected by new trends in enterprising

The SME sector is filled mainly with owners and entrepreneurs rooted in this region

Local business is deep-rooted in industrial tradition (in last 50years)

To start up own business is a popular solution for unemployed.

The political subculture favourable for local business

The climate for making business perceived as prevailingly positive

The image of the region seen as friendly for making business

Some symptoms of activating of business making by women

Access to skills and competence

34

* Classify access to skills and competence Table 31. Skills and competence

Yes No

Is the profile of the SME in the region connected to any prevailing core competence? ∼ √

Can any internal and external (outside the region) competition in acquisition of high-skilled workers be observed? ∼ √

Can any internal and external (outside the region) competition in acquisition of low-skilled workers be observed? ∼ √

Tick √ ‘yes’ or ‘no’ to classify access to skills and competence in your region. If none is representative leave code blank.

* Rank the demand for specific skills and competence in terms of job opportunities and in terms of professions pursuing business opportunities, appearing within SMEs sector of the region

(use available expertises and reports produced in the region) Table 32. Demand for specific skills and competence within SMEs of the region

Ranks

qualified workers, craftsmen 4

qualified workers in service sector 3

sale specialists 3

teachers, welfare service personnel (care personnel) 2

technicians, engineers 3

managers, qualified administrators 3

scientists, consultants 2

low-skilled workers, workers without qualifications 2

other–specific skills 1 2 3 4 5

Rank the demand in terms of job opportunities and in terms of professions pursuing business opportunities, appearing within SMEs sector of the region.

Ranks: 1 – very low; 2 – low; 3 – average; 4 – high; 5 – very high Innovation as a change and success factor. Specific attributes of firms * Identify the main proportions Table 33. Firms and innovation

% %

Firms with high use of R&D 15 Firms with low use of R&D 85

Firms with innovation based processes 20 Firms with routine based processes and standardised production patterns

80

Firms with importance of tacit knowledge (for example: IT software, craft, unique services)

30 Firms with routine based production patterns

70

35

Firms highly generating innovations Firms adapting and imitating innovations

Name the branches:

5 Name the branches:

95

Firms with patents and research-based co-operation with links to universities

10 Routine–based firms 90

Spin-offs from universities, research institutes

70 Spin-offs from other organisations 30

Firms selling and acting on external markets (correlation with innovativeness-R&D-knowledge based processes)

80 Firms with focus on home/local market markets (correlation with innovativeness-R&D-knowledge based processes)

20

Identify the proportions (%). Creativity as a factor. New trends in making business * Identify creative practices in the region

(use available reports and expertises made by organisations and units working with business promotion or other relevant material)

Table 34. Creative practices in the region

Firms with new products/services and/or entering new market segments

Firms in “creative industries” (in the field of culture, arts, and entertainment) attending new markets

Not possible to estimate

Firms setting up new patterns for region’s attractiveness (symbolic value of their business success)

15

Firms offering arrangements/investments, creating new image/status of the region 15

Identify the approximate number of firms. Large companies impact (Strategic partners, investors, market creators) * Describe shortly the role of large companies in the region and their influence on SMEs in terms

of: Table 35. The impact of large companies on SMEs in your region

high low

business success/profitability

Most of the large companies subcontract in some form SME’s form the region. But this is not extend to a vast majority of the region SME’s, but the impact is not important as it could be expected.

expansion/growth /investments

Most of the large companies subcontract in some form SME’s form the region. But this is not extend to a vast majority of the region SME’s, but the impact is not important as it could be expected

enactment and enabling of new initiatives/innovations

Most of the large companies subcontract in some form SME’s form the region. But this is not extend to a vast majority of the region SME’s, but the

36

impact is not important as it could be expected.

spatial structures of making business

A “litoralization” of the economy has occurred in the past years, has large companies tend to locate in the littoral, and around urban centres as Aveiro, Leria, Viseu and Coimbra.

patterns of networking

The moulding/ceramics sector of Marinha Grande/ Leiria, and the metallic products cluster in Agueda both have a defined pattern of networking, which is being sediment during the last years,

specific clustering The moulding cluster of Marinha Grande/ Leiria and the metallic products cluster in Agueda both work heavily in the global production circuit as subcontracted firms; the ceramics cluster has its own portuguese brands form large companies; as for the Aveiros telecommunications cluster, the PT inovação, a firm form the major telephonic portuguese company dedicated to innovation in telecommunications, is its main catalyst.

anchoring around urban spaces

A “litoralization” of the economy has occurred in the past years, has large companies tend to locate in the littoral, and around urban centres as Aveiro, Leria, Viseu and Coimbra.

Describe the impact. * Identify key companies with massive impact on SMEs Table 36. Key large companies – impact on SMEs

From the biggest companies in the region we can highlight Vulcano SA – Manufacturer of gas heater, boilers, tanks, radiators and self - heated tanks (nº 92), the Bertrand Faure S.A – Manufacturer of cars equipments, (nº 100), the CASCA - Sociedade de Revestimentos S.A – manufacturer of wood agglomerates (nº 111) and the Stora Celbi SA - paper and forest products company (nº 113), the DOW Portugal SA – chemical industry (nº 127), ROCA - Cerâmica e Comércio S.A. – ceramics (nº 135), the SIMOLDES – moulding industry (nº 150), a ECCO ’LET – footwear (nº 190) and the HUF Portuguesa - Fábrica de Componentes para o Automóvel (nº 195) (ranking number on the top 500 of non-financed companies in the Country).

These large companies create a vast business network, that tough not always implemented in the region, includes also some opportunities for SMEs along the supply chain as well as in other areas of providing services to the company. We have to add that these companies contribute to the reputation of the region and create a specific business atmosphere, establishing standards and quality requirements.

Public demand as basic stimuli for making business. Private operating-public funding. (New standard requirements and new fields for call for tender)

* Identify and describe the following features:

- new business opportunities due to new standards and requirements codified by public

actors (environmental, biotechnical, social, etc) - outsourcing in welfare services, social activities and others -on public demand (tax base

financed activities) - start ups on markets set up for meeting public demand (tax base financed activities)

Table 37.Public demand and making business

37

In June 2005, the Government presented to the Republic Assembly the Stability and Growth Programme (PEC) for the period of 2005 to 2009. This programme adopts a strategy for the development of the Portuguese economy based on two axes: the creation of sustained growing conditions of the Portuguese economy and the consolidation of public numbers.

One of the key- elements of the Government’s strategy, in order to retake the growing sustained process, is the public investment that will not be affected by the budget consolidation. It is predicted that the FBCF of Public Administrations investment rate will be around 3% of the PIB for 2005 to 2009.

Besides the main investments, the public effort will focus on promoting and stimulating activities that result on private investment, both as public- private partnerships, both in the private initiative, resultant from the giving of licences of the State, especially in areas of transports, energy, health and environment.

It is admissible that the effort of public investment, during 2005-2009, will be selective and qualified, being priority the reinforcement of the factors that are decisive in the productivity improvement and of the economy competitiveness: knowledge, human resources qualification, technologic innovation, efficacy of the services given by the State and their integration in the territory activities.

As consequence, the adopted criteria include expected benefits; the degree of maturation of the project, the external conditions/e.g. environmental impacts) their framing, safety and risk levels (namely the technological) and their viability; and funding, viability and their results for the public expense.

Based on the given information by the sectors, and after several exercises of scenario, it was made a short table that includes projects in priority areas of intervention: infrastructures, territory, information and training and knowledge.

These projects include:

In public funding - - infrastructures’ projects and programmes in progress during the execution, framed in the Third Communitarian Support Frame (QCA III), • new projects to be done during 2005-2009; • new projects to be done during 2005-2009, fully or part funding of the public operators OP (ANA, REFER, APL, etc.), and new projects to be initiated during this period, but whose ending will be after 2009.

In the private funding - private initiative projects with a public participation; projects that are a result of public-private partnerships, happening or to be started; and new strictly private projects of funding that happen with licences or concessions in the Energy and transport areas.

Traditionally, the basic infrastructure projects are directly financed by the State Budget and, with a larger or smaller use, to the indebtment of the Operators, being them also public. More recently, it were introduced public- private partnership models in infrastructures such as Transports and Health, that allow the private investment to be paid throughout a rent during the contracts period of time. This way of funding aims to transport the financial effort from the State for a wider and more distributed period of time.

Besides the direct funding of the Budget and of the funding of the Public operators, it shall be done an effort to diversify the current models of funding in the frame of the public- private partnerships, enlarging the alternatives and clearing its comparison in cost- efficiency terms. In this field, there are examples of funding models in the Anglo-Saxon countries that proved to be valid alternatives to the more conventional models as well as the public- private partnership: Trust Funds, Revolving Funds, Leasing and Obligations. These models include, at a major or minor degree, the user participation in the Capital costs and/ or floatation of the infrastructures, which ease in a significant way the pressure over the Public Finances.

Clustering and networking as processes facilitating accessibility. Factors profiling business access and development * Describe the following aspects of clustering and networking: - firms with propensity for clustering and networking versus firms no sensible for that - firms seeking clustering because of the economies of scale in : - R&D and transfer of innovation - transfer of unique competence/ tacit knowledge - technological and logistic co-operation - access to better market information and consolidated promotion - access to media and communication facilities - access to administrative competence and training - access to business policy based activities and financial support

(The issues outlined here require references to expertise regarding clustering in the region - if available)

38

Table 38.Clustering and networking

Despite informal recognition of some regional clusters in Portugal, up to now an official map of regional clusters has not been drawn up and consequently neither have policies been developed that are specifically directed at the same. The report co-ordinated by Michael Porter (Monitor Company, 1994), in which a map of clusters was outlined and measures of action for its development were identified, was an important approach to the question, but national authorities have only used this document as a reference, and have not provided an institutional basis for the nomenclature used. Some new clustering dynamics have also been identified recently in sectors like IT and telecommunications sector, with an important pole in Aveiro, due to the location of PT inovação, a firm the major telephonic portuguese company dedicated to innovation in telecommunication; and in the health care services sector, which has its core in Coimbra due to the excellence of its organizations (hospitals, universities, R&D institutes).

Porter clusters’ map demonstrates the large number of clusters and their high level of geographic concentration. The relatively distinct level of economic development of each cluster was also noted. While certain clusters have a high level of development, such as the cork cluster in Santa Maria da Feira, others reveal structural weaknesses, such as the footwear cluster. Nonetheless, all clusters were considered to represent an important store of knowledge, upon the basis of which stronger export positions can be built.

Some of these Portuguese clusters are situated in Centro Region, and below will be provided a brief description how such clusters have been formed and developed, and also illustrating certain structural weaknesses and competitive challenges faced by these clusters.

Wood products

The wood products industry is a traditional sector in the North of Portugal, concentrated in the areas of Porto (North) and Viseu (Centro). Production is mainly based on pine planks and manufactured agglomerated panels. Pine-based production is mainly for fencing, palettes, boxes, etc. In this segment, companies are highly fragmented but export around 50% of their production via distributors. The panels segment includes two large-scale companies that use internationally competitive technology and inexpensive raw materials sourced from the sawdust produced by the traditional sawing industry. The sector’s competitive advantage is mainly based on Portugal’s relatively low costs, in terms of labour and wood costs.

The sector’s exclusive dependence on production factor advantages has left Portugal with a cluster that is “underdeveloped” with a low level of information flow between the sector’s economic agents. Companies are small-scale and sell to end markets via intermediaries. There are no efficient mechanisms to inform producers of changes in market needs. There are some national suppliers of manufacturing machinery, but they have been able to secure a significant share of the international market. In addition, the small scale of the national machinery market, and low level of improvement in machinery has led to a low level of interaction between the wood products producers and machinery producers. The heterogeneous quality and erratic supply of wood has made it difficult to progress from the area of sawing to higher value products – such as furniture – where a key factor is guaranteed continuity of supply and high wood quality. These factors have culminated in an environment in which it is difficult for the manufacturing industries to overcome their traditional dependence on raw materials.

An increase in costs resulting from rising labour costs and the increase in the cost of pine has alerted the sector for an even deeper problem – incapacity to respond to changes in consumer needs. For example, the main end clients in the building industry are increasingly purchasing semi-finished wood components, instead of manufacturing each item on the basis of raw materials. This obliges producers to integrate with the producers of components further down the value chain. The traditional concentration of companies in basic products has meant that they have not developed the design and marketing skills required to compete in this new market. As a consequence, Portuguese wood products are increasingly sold abroad, in particular to Spain, where they are transformed into components and then re-imported into Portugal, for use in the construction industry.

Plastic Moulds

Plastic moulds have been produced in Portugal since the end of the 1940s and are now almost exclusively produced for export. This sector is composed of around 260 companies that, on average, employ 30 persons and have company turnover under 500.000 euros. Small-scale production is not a disadvantage in this sector, given that production is characterised by “job shop” employment. This sector is geographically concentrated in two regions: Marinha Grande and Oliveira de Azeméis, both located in Centro region, where the first plastic moulds were produced by producers of moulds for glass.

Until recently, the cluster of Portuguese moulds firms had not been able to develop connections with other companies or institutions in order to increase competitiveness. Traditionally, moulds producers operated on the basis of sub-contracting, producing moulds on the basis of customer specifications and basing their competitiveness on manufacturing knowledge and low labour costs. In addition, the cluster was unable to develop connections with suppliers of specialised machinery, because the majority of more sophisticated equipment in the market is imported. Until recently, workers’ skills were developed on-the-job and there were no specialised training institutions in existence. Nonetheless, a series of initiatives are now being launched as a result of industrial associations and certain leading companies that have promoted initiatives designed to establish inter-connections. A Technology Park has been set up, specialised training in moulds is being organised at various levels and in schools, and joint initiatives are also being promoted.

This cluster has to expand towards more global end markets, given the erosion in its competitive advantage in terms of labour costs through competition from countries with lower salary levels. In order to achieve this objective, investment in sophisticated equipment is

39

not by itself sufficient. As some companies of this cluster are already doing it, firms will have to improve their quality, confidence in their products and delivery times. They also have to widen the range of services that they offer, assuming responsibility for product development tasks that are normally executed by the clients. It is necessary to improve the capacity of managers, as well as that of production agents. In order for the cluster to remain competitive it is essential that the sector keeps up-to-date with the latest technical developments and promotes its own innovations.

Factors profiling business access and development

Portuguese industry is mainly composed of small-scale companies, and 96% of Portuguese companies have under 50 staff. There are various reasons to explain the small scale of companies in the Portuguese economy. One is that over 70% of companies are family owned. A typical result of family ownership is a high level of risk aversion and an independent attitude that impedes mergers between companies or co-operation. So, if Portugal has a significant base of clusters, many of them lack depth, with shortage of related and support industry and equipment goods. This weakness is produces a high incidence of absence of inter-connections, observing three basic types of inter-connection to be increased and obstacles to be removed:

1. Connections are blocked due to the absence of an essential participant – interconnections provide a binding basis for the exchange of information between participants in a cluster, and if one of the parties is not located in the nearby area (Portugal), such information exchange is less likely to take place. For example, in the ceramics industry an important source of competitive advantage is the adoption and fine tuning of the latest manufacturing equipment technology. Given that the suppliers of such equipment are not based in Portugal, local companies are impeded from obtaining fast access to new technologies. It is nonetheless important to note that some innovative companies have been able to overcome this problem by establishing strong links with foreign companies;

2. Participants do not understand the potential of an interconnection – in order to be able to reap the benefits of an interconnection it is necessary that the participants in a cluster demonstrate initiative and have a clear vision of the benefits that they can draw from the information exchange. If the participants do not understand these benefits, the interconnections will not be created. In the case of the furniture cluster, there is a clear potential for companies to establish horizontal interconnections in an effort to combine complementary product lines in order to benefit in terms of distribution and logistical efficiency. Nonetheless, the strong tradition of independence of small family companies that dominate this cluster impedes the possibility of collaboration and thus to see the potential advantages to be drawn from such co-operation;

3. Potential links are blocked by existing rivalries between the participants of the cluster – if the cluster participants see the advantages of interconnection but do not trust other participants; it is very unlikely that an interconnection will be made. For example, the Portuguese bottle cork industry is aware that it needs to launch a wide campaign to neutralise the danger of the use of aluminium and plastic stoppers. Nonetheless, the long tradition of distrust between the major companies and international bottle cork distributors prevents a concerted approach from being taken concerning this joint problem of competitiveness.

Regional Clusters in Europe, Background Material (Portugal)

Summing up: Availability as a location factor * Rank the following specific resources:

(Specific resources and SMEs propensity to establish and run their activities in the region) Table. 39 Specific resources and SMEs

Ranks

ICT, broadband 3

transportation (road system, aviation, others) 4

proximity to low cost raw materials 2

availability of low cost labour 2

availability of relevant information/knowledge 4

availability of skilled workers 5

40

availability of qualified suppliers 4

availability of low cost suppliers 2

proximity to market and clients 4

Rank the specific resources in terms of SMEs propensity to establish and run their activities in the region.

Ranks: 1 – very low; 2 – low; 3 – average; 4 – high; 5 – very high Summing up: Tendencies/structural changes * Describe tendencies/structural changes in SME sector

(the major tendencies in last years and the major trends to be expected in nearest few years) Table 40. Tendencies/structural changes Past 5 years Future

companies with demand on local markets versus companies with demand on extern markets

There are 3 tendencies that are growing:: Clusters with a clear exportation character, the dominance of micro companies in the global number of enterprises and the “tertiarisation” of Economy (these two centred in local markets)

It can’t be drawn a clear future for the previously mentioned clusters, some of them passing trough severe restructuring crisis;

The tertiarisation of economy is a clear tendency, along the appearance of high-tech companies and services based on knowledge.

companies with supply on local markets versus companies with supply on extern markets

The Clusters with a clear exportation character have been having, as strategy, the increase on the value chain, which will tend to supply in global markets.

The Clusters with a clear exportation character have been having, as strategy, the increase on the value chain, which will tend to supply in global markets.

companies depending on single large companies in the region versus companies depending on single large companies outside the region

The region is going through a changing phase, with the displacement of companies to countries and cheaper labour areas

The region is going through a changing phase, with the displacement of companies to countries and cheaper labour areas

companies in manufacturing versus service

The tertiarisation of economy has been a clear tendency, with a large mortality rate in the industrial companies.

The tertiarisation of economy is a clear tendency, although it may appear an industrial revitalization, but based on knowledge - upgrade in the value chain.

companies in routine based production versus innovative-based production

It was verified a large mortality rate in the industrial companies based on cheap labour and low cost of final product.

It may become possible to verify an industrial revitalization, but based on knowledge- upgrade in the value chain.

labour intensive companies versus capital intensive companies

It was verified a large mortality rate in the industrial companies based on cheap labour and low cost final product.

It may become possible to verify a revitalization of the companies based on knowledge-– upgrade in the value chain, throughout a larger collaboration between the Universities and the knowledge centres.

Briefly describe the tendencies/structural changes in last years and the major trends to be expected in nearest few years.

41

II. SUPPORT SYSTEM FOR SME - Benchmarking actors, programs, policy documents. Policy making phase. II.1.1 Strategies policies, programs, actors, interrelations, interdependencies

Strategies, policies, programs NATIONAL LEVEL The SMEs support in regions can not be analyzed properly without reference to the national context (i.e. strategies and policies and centrally governed programs), as in some of the countries the above mentioned context strongly influences approaches and activities of regional actors. Important remark: Please include the EU financed/co-financed actions managed by national authorities. National strategies & policies towards SMEs * List national strategies and other policy documents that influence SMEs development

(list of strategies & policies - English names) Table 41. National strategies and other policy documents and SMEs development Program of Investments in Priority Infra-Structures (PIIP) STABILITY AND GROWTH PROGRAMME (2005- 2009)

* List national strategies and other policy documents that influence innovation

(list of strategies & policies - English names) Table 42. National strategies and other policy documents and innovation Bases for a National Plan of Innovation: Joint study of the Ministry of the Economic Activities and the Ministry of Science, Innovation and Superior Education, for the development of a public politic of Innovation Action Plan on the Information Society; 2003; UMIC Government Decision Description of strategies & policies * Describe national strategies and other policy documents that influence SMEs development and

innovation listed in two previous tables (multiply the table for the number of important documents)

Important remark: If the documents encompass numerous focus areas, describe the SMEs parts only.

42

Table 43a.(b, c, d…) Description of strategies and policies

Name of the document (original and English)

Programa de Investimentos em Infraestruturas Prioritárias (PIIP)

Program of Investments in Priority Infra-Structures (PIIP)

Year of publication 2005

Institution responsible for elaboration of the document

Instituto Superior Técnico e Instituto Superior de Gestão – Universidade Técnica de Lisboa

National and regional institutions responsible for (supporting) implementation of the strategy/policy

Portuguese Government - Ministry of the Economic Activities

Short description of key issues

To identify the proposals of priority national investments and “ of structural nature" to carry through in the next years;

To select the investments in infrastructures in conditions of concretion in this legislature;

to constitute an integrated Program of partnership between the State and the private sector.

This program of investments does not intend to aggregate the total of the investment effort to carry through between 2005 and 2009 but yes, but so only, to present the projects, that for its importance, requirements of public-private partnerships, and, mainly, for the favourable externalities that will be able to originate, must deserve special engagement and priority.


PROGRAMA DE ESTABILIDADE E CRESCIMENTO (2005-2009)

STABILITY AND GROWTH PROGRAMME (2005- 2009)



Portuguese Government


Portuguese Government


The Portuguese Stability and Growth Programme is based on a strategy for economic development and consolidation of public accounts for the 2005 to 2009 period. Measures and reforms are included which seek to come to terms with the very worrying current Portuguese budgetary situation and create the conditions for sustained economic growth. This is to be carried out with a tight and unflinching rein over the next few years, without losing track of the goals of achieving economic growth and job creation.


Bases para um Plano Nacional de Inovação: Estudo conjunto do Ministério das Actividades Económicas e do Trabalho e do Ministério da Ciência, Inovação e Ensino Superior, para o desenvolvimento de uma política pública de Inovação Bases for a National Plan of Innovation: Joint study of the Ministry of the Economic Activities and the Ministry of Science, Innovation and Superior Education, for the development of a public politic of Innovation



Ministry of the Economic Activities and the Ministry of Science

43


Ministry of the Economic Activities and the Ministry of Science


The objectives of this work are the elaboration of a characterization and analysis of the current situation, both economic and sectorial, of the innovation, the technology and science status, and the definition of strategies and actions capable to induce the necessary transformations in the involved actors.

Assessment of strategies & policies * Summarize the opinions of regional actors on successes and failures of the above described

strategies & policies with reference to your region. Table 44. Regional actors’ opinions about strategies & policies

For regional actors, the visible face of these strategies and policies are the operational programmes, so the opinion for the strategies and policies will be the same as for the operational programmes.

National programs towards SMEs * List national programs – available in your region – that influence SMEs development.

(list of programs – English names) Table 45. National programs towards SMEs and SMEs development

Title of document; Date; Organisation Responsible; Legal Status POCI 2010 Oper. Prog. Science and innovation 2010 (replaces POCTI – Oper. Prog. Science, Technology and Innovation; 2000; Ministry of S&T Operation. Programme under IIICSF) POSConhecimetno - Oper. Prog. For Knowledge Society (replaces POSI – Oper. Prog. Information Society; 2000; Ministry of S&T Operation. Programme under IIICSF) POEFDS -Training and Social Development Operational Programme, 2000,

PRIME – Programme of Incentives for Modernising the Economy, 2003

* List national programs – available in your region – that influence innovation.

(list of programs – English names) Table 46. National programs towards SMEs and innovation For a more convenient understood of programmes, due to the vast number of measures include, we opt to highlight the measures of some programmes, indicating for each measure the programs for it belongs, and a respective code, to facilitate further explanations about these measures. Code; Title; Start/End Dates; Status PT 1; R&D Activities by Consortia (PRAXIS XXI); 1994/2000; Ended PT 2 Recruitment of Doctors and Masters (PRAXIS XXI); 1994/1999; Ended PT 3 PEDIP II Financial Engineering Measures 1994/1999 II.5 Ended

44

PT 4 Fiscal Incentives for Investment in R&D (SIFIDE) 1997/depend. PT 5 Medium-Term Finance Programme of R&D Units 1997/Not defined; Old PT 6 Science and Technology Observatory 1997/Not applicable I.3; Old PT 7 Development of Technological Capabilities at enterprise level (SME Initiative); 1997/2001; Ended PT 8 S&T Training (PRAXIS XXI) 1994/1999; Ended PT 9 Financial Incentives to R&D Industrial Projects (PEDIP II) 1994/1999; Ended PT 10 Innovation and Technology Transfer Measure (PEDIP II) 1994/1999 ; Ended PT 11 Mission for the Information Society 1996/1999 ; Gave rise to the Operational Programme on Information Society PT 12 PEDIP II Demonstration Actions 1994/1999; Ended PT 13 Centres for Company Formalities 1997/Not applicable; Old PT 14 Restructuring of INPI 1998/Not applicable; Old PT 15 SIPIE – Small Company Initiatives Incentive System (POE/PRIME) 2000/2006; Changed after evaluation PT 16 SIME – Company Modernization Incentive System (POE/PRIME) 2000/2006; Changed after evaluation PT 17 Internet Initiative 2000/2006; Old PT 18 SIUPI – Industrial Property Use Incentive System (POE/PRIME) 2000/2006; Old PT 19 Certificate of Basic Competencies on Information Technologies 2001/Not applicable; Old PT 20 Measure for Supporting the Dynamisation of Technology, Training and Quality Systems – MTTQS (POE/PRIME) 2001/2006 ; Replaced by PT 42 PT 21 R&D Activities by Consortia (POSI) 2001/2006; POCTI measure integrated in IDEIA (PT 33) PT 22 Integration of Doctors and Masters in Companies and Technology Centres (POCTI) 2001/2006; Replaces PT 2 PT 23 Mobilising Projects for Technological Development (POE/PRIME) 2001/2006; Old PT 24 Financial Innovation – Action A (POE/PRIME) 2001/2006; Slightly changes PT 25 Financial Innovation – Action B (POE/PRIME) 2001/2006; New. Linkages with the old PT 3 PT 26 Industrial Property Support Offices – GAPI (POE/PRIME) 2001/2006; Old PT 27 PME Digital Initiative (POE/PRIME) 2001/2006 I.3; Old (…) PT 30 Programa Gerir 2002/2006; Old. PT 31 Venture Capital Syndication Funds (POE/PRIME) 2002/2006; Launched in the context of PT24 e PT 25 PT 32 Credit Enhancement Securitisation Fund (POE/PRIME) 2002/2006; Launched in the context of PT24 e PT 25 PT 33 IDEIA - Applied Research and Development in Companies (POCTI/PRIME) 2003/2006; Slightly changes PT 34 NEST – New Technology Based Companies 2003/2006; New PT 35 QUADROS Programme 2002/2006; New PT 36 NITEC – Incentive System for Creating R&D Nuclei in the Company Sector (POE/PRIME) 2003/2006; New PT 37 DEMTEC – Incentive System for Undertaking Pilot Projects Concerning Technologically Innovative Products and 2003/2006; Slightly changes PT 38 Programme for Supporting and Encouraging the Participation of Portuguese Organisations in the VI Framework Programme (POCTI/POSI) 2003/2006; New PT 39 PRIME Jovem 2003/2006; New PT 40 SIME Inovação 2004/2006; New (autonomised from SIME – PT 16) PT 41 SICE – Incentive System on Firm Cooperation 2003/2006; New PT 42 Technology, Training and Quality Infrastructure; 2004/2006; Replaces MTTQS (Pt 20) PT 43 Doctoral Grants in Companies 2004/2006; New PT 44 Training and Human Resources 2003/2006; New. Replaces older POE regulation PT 45 Regime of Scientific Patronage; 2004/ onwards; Replaced older regime PT 46 Tax Reserve for Investment 2003/2004; Replaces SIFIDE (PT 4)

Source: European Commission, Enterprise Directorate-General (2004), European Trend Chart on Innovation, Annual Innovation Policy for Portugal, Covering period: September 2003 – August 2004, Innovation/SMEs Programme

Description of programs * Describe national programs – available in your region – that influence SMEs development and


Table 47a. (b, c, d…) National programs influencing SMEs development

Name of the program POCI 2010 Oper. Prog. Science and innovation 2010 (replaces POCTI – Oper. Prog. Science, Technology and Innovation; 2000; Ministry of S&T Operation. Programme under IIICSF)

Period 2000-2006

45

Managing authority Manager, nominated for the Cabinet under proposal of the Minister of Science

Implementing authority Ministry of Science

Regional institutions responsible for implementation (i.e. program promotion, collecting applications, assessment, contracting, etc.)

Agência de Inovação (Agency of Innovation)

Agência Nacional para a Cultura Científica e Tecnológica (National Agency for the Scientific Culture and Technological)

Fundação para a Ciência e a Tecnologia (Foundation for Science and the Technology)

Legal status of the above listed regional institutions and structure of their shareholders

A Agência de Inovação, s.a. (Adi) has its capital subscript in equal parts for the Ministry of Science, Technology and Superior Education, through the FCT - Foundation for the Science and Technology (50%), and for the Ministry of the Economy and the Innovation, through the IAPMEI (17%) and of the PME - Investments (33%).

Foundation for Science and the Technology is a foundations created by the government

National Agency for the Scientific Culture and Technological is private not-for-profit body

Level of independency of the above listed regional institutions in terms of influence on allocation of the funds (Do the institutions play an active role in the selection procedure and management of the program in your regions or do they take the role of administrator responsible for check-up according to national guidelines with neither managerial nor political influence on further decisions concerning allocation among final beneficiaries?)

All they are national bodies responsible for the programs implantation and projects selection

Budget allocated to your region 712 911 598 Euros as a national project

Characteristics of support provided within the scope of the program

The four main objectives of this Operational Programme are:

· To catch up with the science delay

· To develop innovation

· To promote the science and technology culture

· To create and improve on observation, planning, monitoring and evaluation mechanisms

Potential final beneficiaries

Public organisms

Public and private entities which promote or develop science and

technology activities

Public and private entities dedicated to training activities or the

diffusion of science and technology

Individuals covered by the regulations in force for the allocation of

advanced study grants

Public institutions with S&T activities

Higher education institutions, their institutes and R&D centres

Non-profit private R&D institutions

State laboratories and other public departments dedicated to R&D

46

activities

Enterprises with R&D activities and Technological Centres

Other public and private entities dedicated to S&T activities, namely

R&D, training or the diffusion of science and technology

Other useful information

replaces POCTI – Oper. Prog. Science, Technology and Innovation; 2000; Ministry of S&T Operation. Programme under IIICSF

Name of the program POSConhecimetno - Oper. Prog. For Knowledge Society

Period 2000-2006

Managing authority Manager, nominated for the Cabinet under proposal of the Minister of State and the Presidency

Implementing authority Manager Cabinet, nominated for the Cabinet under proposal of the Minister of State and the Presidency


Manager Cabinet, nominated for the Cabinet under proposal of the Minister of State and the Presidency


Fundação para a Ciência e a Tecnologia (Foundation for Science and the Technology)

UMIC (Unidade de Missão Inovação e Conhecimento)



Foundation for Science and the Technology is a foundations created by the government

UMIC is a public insitute



Budget allocated to your region 625.035.000 Euros as a national project


POSConhcimento is the main program for Information Society. The measure with most impact on SME’s is the R&D consortia projects, that stimulates partnerships between SMEs’ and R&D institutions to develop common products/services and transfer technology.

47


- Public and private entities which promote or develop science and technology activities

- Public and private entities dedicated to training activities or the diffusion of science and technology

- Regional and local development Societies, Agencies and consortiums

- Private firms


replaces POSI – Oper. Prog. Information Society; 2000; Ministry of S&T Operation. Programme under IIICSF

Name of the program POEFDS -Training and Social Development Operational Programme, 2000,

Period 2000-2006

Managing authority Manager, nominated for the Cabinet under proposal of the Minister of Work

Implementing authority Manager Cabinet, nominated for the Cabinet under proposal of the Minister of Work


Minister of Work




Budget allocated to your region 2.820.260.516 Euros as a national project


Measure 2.2 (Training and Organisational Development) offers an important contribution to the consolidation of more effective approaches to training, that can bridge the gap that exists between SME’s and the training.


Business and Professional Associations and regional and/or local Organisations

Public Institutes

SME

Public and private entities which carry out activities in the ambit oftraining and employment

·Active employed persons

48


Name of the program

PRIME – Programme of Incentives for Modernising the Economy 2003 MEc Operation. Programme under IIICSF

Period 2000-2006

Managing authority Manager, nominated for the Cabinet under proposal of the Minister of Economie

Implementing authority Manager Cabinet, nominated for the Cabinet under proposal of the Minister of Economie



IFT – Institute for the Support of the Tourism

IAPMEI – Institute for the support of SMEs

API – Portuguese Agency for Foreign Investment

DGE – Firms Directorate-General

IPQ – Portuguese Institute for Quality

INPI – Institute for Industrial Property

GPF – Cabinet for Partnerships and Training

ICEP – Instutes for Comece nad Tourism romotion

DRE’s - Regional Ministry of Economy Agencies

DGT - Tourism Directorate-General

IGFSE - Instutes for European Social funds Management




All they are national bodies responsible for the programs implantation, projects selection, and technical advisers

Budget allocated to your region 8.085.593 Euros as a national project


The Operational Programme for Incentives and Modernisation in the Economy aims to encourage growth in Portuguese enterprises’ productivity and competitiveness in the global market; it covers industrial sectors, energy, construction, tourism, the commercial

49

sector and services. The pursuit of PRIME objectives underlies an action strategy in Enterprises; on one hand, it creates the conditions to help the productive fabric adapt to internal and external competition through improvements in productivity and competitiveness and, on the other, to speed up the adjustment process of the Portuguese economy towards new lines of specialisation, namely by mobilising and giving value to innovative potential and entrepreneurship. This is put into practice in three priority action lines: Line 1 – Boosting Enterprises Line 2 – Qualifying Human Resources Line 3 – Improving the business environment


Enterprises or other economic agents from the business world, Associative business structures Public or private non-profit R&D entities


(replaces POE – Operational Prog. for the Economy 2000; MEc Operation. Programme under IIICSF)

Assessment of programs * Summarize the opinions of regional actors on successes and failures of the above described

programs with reference to your region. Table 48. Regional actors’ opinions about programs

POCTI, as the main programme to support science and innovation projects, has privileged more in its approvals, the academic track records of the proposal authors that the strategic and territorial links to economic development, giving rise to critical mass in areas that are not interconnected to territorial and SME’s development.

On of the measures that could bridge this gap, insertion of PhD’s in firms, had a poor execution and didn’t contribute at this fully potential to connect science/innovation ad SME’s development, specially when the evaluation of the measure in itself, i.e., the satisfaction of its participants, Phd’ and firms, is widely positive.

The measure of R&D in consortia with firms, thought it didn’t have fully execution and recorded a slow pace, had also a positive evaluation by its participants, so it suggests that the measure is appreciated in itself, being the flaws at the pace of its execution.

POSI is the main program for Information Society. POSI encountered some problems in connecting its goals with general goals for promoting innovation and competitiveness that are linked to other programs. It also had a poor execution, which is partially responsibility of the projects promoters and the POSI coordination, and lead to incapacity of correcting eventual conception inadequateness.

The measure with most impact on SME’s – R&D consortia projects – had a poor financial execution (13% of total measure budget executed), which contrasts with the rate of projects approval (70% of total measure budget allocated), and leads to serious difficulties in projects execution. This indicates that the measure is widely accepted by firms and SME’s, but problems in its execution diminished its impact and “ground level” acceptance.

POEFDS is the main program for employability, which also includes SME staff training measures.

POEFDS axis 1, which promotes employability and can provide the labour market with qualified workers (craftsmen or service sector), had a positive acceptation at territorial level by its actors (participants and employers), stated in the rates of employability after finishing the training programmes.

POEFDS axis 2, which promotes lifelong training and versatility, and has special measures directed at SME (organizational development and training). It had a very positive participation form regional actors, tough the SME’s participation still showed to be smaller comparing to individual participation. Stiil, the opinion about the methodologies of training consultancy (customized training for SME’s, usually in-house) showed to be much more positive, as in satisfaction, as in participation.

50

PRIME aims to encourage growth in Portuguese enterprises’ productivity and competitiveness in the global market; it covers industrial sectors, energy, construction, tourism, the commercial sector and services.

Industrial and tourism sectors are the ones which have showed a more positive view on this program, has the measure to promote competitiveness and R&S for companies are the ones more appreciated. The measures to support investment in firms were much more requested than the ones to support firm’s cooperation and support/qualification by business organizations. More than 70% of the projects have been submitted by SME’s, and Centro Regions was second in projects submitted.

In general, this programme has been considered adequate to the needs of its users. Nevertheless, some flaws have been identified with the interconnection of PRIME and the regional Programs (PORC, in this case)

REGIONAL LEVEL This part provides the information regarding region’s ability to create and implement the independent regional strategies and policies as well as the programs towards SMEs. Important remark: Please include the EU financed/co-financed actions managed by regional authorities. Regional strategies & policies towards SMEs * List regional strategies and other policy documents that influence SMEs development

(list of strategies & policies - English names) Table 49. Regional strategies and other policy documents and SMEs development

Operational Programme for the Central Region (2000-2006) (CCRCD) Investor Guide for Centro Region, CEC (2002)

* List regional strategies and other policy documents that influence innovation

(list of strategies & policies - English names) Table 50. Regional strategies and other policy documents and innovation

A Development Model for the Portuguese Centro Region, a business perspective, CEC (2000)

Description of strategies & policies

51

* Describe regional strategies and other policy documents that influence SMEs development and


Important remark: If the documents encompass numerous focus areas, describe the SMEs parts only. Table 51a.(b, c, d…) Description of strategies and policies


Programa Operacional da Região Centro (2000-2006),( CCRCD)

Operational Programme for the Central Region (2000-2006) (CCRCD)



Comissão de Coordenação de Desenvolvimento da Região Centro

Regional and local institutions responsible for (supporting) implementation of the strategy/policy

Comissão de Coordenação de Desenvolvimento da Região Centro


OPERATIONAL PROGRAMME FOR THE CENTRAL REGION

The essential pillars of the development strategy to be implemented concern the qualification of human resources, the structuring of the territory and the qualification of the milieu, the strengthening of the competitiveness of the regional economy, exploring new opportunities and raising the value of resources in the region’s territory. The main strategic objectives which also form six priority intervention fields of the Region’s development policies, are:

- Citizenship, social cohesion and human capital

- The urban system

- The competitiveness of the regional economy

- Geographic accessibility and exploitation

- Water resources

- Forest resources and forest management


Guia do Investidor para a Região Centro, Investor Guide for Centro Region,



CEC-CCIC - Conselho Empresarial do Centro



The Investor Guide for Centro region intends to give a detailed view, to national and foreign investors, of the potentialities of this region while destination of new investments in the diverse economics’ activities. The elaboration of this Guide was made in the following bases: to be a practical guide (accessible to any investor, giving the necessary information to firms in the region and abroad), including (for the diversity of areas whom it approaches), synthetic (without too much harming the severity in the boarded substances, nominated the associates to the analysis of the legislation) and actual (including the available more recent statisticians and legislation in the beginning of 2004).

52


Um modelo de desenvolvimento para a Região Centro, uma perspectiva empresarial A Development Model for the Portuguese Centro Region, a business perspective,



CEC-CCIC - Conselho Empresarial do Centro



This document arises from an initiative of the CEC aiming at to participate in the debate on the future of Centro Region, contributing in particular for the dynamism of strategies, behaviours and roles in reply to the challenges that the economy of the region will have to face in a context of competitive times. The study it will have, still, to contribute for the reflection on the conditions of development and affirmation of the Centro Region, having in account two processes of economic and social convergence: of the country in relation to the communitarian average and of the region in relation to the average of the country. In this context, it centers its reflection on the development model that will have to allow the region to follow those movements. It represents in concrete a contribut of the enterprise sector of the Region Center for the deepening of the reflection on the model of development of the region, at the moment where it initiates a new cycle of public investment, in which III the Communitarian Framework Support will have a central role. Reflect, thus, the availability of the entrepreneurs to be participated actively in the process of economic transformation of the region, in a picture of partnership with the agencies of the administration of the State more directly involved in the public politics of regional incidence and in the support to the private sector.

Assessment of strategies & policies * Summarize the opinions of regional actors on successes and failures of the above described

strategies & policies with reference to your region. Table 52. Regional actors’ opinions about strategies & policies

The evaluation of the relevancy of the strategy of the PO CENTRO allowed to conclude that the hierarchy of priorities identified in the Program has been accomplish, therefore the widened spectre of objectives associated to each one of the Lines of Action of the Program, expressed in the diversity of objectives of the Measures, confers to the Program the great flexibility in its capacity to answer to the alterations verified in the Region. The PO CENTRO had a positive levels of effectiveness at the financial level, verifying a tax of approval next to the sums programmed for the period of 2000 the 2002; being that the main aspect that stands out of the evaluation of the effectiveness of the PO CENTRO is the fact of the financial programming has no considered the difficulties that the increment of strategically complexity and involvement of partners would infuse in the Program operational execution.

Regional programs towards SMEs List of programs

53

* List regional programs that influence SMEs development

(list of programs – English names) Table 53. Regional programs and SMEs development

Operational Programme for the Central Region - Measure I.5

* List regional programs that influence innovation

(list of programs – English names) Table 54. Regional programs and innovation

Programme of Innovative Actions in the Region of Centro, PRAI-CENTRO 2002-2003

Description of programs * Describe regional programs that influence SMEs development and innovation listed in two

previous tables. (multiply the table for the number of important documents)

Important remark: Do not limit your analysis to the programs governed by regional authorities and / or their agendas. Think of actions, trainings, etc. provided by universities, R&D institutions, chambers of commerce, etc. as well. Table 55a. (b, c, d…) Description of programs

Name of the program Programa Operacional da Região Centro (2000-2006)

Period 2000-2006

Managing authority Comissão de Coordenação de Desenvolvimento da Região Centro

Implementing authority Comissão de Coordenação de Desenvolvimento da Região Centro

Legal status of the above mentioned institutions and structure of their shareholders

Regional government body

Budget 2.858.111.950 euros for the all program; 57.161.239 euros for measure I.5

Origin of funds ERDF, ESF


The essential pillars of the development strategy to be implemented concern the qualification of human resources, the structuring of the territory and the qualification of the milieu, the strengthening of the competitiveness of the regional economy, exploring new opportunities and raising the value of resources in the region’s territory. The main strategic objectives which also form six priority intervention fields of the Region’s development policies, are:

54

· Citizenship, social cohesion and human capital · The urban system · The competitiveness of the regional economy · Geographic accessibility and exploitation · Water resources · Forest resources and forest management


· Municipalities and Municipal Associations

· Business Associations

· Regional Development Agencies

· Local Development Associations

· Private Social Solidarity Institutions

· Decentralised Services of the Administration

· Other public or private non-profit entities


Name of the program Programme of Innovative Actions in the Region of Centro, PRAI-CENTRO 2002-2003

Period 2000-2003

Managing authority Comissão de Coordenação de Desenvolvimento da Região Centro

Implementing authority Comissão de Coordenação de Desenvolvimento da Região Centro

Legal status of the above mentioned institutions and structure of their shareholders

Regional government body

Budget 3.710.000 euros for the all program

Origin of funds ERDF


The programme aims at the development of an innovation culture in the region. The competitiveness of the productive system and the excellence of the centres of research and technological development will be strengthened in order to incorporate new technologies within the region’s own industrial tradition.


Polytechnic Institutes and universities

Technological Centres and R&D institutions

Firms, specially industrials;

City councils and Associations of Cities;

Communitarian organisms of information and assistance technique to the SME’s;

Disconcentrated Public administration (CCRC);

55


Assessment of programs * Summarize the opinions of regional actors on successes and failures of the above described

programs with reference to your region. Table 56. Regional actors’ opinions about programs

Measure 1.5 – Support to economic activities, has revealed a poor performance in terms of financial execution, as far as concerned the average execution in the period 2000/2001.

In the period 2000-2002, the signature of a contract program has marked an inversion in its execution, which has showed prospects o a better financial execution and a higher impact on the qualification of firms and regional actor in SME support.

Nevertheless, the projects presented showed a higher concentration in urban regions (Coimbra, Aveiro, Viseu, Leiria), which shows the dynamics of this regions, but contributes even more to the gap between those urban centres and the rest of the region.

LOCAL LEVEL This part provides best practices of local strategies & policies as well as programs focused on SMEs. Local strategies & policies towards SMEs (Best Practices) Successful strategies & policies * Describe the success stories concerning implementation of local strategies and policies that

influence SMEs development and innovation. (multiply the table for the number of best practices)

Table 57a. (b, c, d…) Successful strategies & policies

56

As Portugal is not a regionalised country, except as regards the specific situation of the Atlantic archipelagos of Azores and Madeira, we will consider that local level equals regional level in terms of policies and strategies

Local programs towards SMEs (Best Practices) Successful programs * Describe success stories concerning implementation of local programs that influence SMEs

development and innovation. (multiply the table for the number of best practices)

Table 58a. (b, c, d…) Successful programs As far as training initiatives wit direct intervention in SME, there are national for SME training programs with regional and local emphasis (see table 83): Formação PME, from AEP – Associação Empresarial de Portugal InPME - from AIP – Associação Industrial Portuguesa Rede, from IEFP – Instituto de Emprego e formação Profissional: Theses programmes, supported by POEFDS, even if they are conceived at national level, their implementation is made by as vast network of local agents, which qualifies it, in our view, as a proxy to what could be a local program. The general objective of the SME training programme can be described as follows: To promote competitiveness of SMEs by upgrading managerial skills of entrepreneurs, training their executives and workers and consequently improving SME management and organisation. Alongside this general objective, the two main goals pursued are: 1. to upgrade human resources by incorporating training and consultancy inside SMEs; 2. to set up a system providing support and services for SMEs, based on a public-private partnership and supported by a territorially based network of institutions. The second goal stresses the need to set up a training infrastructure specifically targeted at SMEs. This is necessary because the available training is less adjusted to the specific needs of these enterprises regarding objectives, content and method. By introducing a network of territorial and sectoral bodies the new approach can be more easily promoted and transferred to SMEs in general, and not only to those SMEs involved in the programme. To upgrade human resources in SMEs several approaches have been introduced. The actual approach adopted depends on the organisation involved in the implementation of the programme. The aim of stimulating public-private partnership resulted in the selection of three different organisations for the implementation of the programme. The following three organisations were selected through a public tendering process: IEFP (Institute for Employment and Vocational Training); AIP (Portuguese Industrial Association); and AEP – Associação Empresarial de Portugal (Portuguese Firm’s Association). In general, the SME training programme offered the following services: training; advice; problem-solving counselling. These services are aimed not only at entrepreneurs but also at SME executives and workers. As evaluation results: in general, it was concluded by the evaluators that SME entrepreneurs have improved their management skills regarding problem identification, the definition of goals and the implementation of action plans. The positive outcomes of the programme as mentioned above are considered to be the result of the methodological approach of the programme, which consists of direct

57

intervention in SMEs through on-the-job consultancy. The consultant-trainers are thus of vital importance to the programme. The reach among SMEs indicates that the approach is well targeted at SMEs. General merits of the programme: the skills of SME employees have developed, especially the entrepreneurs’ management skills in very small enterprises. The intervention model for very small enterprises has proven to be effective (diagnosis, action, plan, training, in-company action). The in-company support has proven to be effective for organisational problems in very small enterprises. The young graduates have strengthened the company structure. The ability of the territory- and sector-based associates to intervene in SMEs has been strengthened. Dissemination of the results of the programme has been put in place (best practices, information and reflection). A network of participating entrepreneurs, consultants, trainers, partners and institutions has developed. This positive impression of the training programme for SMEs is also reflected in the opinions of the extensive number of entrepreneurs, consultants and trainers who presented their experiences with the programme at the meeting.

Among the positive aspects mentioned by entrepreneurs are increased turnovers, an increase in employment, entry on new (export) markets, a strengthened company structure and the fact that the programme had made them ‘stop and think’ and start to work on the basis of a strategic plan.

Actors of SMEs support in region The analysis of strategies, policies and programs allowed identification of some of the actors that influence SMEs support in regions. Nevertheless it is not a completed list. In this part a possibly wide range of actors will be identified. * Describe relevant information concerning the actors. Table 59. Actors of SMEs support in the region

Name Profile Public / Private Structure of shareholders National government and its agendas:

IAPMEI - Instituto de Apoio às Pequenas e Médias Empresas e ao Investimento

Public Institute Public Ministry of Economics

Direcção Regional do Centro do Ministério da Economia (DRE-CENTRO)

Regional Ministry of Economy Agencies

Public Ministry of Economics

IEFP – Instituto de Emprego e Formação Profissional

Public Institute Public Ministry of Labour

Regional government and its agendas:

CCDRC – Comissão de Coordenação de Desenvolvimento Regional do centro

Public Administration Public Ministry for Environment, Spatial Planning and Regional Development

Other regional level institutions:

ANJE - Associação Nacional de Jovens Empresários - Núcleo do Centro

Young Entrepreneurs association – Centro pole

Private Young Entrepreneurs association (national level)

ABIMOTA - Associação Nacional das Indústrias de Duas Rodas, Ferragens, Mobiliário e Afins

National Association of metals - mechanics firms / technical services provider

Private Metalo - mechanics firms (specially form Centro Region)

58

Name Profile Public / Private Structure of shareholders

Key business organisations/associations:

CEC Centro Region Chamber of Commerce and Industry

Private Industrial and commercial associations form Centro region

AIDA Aveiro Industrial Association Private Firms form Aveiro District

ACIC Coimbra Industrial and Commerce Association

Private Firms form Coimbra District

AIRV Viseu Enterprises Association Private Firms form Viseu District

ACG Guarda Commerce and Services Association

Private Firms form Guarda District

NERCAB Castelo Branco Enterprises Association

Private Firms form Castelo Branco District

NERGA Guarda Enterprises Association Private Firms form Guarda District

NERLEI Leira Enterprises l Association Private Firms form Leiria District

Key research – industry interface organisations:

IPN R&D and tech Transfer Association promoted by Coimbra University

Private Coimbra University, Public institutes, industrial associations and firms, both local and national

grupUNAVE Private Firm for tech-transfer, studies and interactions with business environment

Private Aveiro University

ADIV Private association for tech-transfer, studies and interactions with business environment

Private IPV – Viseu Polytecnique Institute is the main promoter, but other local associations , singular researchers and local firms are associated

CTCV Technological centre for the ceramics and glass Private Ministry of Economy and

Industrial Associations

CENTINFE Technological centre for the moulding industry

Private Ministry of Economy and Industrial Associations

CITEVE Technological centre for the textile industry

Private Ministry of Economy and Industrial Associations

Key research / education institutions:

Aveiro University (UA) State University Public Ministry for Science, Technology and Higher Education

Coimbra University (UC) State University Public Ministry for Science, Technology and Higher Education

Beira Interior University (UC) State University Public Ministry for Science, Technology and Higher Education

IPC – Coimbra Polytecnique Institute

The polytechnic system began offering higher education in the 1980s after the former industrial

Ministry for Science, Technology and Higher Education

59

Name Profile Public / Private Structure of shareholders and commercial schools were converted into engineering and administration higher education schools

IPL- Leiria Polytecnique Institute

Applies above Public Ministry for Science, Technology and Higher Education

IPV – Viseu Polytecnique Institute


IPG - Guarda Polytecnique Institute


IPCB - Castelo Branco Polytecnique Institute


The Catholic University (UCP) A pole from the Catholic University located in Viseu

Private Catholic Church

Instituto Superior Bissaya Barreto

Coimbra Private university with a focus on management, law and socials services

Private The Fundação Bissaya Barreto – a private foundation

ISMT – Instituto Superior Miguel Torga

Coimbra Private university with a focus on health and socials services, management and informatics

Private Coimbra Municipality District Assembly

Instituto Superior de Línguas e Administração - ISLA (Leiria)

Leiria Private university with a focus on management and humanities

Private Corporation (Sociedade Anónima, S.A.)

Institutos Superiores da Marinha Grande (ISMAG/ISHT)

Marinha Grande Private institutes with a focus on management and healt

Private Private universities and cooperatives

Key non-public financial service providers for SMEs:

Key non-public consultancy providers for SMEs:

Key local actors: ACIM - Associação Comercial e Industrial da Mealhada Firm’s Association Private Firms form the mentioned

Districts

AIC - Associação Industrial de Cristalaria Firm’s Association Private Firms form the mentioned

Districts

60

Name Profile Public / Private Structure of shareholders Associação Empresarial de Mangualde Firm’s Association Private Firms form the mentioned

Districts

AEL - Associação Empresarial de Lafões Firm’s Association Private Firms form the mentioned

Districts

ACOAG - Associação Comercial de Águeda Firm’s Association Private Firms form the mentioned

Districts

NEVA - Núcleo Empresarial de Vagos Firm’s Association Private Firms form the mentioned

Districts

ACISP - Associação Comercial, Industrial e de Serviços do Concelho de Peniche

Firm’s Association Private Firms form the mentioned Districts

ACIMG - Associação Comercial e Industrial da Marinha Grande Firm’s Association Private Firms form the mentioned

Districts

ACICB - Associação Comercial, Industrial e de Serviços de Castelo Branco, Vila Velha de Rodão e Idanha-a-Nova


ACICS - Associação Comercial e Industrial do Concelho de Seia


ACCCRO - Associação Comercial dos Concelhos de Caldas da Rainha e Óbidos


ACG - Associação do Comércio e Serviços da Guarda


HRCentro - Associação dos Industriais de Hotelaria e Restauração do Centro

Tourism firm’s Association Private Firms form the mentioned sector

ACICF - Associação Comercial e Industrial do Concelho do Fundão


ACA - Associação Comercial de Aveiro Firm’s Association Private Firms form the mentioned

Districts

AEC - Associação Empresarial de Cantanhede Firm’s Association Private Firms form the mentioned

Districts

ACDV - Associação do Comércio e Serviços do Distrito de Viseu


AICP - Associação de Industriais do Concelho de Pombal


ACILIS - Associação Comercial e Industrial de Leiria, Batalha e Porto de Mós


ACITAM - Associação Comercial e Industrial do Concelho de Trancoso, Aguiar da Beira e Mêda


ACIP - Associação do Comércio e da Indústria de Panificação, Pastelaria e Similares


61

Name Profile Public / Private Structure of shareholders ACIFF - Associação Comercial e Industrial da Figueira da Foz Firm’s Association Private Firms form the mentioned

Districts

ACIS - Associação Comercial e Industrial da Sertã, Proença-a-Nova, Vila de Rei e Oleiros


ACIB - Associação Comercial e Industrial da Bairrada Firm’s Association Private Firms form the mentioned

Districts

AIA - Associação Industrial de Águeda Firm’s Association Private Firms form the mentioned

Districts

AECBP - Associação Empresarial da Covilhã, Belmonte e Penamacor


Other actors:

IFDEP - Institute for the Promotion and Development of the Entrepreneurship

Non-profit Private Local Entrepreneurs

Fill in the table below with relevant information concerning the actors. Add rows where necessary. Interrelations between actors The SMEs support in region is not a simple sum of activities undertaken by numerous actors of the SMEs support system. In modern economy, the success of almost every activity lies in taking advantage of co-operation. Nevertheless, the actors focused on supporting SMEs in region may on one hand co-operate and on the other compete against each other. The so called co-opetition of institutions and networks has become the driving force behind many of new processes, programs and initiatives in regions. This section allows identification of interrelations between the actors.

62

Mapping the actors * Try to sketch the “map” of major actors focused on SMEs support in your regions. Think of

possible interrelations and interdependencies. Show hierarchical and network approach where appropriate.

Financial System• Banking and insurance• Financial markets• Venture Capital organisations• Business Angels• Investment Societies• Mutual Guarantee Societies• VC Syndication Funds

Key research – industry interface organisations / consultancy services• Technology centres• Technology transfer centres• C&T parks• Incubators• New Technology Institutes• Technology brokers• Technology support organisations• Consultancy companies• Employers’ associations• Trade unions

Public Administration and Agencies• Minister Assistant to the Prime Minister• Ministry of Economic Activities and Labour• Ministry of Science, Innovation and Higher Education• Ministry of Education• Ministry of Social Security, Family and Children• Ministry of Agriculture• Ministry of Public Works, Transportation and Communication• Ministry of Towns, Local Administration, Housing and Regional Development• Ministry of Environment and Territorial Management• Ministry of Finance• Public Agencies (AdI, UMIC, IAPMEI, API, ICEP, IPQ, INPI, FCT, GRICES, OCES, Competition Authority, IEFP, INOFOR)• Operational Programmes Management Cabinets

Education, Training and Research• University and Polytechnic Institutes• Secondary schools• Professional Schools• Training organisations• University research organisations• University-based interface organisations• Public laboratories• Centres for granting, validating andcertifying competences

Companies

Regular links in SME’s support

Irregular links in SME’s support

63

Assessment of interrelations * Identify major players, their resources and stakes. Describe the main processes illustrated above

and summarize the regional actor’s opinions on the nature, efficiency and effectiveness of the system. Show possible “co-operation gaps” and explain their origin.

Table 60. Assessment of interrelations The Institute for the Support of Small and Medium-sized Enterprises (IAPMEI) is the main agency to promote and implement policies aimed at encouraging business development with the aim of enhancing the competitiveness of Portugal’s micro, small and medium-sized companies (except in the tourism sector). Portuguese companies have a very low propensity to undertake R&D activities and innovation processes. This is partly due to their sectoral specialisation in traditional, supplier-dependent industries, but it is also associated with insufficient in-house competencies both in strategy making and in technological expertise. The strategic relevance of research activities is not fully recognised, the capability to ‘interpret’ and anticipate market trends is low, and companies’ technological bases are weak. Efforts have been undertaken to redress the situation; there was an increase in business enterprise R&D expenditures and some success cases may be identified. There is, however, a need to strengthen companies’ technological capabilities and research activities. SME’s programs are mainly executed trough the Ministry of Economy, except were there closely connected with R&D activities, where normally the Ministry of Science is also involved, or some sector actives that may involve the ministry of each area. The programs are then execute by the respective cabinets, with support from the public agencies as mentioned before. The projects implemented in the framework of this programs (R&D consortia, innovation, training, etc) usually have the collaboration of Education, Training and Research organizations and/or Key research – industry interface organisations / consultancy services firms. The system is “accused” of numerous gaps, namely the usual red tape and bureaucracy associated with state programs, and a top-down approach that ignores local level specifications and needs, and specialy, SMEs timmings (fasters than public’s). There is a consensus that the low educational level of the population is the main weaknesses of Portugal. The SME’s actors often complain about the gap between what’s taught at scool and what business needs. The past years have shown a positive effort form the polytechnic sector, universities and training organizations in general. University-Industry co-operation is often used in Portugal as a ‘magic formula’ to overcome the weaknesses in R&D and innovation activities. The need to stimulate ‘technology transfer’ between the University and Industry is being mentioned in the policies of funding for research units, to generate virtuous circles of technological development and an upsurge in innovation. Even now, the R&D expenditures made by SME’s in one of the lowest in Europe, and one of the biggest gap’s in SME’s support model. Since E.C. accession, in 1986, financial incentives have dominated the scene of innovation policy, while insufficient attention was given to the needs of firms, especially SMEs, in the areas of business services, business advice, and skilled human resources. Several projects were aimed at strengthening companies ‘absorptive capacity’, but the results appear to be limited. There was an insufficient selectivity, and tangible investments prevailed over intangible ones. The measures for supporting the dynamisation of technology, training and quality systems was also expected to have an indirect effect on SMEs ‘absorptive capacity’; the same happens with the POCTI/POSI integration of Doctors and Masters in firms (PT 22), but results still qualify this link as a gap. The Financial System organizations have in important role in financing some of these projects above mentioned, where private money is involved. The biggest gap here often is venture and seed capital for high-tech SME’s, as the Portuguese innovation financing system is credit-based, bank loans being the main source of external financing for Portuguese firms, and often SME’s lacks the capacuty to invest and grow. To bridge this gap, IAPMEI promotes the Guarantee Scheme to promote Venture Capital ("Dinamização do Capital de Risco"), and the Project to enhance Mutual Guarantee Schemes ("Projecto de Dinamização do Caucionamento Mútuo"), a system whereby a number of mutual financial guarantee companies help SMEs to secure access to finance by acting as a "guarantor" for the investment, but the Portuguese venture capital sector, relative to the size of the economy, remains one of the smallest in the OECD and Europe.

64

II.1.2. Specific programs and policies SME-oriented: women, disabled, exclusion Support to women’s enterprise List of strategies & policies * List strategies and other policy documents that influence SMEs led/owned by women in your

region. (list of strategies and other policy documents – English names) Make sure that they are described in detail in chapter “Strategies & policies, programs, actors, interrelations (interdependencies)”.

Table 61. Strategies and other policy documents and influence on women SMEs

POEFDS -Training and Social Development Operational Programme

Mulheres na vida empresarial / Maria das Dores Guerreiro. PUBLICAÇÃO:,Lisboa : CIDM, 1998

List of programs * List programs focused on SMEs led/owned by women in your region

(list of programs – English names) Make sure that they are described in detail in chapter “Strategies & policies, programs, actors, interrelations (interdependencies)”.

Table 62. Programs and focus on women SMEs POEFDS -Training and Social Development Operational Programme (National Level) Area 4 – Promotion of the effectiveness and equity of employment and training policies Measure 4.4 – Promotion of Equal Opportunities between Man and Women~ Measure 4.4.2.3. Support to Women Entrepreneurship

Major actors * List major actors involved in supporting women’s enterprise in your region.

(list of actors – English name) Table 63. Major actors supporting women SMEs APME - Associação Portuguesa das Mulheres Empresárias APME is the first association of women entrepreneurs to be constituted in Portugal, born in August 1985. Its headquarters are in Lisbon, but has a national coverage, with representation in all the domestic territory. It has for goals the spreading and promotion of the female entrepreneurship, as lead entrepreneurs and managers, in Portugal and abroad. APME efforts have result, among other things, in the introduction of gender analytical statistics in the public body’s analysis (Ministry of the Economy, IAPMEI, ICEP, INE, etc.). In Centro region, PAME has a pole in Coimbra and Viseu. CIDM - Comissão para a igualdade e para os direitos das mulheres (Commission for the Equality and the Rights of Women) The Commission is a national body and was created in 1991 by the government in order to achieve the following objectives: Contribute so that women and men enjoy the same opportunities, rights and dignity;

65

Attain an effective sharing of responsibilities between men and women in all levels of life (family, professional, social, cultural, economic, and political); Work for the recognition of motherhood and fatherhood as important social functions and that society has responsibilities towards them. The CIDM is organised in three technical divisions ('education and training', 'documentation, information and publication' and 'legal assistance') and is active in numerous specific areas, such as the conciliation of family and professional life, gender violence, education, cooperation between local and regional government, studies and publications.

CIDM has produced important documentation and studies to the dissemination of knowledge about issues of equality; namely in the business world and entrepreneurship

The IFDEP - Institute for the Promotion and Development of the Entrepreneurship in Portugal is a non profit organization, which aims to promote entrepreneurship and business development. IFDEP intends to assume an active role in entrepreneurship promotion and enterprise initiative, supporting directly firms in creation phase.Its work passes for the support to the companies in all the areas, namely to the level of the identification of chances of business, enterprise organization, management and marketing. IFDEP chose Centro Region to carry through the project FAME, a Program of consultancy and training to support firm’s Creation destined the Women Entrepreneurs.The project is destines to women, employed or unemployed, whom intend to integrate the labour market through the creation of a proper job.The FAME is a program of advanced formation directed the women with will to bet in the concretion of its ideas of business. In the end of the formation, trainees whom opt create a firm; will be supported by teams of multidisciplinary consultants, which it will assist in the elaboration of a business-oriented plan.For the development of this program the IFDEP counts on with a experienced team of trainers and consultants. In the year of 2005, IFDEP intends to extend the program to national level. Quantitative indicators * Provide the following indicators: Table 64. Quantitative indicators Number of SMEs led/owned by women receiving support per year (state the year) in the region

Data not available

Amount of money granted to SMEs led/owned by women within the frameworks of dedicated programs (state the year) in the region

Data not available

Number of identified SMEs led/owned by women in the region Data not available Percentage of SMEs led/owned by women in total number of registered SMEs in the region

Data not available

Support to SMEs employing the disabled List of strategies & policies * List strategies and other policy documents that influence SMEs that employ the disabled in your

region (list of strategies and other policy documents – English names) Make sure that they are described in detail in chapter “Strategies & policies, programs, actors, interrelations (interdependencies)”.

Table 65. Strategies and other policy documents and influence on disabled

LAW 38/2004 (18th August 2004), Defines the general bases of the legal system for prevention, habilitation, rehabilitation and participation of people with disability.

Plano Nacional para a Participação dos Cidadãos com Necessidades Especiais na Sociedade da Informação (PNPCNESI, RCM n.º 110/2003, de 12 de Agosto)National plan for the Participation in Information Society of of Citizens with Special Necessities)

Plano Nacional de Emprego 2004 (PNE 2004) - National Employment Plan 2004 PNE 2004, approved in the Ministers Cabinet of 25 of November of 2004, is integrated in the second phase of the European Strategy for Employment (EEE). The promotion of the full employment, the quality improvement and the productivity of the work and the reinforcement of the inclusion and social cohesion continue to be Europeans objectives to materialize in Portugal, namely through the short and medium term interventions planed in the PNE.Enunciating the developed strategy and interventions already, PNE 2004 states the strategy developed and its implementation and defines eventual reorientations to reach the objectives adopted for period 2003-2006. Program of intervention for People with Deficiency: - Supports to entrepreneurship and own job creation;¶

66

- Supports to the elimination of architectonic barriers in labour post;¶ - Professional training. GOALS 2005-2008: 216 M€ Investment and 46.000 of persons involved

List of programs * List programs focused on SMEs that employ the disabled in your region


Table 66. Programs and influence on disabled


Area 5 – Promotion of Social Development

Measure 5.2 – Promotion of Social and Vocational Integration of the Disabled

Major actors * List major actors involved in supporting SMEs that employ the disabled in your region

(list of actors – English name) Table 66. Major actors involved in supporting SMEs employing disabled SNRIPD - Secretariado Nacional para a Reabilitação e Integração das Pessoas com Deficiência . The National Secretariat for the Rehabilitation and Integration of People with Disabilities (SNRIPD) is a public national body with administrative autonomy that operates under the auspices of the Ministry of Labour and Social Solidarity whose main purpose is to co-ordinate national policy on the rehabilitation of people with disabilities. Its action Areas are: Promotes technical and financial support to NGOs and ensures social cooperation; Informs, directs, guides and cooperates with public and private bodies to solve problems or situations presented personally. Provide personalised support to people with disabilities, their families, departments and organisations that deal, directly or indirectly, with disabilities or rehabilitation. Promotes and intensifies information and awareness campaigns so as to raise awareness in Portugal of the issues on rehabilitation and integration of people with disabilities. Undertakes technical studies on rehabilitation and prevention of disabilities - within health, education, training, employment, social security, culture, leisure and sport fields - and proposes appropriate measures. Carries out surveys and studies that enable the assessment and examination of resources used in the rehabilitation sector, with a view to producing an inventory of services and institutions. As the body entrusted by the National Institute of Statistics to the disability and rehabilitation sector, the SNRIPD collects, processes and publishes data on the sector, takes part in the defining of concepts and performs statistical analysis. Prepares opinions on and proposes legal measures related to the development and implementation of the national rehabilitation policy and supports all working groups operating under SNRIPD. Ensures the production of technical and educational publications dealing with disability and rehabilitation through three collections: SNR Books, SNR Manuals and SNR Leaflets. Collects, develops and publishes bibliography, legislation and audiovisual materials on disability and rehabilitation by means of computerised data bases available in a Library open to the public. Provides complementary training aimed at those working in the rehabilitation fields, and provides logistic and technical support to training events promoted by other entities.

Encourages, monitors and supports national policy on research, innovation and scientific and technological development in the disability and rehabilitation sector by providing financial and logistic support to projects in these fields.

67

Quantitative indicators * Provide the following indicators: Table 67. Quantitative indicators Number of SMEs that employ the disabled receiving support per year (state the year) in the region

Data not available

Amount of money granted to SMEs that employ the disabled within the frameworks of dedicated programs (state the year) in the region

Data not available

Number of identified SMEs that employ the disabled in the region Data not available Percentage of SMEs that employ the disabled in total number of registered SMEs in the region

Data not available

Support to SMEs run by the threatened with social exclusion List of strategies & policies * List strategies and other policy documents that influence SMEs run by the threatened with social

exclusion in your region (list of strategies and other policy documents – English names) Make sure that they are described in detail in chapter “Strategies & policies, programs, actors, interrelations (interdependencies)”.

Table 68. Strategies and other policy documents and threatened with social exclusion Plano Nacional de Emprego 2004 (PNE 2004) - National Employment Plan 2004 PNE 2004, approved in the Ministers Cabinet of 25 of November of 2004, is integrated in the second phase of the European Strategy for Employment (EEE). The promotion of the full employment, the quality improvement and the productivity of the work and the reinforcement of the inclusion and social cohesion continue to be Europeans objectives to materialize in Portugal, namely through the short and medium term interventions planed in the PNE.Enunciating the developed strategy and interventions already, PNE 2004 states the strategy developed and its implementation and defines eventual reorientations to reach the objectives adopted for period 2003-2006. Program of intervention for public with special difficulties of insertion (threatened with social exclusion): - To boost the measures of the Labour Social Market, namely social enterprises and programs aimed at that objective (POEFDS); - To promote the formation and skills certification; - To develop the micro-credit as nationwide measure.¶ GOALS 2005-2008: 461 M€ Investment and 153.000 persons involved

List of programs * List programs that influence SMEs run by the threatened with social exclusion in your region


68

Table 69. Programs and threatened with social exclusion


Area 5 – Promotion of Social Development

Measure 5.3 – Promotion of Social and Vocational Integration of Underprivileged Groups

Major actors * List major actors involved in supporting SMEs run by the threatened with social exclusion in your

region (list of actors – English name)

Table 70. Major actors involved in supporting SMEs threatened with social exclusion

The most important organizations in this field are the so called third sector or non-profit associations, which have for goals the support to people fade with exclusion, and thought they are not exclusively oriented to firm’s creation, they conduct projects like this in their regular activities. There is a vast number of associations of this type in Centro Region, and it is difficult to highlight one in particularly. A list of these associations can be found in a online database at: http://www.dgeep.mtss.gov.pt/estudos/cartasocial.php.

Quantitative indicators * Provide the following indicators: Table 71. Quantitative indicators Number of SMEs run by the threatened with social exclusion receiving support per year (state the year) in the region

Data not available

Amount of money granted to SMEs run by the threatened with social exclusion within the frameworks of dedicated programs (state the year) in the region

Data not available

Number of identified SMEs run by the threatened with social exclusion in the region

Data not available

Percentage of SMEs run by the threatened with social exclusion in total number of registered SMEs in the region

Data not available

69

III. SUPORT SYSTEM FOR SMEs - Benchmarking practises IMPLEMENTATION PHASE III.1 DIRECT SUPPORT to SME III. 1.1 Improving access to core capital FINANCING, FUNDING, CAPITAL SUPPLY, FINANCIAL AND MARKET EXPERTISE Role of regional/local authorities in supporting SMEs * Describe shortly the “state of art” in terms of activities regarding:

- state, regional and local funding - equity finance, loans, guarantees for SMEs - tax incentives - EU funding (grants and subsidies) mapping the SMEs subsidised by EU funds - public funding schemes for SMEs - other forms of financial support - prerequisites for acquisition of venture capital and risk

capital - activities and procedures improving access to venture capital - stimulation of external financing for local activities

Table 72. The supporting activities As it concerns the access to finance for smaller enterprises and at an earlier stage, and finance for expanding SME’s, we have several programmes in action promoted by IAPMEI:

The programme "Dynamising Financial Engineering" ("Dinamização da Engenharia Financeira") was created in 1997 with the aim of providing financial support to companies. It comprises four parts: SME risk analysis, programme promotion, research and development and implementation of instruments. The three main instruments are the following: a bank loan scheme, a guarantee scheme, to promote venture capital, and a mutual guarantee scheme exclusively for SMEs. The Bank Loan Scheme ("Mecanismo de Bonificação de Taxa de Juro") is a preferential interest rate mechanism for SMEs, co-ordinated by IAPMEI. Under this scheme, enterprises can obtain bank loans where the applicable interest rate is partially financed by IAPMEI (within a certain threshold), according to co-operation protocols agreed between IAPMEI and several financial institutions. A total of 503 SMEs are benefiting from this scheme, representing € 805 million in operations supported. The Guarantee Scheme to promote Venture Capital ("Dinamização do Capital de Risco"), aims to provide financial support throughout the life cycle of an enterprise: start-up, expansion, introduction of new technologies and re-structuring of activities. Funding is provided through two financial institutions, one in Lisbon (private equity for expansion) and the other in Oporto (support for start-ups). A total of € 45 million has been made available to risk capital operators, which have provided capital to a total of 43 SMEs so far. The Project to enhance Mutual Guarantee Schemes ("Projecto de Dinamização do Caucionamento Mútuo"), launched in 1994, developed a system whereby a number of mutual financial guarantee companies help SMEs to secure access to finance by acting as a "guarantor" for the investment. In order to benefit from this scheme, SMEs must contribute to the capital of a mutual guarantee company ("SPGM-Sociedade Portuguesa de Garantia Mútua"). While the system has so far been based on this large "holding" company, five regional subsidiaries are being set up in 2000. A total of 188 SMEs are being supported through this scheme, corresponding to grants of over € 42 million.

As regards finance for expanding firms, the SME Excellence Award (PME Excelência) was created in 1997 to distinguish the best performing SMEs (in industry, trade, tourism and services) in terms of growth capabilities and financial profile. The winners of the award are eligible for special financial benefits (such as access to long-term loans and special interest loans) and receive public recognition (the list of winners is widely advertised in the national press). In 1999, a total of 1 389 enterprises presented an application and 720 were awarded the prize (296 in trade, 293 in industry, 68 in construction, 37 in services and 26 in tourism). As far as it concerns the Portuguese innovation financing system, it is a credit-based system, bank loans being the main source of external financing for Portuguese firms, especially SMEs. But financial support provided under operational programmes has been also extensively used to promote innovation projects. R&D consortia were promoted under PRAXIS XXI (PT 1) and more recently under POCTI and POSI (PT 21). The main instruments, however, have traditionally come from programmes managed by the MEc, under PEDIP (PT 3, PT 9, PT 10 and PT 12) and PRIME/POE (PT 15, PT 16, PT 20, PT 24, PT 25, PT 31 and PT 32). In the late 2002/early 2003, a host of new measures were launched, in the context of PPCE and PRIME, already presented in our previous report37: IDEIA (PT 33), on R&D consortia; NEST (PT 34), on new technology-based firms; NITEC (PT 36), on the creation of in-house R&D teams in firms; and DEMTEC (PT 37), on pilot projects on technology innovative products and processes. These four programmes, together with the new SIME Inovação (PT 40), are the cornerstones of the innovation support building designed by the government. An important role is also played by venture capital, namely through the creation of venture capital syndication funds (PT 31), and in connection with NEST (PT 34).

70

Several new initiatives, and revisions of older programmes, were launched with regard to innovation financing. Our analysis will mainly focus on the programmes of MEc. Still, under the aegis of MCES, the Doctoral Grants in Companies (PT 43) and the regime of Scientific Patronage (PT 45) may have a positive influence on company innovation activities, though they are chiefly concerned with the financing of scientific research and University- Industry linkages. The main measure launched by the MEc was the much awaited SIME Inovação (PT 40), in the context of the PRIME operational programme. SIME Inovação corresponds to the autonomisation of innovation and technological matters from the general SIME programmes, on promoting company modernisation (PT 16). The new programme provides support for R&D activities leading either to new products, processes and systems or to significant improvements in those already existing in the company. More specifically, eligible projects should concern industrial research or pre-competitive development. Eligible expenditures include namely the wages of employees fully dedicated to R&D activities, scientific and technical assistance expenditures, and technology transfer or acquisition operation leading to the ‘endogeneisation’ of the technology concerned. Taken together with IDEIA (PT 33) and NITEC (PT 36), SIME Inovação may provide an important lever for Portuguese companies to increase their engagement in innovation activities38. Worth special reference is also the incentive system for firm co-operation (PT 41). In spite of being specifically focussed on promoting co-operation, this system may provide financing for firm consortia or networks dealing with product design and development. It is, however, to be seen whether firms will profit from this programme to get financial support for co-operative research and innovation projects. A possible barrier is the obligation to express the co-operation into a legally independent firm, separated from their ‘parents’ or promoters. Three other measures which may contribute, though indirectly, to the financing of innovation activities are: the PRIME Jovem programme (PT 39), addressed to companies created or managed by young entrepreneurs; the regulation on human resources training (PT 44), to the extent that it may be applied to enhance the skills of people engaged in R&D and innovation activities; and the regulation on technology, training and quality infrastructures (PT 42), though this is especially addressed to support organisations, and not to firms themselves. Several programmes with a bearing on innovation financing were subject to changes in the period under review. One was IDEIA (PT 33), where rules regarding the revenues from industrial property rights were introduced, as indicated above. The others were the main company incentive systems – SIPIE (PT 15)39 and SIME (PT 16)40. Both replace the previous guidelines, defining new procedures for the calculation of the incentives, aimed at fostering productivity. For both, an increase of five percent in incentive rate is assigned to young entrepreneurs; for SIPIE, addressed to small company initiatives, a majoration of five percent is also granted for companies created and managed by individuals coming from companies under restructuring. The improved incentive conditions for young entrepreneurs are also associated with the PRIME Jovem programme (PT 39). This programme includes a strand aimed at creating the conditions for launching innovation activities by young entrepreneurs; this enables improved conditions in the access to incentives under QUADROS (PT 35), IDEIA (PT 33), DEMTEC (PT 37) and NITEC (PT 36). Prime Jovem encompasses actions concerning venture capital: in the context of the PRIME Venture Capital Syndication Fund (PT 31), an amount of EUR 15 million is exclusively assigned to supporting projects undertaken by young entrepreneurs. Venture capital is indeed envisaged by the government as an important instrument for promoting innovation and entrepreneurship. There was a concern with the improvement of the framework for venture capital operation, expressed in measures taken in the context of PPCE. After the definition of the ‘financial innovation’ measure of POE, now PRIME (PT 24 and PT 25), still in 2001, the measures on Venture Capital Syndication Funds (PT 31) and the Fund for Guaranteeing Credit Certificates (PT 32), the launching of venture capital syndication fund PME-IAPMEI and the prominent role assigned to venture capital in the working of the NEST programme (PT 34), the ground for the development of venture capital as an innovation financing mechanism is established. UMIC has launched NEOTEC, a programme aimed at stimulating entrepreneurship and providing seed capital. Portugal now appears to be a very attractive country for venture capitalists: according to a study carried out by EVCA, Portugal is ranked sixth in terms of tax and legal environment for the venture capital business.

Other actors: commercial banks and other private and semi-private institutions * Describe praxis in:

- commercial banks – their competency in dealing with SMEs - business financial supporting services - financial systems for:

o short term profitability o long-term profitability

- local bank services - financial support - “business angels” - venture capital - risk management

- support in: o marketing assistance o competitive positioning of firms

Table 73. The financing praxis

71

Portugal's accession to the European Union (EU) in 1986 prompted a series of policy measures which liberalized the the banking sector. As a result, the Government's share of total shareholder equity in the banking system declined from 90 percent to 30 percent in the ten years after joining the EU. The only major financial institution which remains in Government hands is Caixa Geral de Depositos (CGD). Four banking groups dominate Portugal's banking sector. Nevertheless, Portuguese banks remain relatively small by European standards and the next few years could witness considerable cross-border integration within the EU. Short-term and medium-term financing are readily available. Overdrafts are the most common source of short-term financing for corporations. The issuance of commercial paper began in 1993 and has grown rapidly. The placement of bonds by corporations is the preferred medium-term financing instrument. Intercompany borrowing is also common. The most common form of finance for SME s are overdrafts and loans., but services as asset finance –hire purchase and leasing, or Cash Flow Finance, specially factoring, are available form numerous banks and financial institutions. Most banks have SMEs as segmented market, with customized products, including credit products.

About the Portuguese venture capital market , the government still has a dominant role in the. The first public venture capital programmes were put in place in 1986 as a segment of the Programa Específico de Desenvolomento de Industria Portuguese 1 (PEDIP 1). Through this programme, funds were distributed via the Portuguese Institute for Support of Small and Medium Enterprises (Instituto de Apoio às Pequenas e Médias Empresas) (IAPMEI) to two government venture capital firms, Norpedip and Sulpedip (known as PME Capital and PME Investimentos since 1999). Under POE and now PRIME , PME Capital and PME Investimentos remain the primary public vehicles for venture capital investment of IAPMEI funds. However, in 2001, as part of an effort to increase their efficiency as well as to ease confusion, the investment focus of each was clarified. PME Capital now concentrates on early-stage projects, while PME Investimentos takes on later-stage activities, including the MBO/MBI segment of the private equity market. The two SCRs continue to manage a set of similar funds, including Retex which focuses on firms in textile-producing regions. The government also reorganised several public funds under the Fundo de Sindicação de Capital de Risco (FSCR) in the attempt to focus more on leveraging private venture capital. In particular, the Novas Empresas de Suporte Tecnológico (NEST), approved in late 2002, is directed to helping seed-stage projects obtain financing from public and private SCRs and FCRs. NEST focuses on technology-based firms deemed to have high-growth potential. Equity guarantees offered to private venture investors are intended to attract funding to early-phase firms. Follow-on funding for successful firms may then be obtained from other public sources such as PME Capital, giving the programme an important degree of continuity should private funding prove elusive.

In the past, government funding programmes served to crowd out private investment as business owners preferred direct subsidies rather than forgo partial ownership to potential investors. Furthermore, public investments and subsidies that targeted ailing firms and regions kept uncompetitive businesses in the market, hindering the rise of new firms and entrepreneurs. Starting with the FSCR and NEST programmes, public venture schemes should focus on leveraging private funds and promoting a private equity culture and environment. Diverse government venture capital programmes should also be rationalised and simplified to reduce confusion and overlaps in providing finance to the small firm sector.

According to the European Business Angels Network (EBAN), business angel activity in Portugal is largely informal and limited in scope. Although there are no specific fiscal incentives for individual investments in small firms, business angels could benefit from the zero tax on long-term capital gains and from tax breaks given to investors in FCRs and SCRs. There are at present no public or private networks to link business angels with entrepreneurs and investment opportunities. The Portuguese Venture Capital Association (Associação Portuguesa de Capital de Risco) (APCRI), established in 2000, is building its membership and organising some networking events.

Source: Venture capital market sources: OECD (2003), Venture capital policy review: Portugal, STI working papers 2003/18

72

III.1.2 Improving access to knowledge and business/market information * Describe shortly, how the regional/local authorities work for improved access of SMEs to:

- local and regional information, - local websites and portals for SMEs support - interactive governance,

Table 73a. Improving access to knowledge and business/market information At national level, but used and produced at national/regional level, we can find those two exemples:

A considerable effort has been made to provide information to SMEs in an accessible and user-friendly manner. This has included the creation of a network of first-stop shops, the provision of information and services on the Internet, and the production of tailor-made guides (e.g. a guide on trade ("Guia do Comércio") produced by the Directorate-General for Trade and Competition). The SINmPE Information Service, co-ordinated by IAPMEI, is an information service for the business community targeted at micro-enterprises and SMEs. Information on issues such as the formalities required to set up a business, incentives for investment, tax benefits, technical assistance, etc. is provided through first-stop shop offices (currently 15 throughout the country), a website, an e-mail and a free telephone line.

The NETFIN website was also created in order to improve SMEs’ access to information on markets, financial instruments, legislation, and the economic and financial environment. The products and services offered on the site can be accessed free of charge by using a given password. Special benefits are offered to SMEs which have received the SME Excellence Award. NETFIN also provides a forum to exchange information and good practices as well as access to a number of databases.

Currently, these two services have been integrated in fully renewed IAPMEI main webpage at http://www.iapmei.pt

Other measures include the enlargement and improvement of Portal do Cidadão (http://www.portaldocidadao.pt/), a web portal providing information on a wide range of matters (creation of companies, taxes, tourism, administration, etc.) involving information from approximately 50 administrative services. Portal do Cidadão is an evolution forma an percusros project called InfoCid. Infocid was initially created in 1991 under the initiative of SMA ("Secretariado para a Modernização Administrativa"), a special horizontal body reporting directly to the Prime Minister’s Cabinet. Recent developments include making Portal do Cidadão available in normal cash withdrawal machines (ATMs) as from mid-2000. InfoCid also includes an extensive website providing information to entrepreneurs (SIAE) on how to create a company. The InfoCid website won the JetNet 2000 prize in March 2000.

At regional level, the main initiative can be found at the CEC – Conselho Empresarial do Centro web page (http://www.cec.org.pt), as the Centro enterprises knowledge net. This net started from a basis of 6 Districts, 8 Cities of Average Dimension, 2,4 Million inhabitants, Weak intra-regional cohesion, Influence and attractiveness from of Lisbon and Porto, and insufficient proximity and information. But also with a Net of 37 Enterprise Associations, more than 400 specialized technician, representation and support the 45,000 companies (> 95% MPE) and 1/3 of the PME Excellency Prize of Portugal firms. The project started with a creation of a net of Cabinets to support SMEs competitiveness, based on a technological infrastructure of knowledge, communication and information: CEC’s NetCentro intranet/extranet, and as evolved to a the main information website for Centro Region SME’s. This organization also promotes the Observatório da Competitividade da RC (Centro Region’s Competitiveness Observatory). This project has created a monitoring system that allows evaluation, in a consistent form, of Centro Region’s competitiveness state, with particular prominence for the competitive capacity of its firms and business sector. Centro Region’s Competitiveness Observatory is available in http://www.observatoriodocentro.net

A initiative of NERCAB is also of major importance (:http://www.portugalcentro.pt/)- Portugal Centro works as main directory for the firms in Centro Region and general information about the Region itself.

* Describe if the regional/local authorities facilitate:

73

- dialog between businesses and between various business organisations - contact with other actors ( universities, research centres, etc) - participation in regional innovation systems - contact with external supporters

Table 73b. Facilitating access to knowledge and business/market information

Centro Region has experienced in the last few years important steps in order to facilitate dialog between businesses and between various business organisations, universities, research centres, etc.

One of the mains steps was the program PRAIcentro, an innovative action form ERDF, which aims at the development of an innovation culture in the region (table 55a). It is expected another sequel to this programme. But the participation in regional innovation systems can be truly highlighted by a new initiative being set up now, the Comunidades Criativas e Inovadoras (Creative and Innovative communities), in the framework of the new operational programs for Centro Region (2007-20013). This initiative aims to articulate University and R&D organizations and the regional community, for projects directed to the challenges of a knowledge society, and which must bring the region a better economic performance and life quality, in a coherent regional strategy that attends to local specificities. These communities must involve Universities and Polytechniques, local municipalities, R&D organizations, business associations and national innovations agents from ADI (as observers), in a cooperation work to transform the region in a place rich in new ideas and talent, that attracts educated people, knowledge workers; as is able to to learn and adapt; this is abased on the assumption that only bold partnerships among business, government, and the non-profit sector can bring about this change. The most significant innovation will be to develop a voice based mechanisms through which the business community, public sector and R&D community can learn to cooperate, to explore joint solutions to common problems.

* Rank support in improving the access of SMEs to knowledge and information due to actors

involved in the process and listed below: Table 74. Actors’ involvement and their roles

Ranks

Role of universities, public research centres in:

stimulating SMEs propensity to innovations 4

facilitating SMEs access to research & development centres 4

facilitating SMEs links to big companies 2

facilitating entry to key clusters 3

providing knowledge stimulating entrepreneurial competency 3

providing technological knowledge and stimulating technological competence

3

providing organisational knowledge 2

Role of private research centres and private consultants (private consultancy firms) in:



74





4


providing managerial and entrepreneurial competence 3

Role of public and semi-public organisations (state owned agencies and intermediary organisations, regional agencies, business promotion agencies) in:







4


Role of business association and lobbying oriented organisations (chambers of commerce, industry associations, trade unions, etc) in:







4


Rank the roles of the bodies in terms of specific activities.

Ranks: 1 – very low; 2 – low; 3 – average; 4 – high; 5 – very high III.1.3. Improving innovation support * Outline and describe shortly to what extent one can observe activities favourable for SMEs Table 75. Innovation support

Ranks

75

public involvement in private innovation projects within SMEs 3

Description Promoting funded programmes for R&D consortia, facilitating access to knowledge

call for tenders as innovation support 3

Description

regional/local stimulation of pro-innovative behaviours/activities in firms ( co-financing of development projects, employments contracts etc)

3


brokers of competence and service in supporting networking and clustering for improved transfer and diffusion of innovations

2

Description There are project which intend to stimulate this, but no critical mass results happened

“channels” for transfer and diffusion of innovations 3


intermediate units for transfer and commercial implementation of research and scientific efforts

3

Description Universities and tech transfers associations the mains promoters of this

public involvement in private innovation projects within SMEs 3


Describe and rank the activities favourable for SMEs.

Ranks: 1 – very low; 2 – low; 3 – average; 4 – high; 5 – very high III.1.4. Improving access to labour market * Outline and describe shortly to what extent one can observe changes due to various actors

involvement regarding following support: Table 76. Access to labour market

Ranks

activities supporting recruitment of unemployed in the region 4

Description Mainly national programs for SME to qualifies this people “on-the-job” and special training for qualification.

instruments on labour market - promoting employment in SME 4

Description Mainly national programs for SME to contract qualified people (PhDs, Ma’s, Ba’s, Etc)

public co-funding for first employment 4

Description Mainly national programs for SME to contract graduated students

policy interventions (public co-financing of additional employees) responsible for innovation generation

4

Description Mainly national programs for SME to contract qualified people (PhDs, Ma’s, Ba’s, Etc)

76


Ranks: 1 – very low; 2 – low; 3 – average; 4 – high; 5 – very high III.1.5 Improving access to good institutional and organisational standards for making business * Describe, to what extent and how, the opportunities are derived from various policies, programs,

strategies, (analysed and described in chapter 3), are examined and exploited in daily practises in favour for SMEs. Focus is on governance standards, organisational competence standards and administrative standards in terms of favourable consequences for SMEs.

Follow the issues listed out below and make your evaluation of regional and local authorities and other public agencies since their involvement in this kind of support

Table 77. Institutional and organisational standards for business

Ranks

implementation of legal and administrative regulations facilitating development of business environment

N

Description Slow pace of legislation to incorporate truly innovative firms

location facilitating procedures as example of regional/local policies - cluster oriented policies, innovation–promoting policies

I

Description Tough as some cluster projects are being promoted, a truly regional cluster policy hasn’t yet arisen.

local authorities as “attractors” of new key actors - foreign investments/ big company investments

I

Description The main projects and activities are promoted by national agencies

municipal legal and administrative support for firms - ways of improvement

I

Description As this depended form municipality to municipality

public authorities as creators of incentives and stimuli to business location

P

Description Most of Centro municipalities are promoting industrial parks attractive to firms

promotion and place marketing – is it SMEs friendly I

Description As this depended form municipality to municipality

key clusters - any special treatment? - specific policy instruments? N


implementation of policy instruments and activities for clustering (attributes for SMEs) expansion

I


capacity for SMEs - chances and limits, challenges P

Description Most of the regional actions to stimulate business focus on SME’s

implementation of policy instruments and activities -for supporting innovation milieu and knowledge intensive production – reported aims and results

P

77

Description The PRAI Centro innovative actions was very important in this field

recruiting champions of change (public support in public and public-private projects)

I

Description No visible impact has arise form this.

vigorous forms of marketing/promotion of the region as facilitating entrepreneurship and business prosperity

I

Description Tough as some concerted actions were promoted to place Centro as a innovative region and a place to invest

practical implementation of policy instruments facilitating clustering: support for public activities in spatial concentration of skills, competence, excellence, knowledge-based economy – reported consequences of policy instruments and activities

I


Ranks: P – positive; I – indifferent; N - negative III.1.6 Demand strengthening activities (market extension and diversification - new market opportunities for SMEs) Regional/local authorities as creator of demand and facilitator of market extension for SME products and services * Describe shortly and evaluate the initiatives undertaken in your region, according to following

issues: Table 78. Demand strengthening activities

Ranks

local authorities as creator of local investments engaging local business

P

Description Most of Centro municipalities are promoting industrial parks and business facilities to attract to firms

local authorities as a creator of market/demand for high quality and advanced products and services

I

Description Not determinant for SMEs

local authorities in development of local markets – impact through improved demand for sustainable, environmentally correct products and services

I


local authorities as organiser of local supply for municipal activities P

Description Some impact on SMEs

facilitating market entry for start-ups, spin offs, outsourcing, system for improved contract based economy

I



Ranks: P – positive; I – indifferent; N - negative Regional/local authorities as facilitator of market extension and diversification for welfare services and other municipal services

78

* Describe briefly the role and significance of activities undertaken by public bodies. Table 79. Market extension and diversification

Ranks

competition procedures as a new tool in local policy making (generating standard improvements)

I


welfare services and municipal services- competitive tendering, setting up new markets for the services

I



Ranks: P – positive; I – indifferent; N - negative III.1.7 Improving business environment - the major role of regional and local authorities * Outline and describe how and to what extent the regional and local authorities but even other

public and semi-public actors are involved in following initiatives; Table 80. Business environment

Ranks

facilitating university spin–offs P

Description Business incubators are being promoted by public universities, tech transfer associations and municipalities

offering attractive office spaces P

Description Business incubators and techno poles are being promoted by public universities, tech transfer associations and municipalities

support for foundation of start ups P

Description Business incubators are being promoted by public universities, tech transfer associations and municipalities

marketing and promotion in virtual space P

Description Some efforts are being made in this goal (see table 73b)

new social-cultural projects reinforcing local attractiveness and stimulating local business

I

Description Some efforts with critical mass results to be shown

facilitation of business network with support in training, marketing, infrastructure, spin-off foundation

P


79

integration of regional business promotion I


e-governance as portals and interactive dialog for SME support I


new communication system for strengthening the business location I



Ranks: P – positive; I – indifferent; N - negative III.1.8 Improving access to technical infrastructure and communication standards Improved access to extended communication ad transport facilities and systems * Describe shortly activities in following issues of support, with focus on how regional/local

authorities are building up support system for business environments for SME Table 81. Access to technical infrastructure and communication standards

Ranks

support for clustering in terms of technical infrastructure and communication standards

P


accessibility to services of general economic interest G

Description Mostly made by industrial associations and technological centres

provision of a dynamic and innovative e-business environment G

Description Made specially by national programs

stimulation of ICT investments G


e-business support network G


secure and effective e-payment systems as standards in administrative routines

G


improvement of access to flexible workspace G


80

access to appropriate business facilities (meeting rooms, hardware, software, broadband, shared equipment, servers, computers)

E

Description Trough Business incubators and techno poles strategies

access to web-based content and services G



Ranks: E – excellent; G – good; P - poor III.1.9 Improving organisational/administrative support * Describe briefly and evaluate assistance the SMEs can afford thanks to the practises functioning

in the region: Table 82. Organisational/administrative support

Ranks

on location choice G

Description Mostly made by industrial associations and municipality cabinets

plant construction G

Description Mostly made by industrial associations and municipality cabinets

labour recruitment G

Description Mostly made by industrial associations and IEFP

legal assistance G

Description Mostly made by industrial associations

accounting consultancy E

Description Mostly made by industrial associations in seeking support and private firms in providing it

administrative pools G

Description Mostly made by industrial associations in seeking support and private firms in providing it

support in clustering- building up institutions and support the cluster management and administration

P


web-based support G

Description Mostly made by industrial associations in seeking support and private firms or R&D institutes in providing it

training with public co-funding E

Description Mostly made by industrial associations and private firms

81


Ranks: E – excellent; G – good; P - poor III.1.10 Educational support/supporting relevant qualification standards Regional and local education, training system * Make a brief scrutiny over results of specialised public and public-private educational and training

initiatives profiled to support SME * Describe the range, profile, reported results - what is defined as a success of the activities and

how it is measured.

* Are there any benchmarking procedures already used in the region?

* Educational and training endeavours in innovation based and knowledge based SME - reported results

* Educational and training endeavours in routine based manufacturing and services - reported

results.

82

Table 83. Regional and local education, training system There is a consensus that the low educational level of the population is the main weaknesses of Portugal. Successive documents have mentioned the need to improve the situation, strongly increasing the number of people with at least secondary education. Several measures have indeed been taken, but the outcome was very meagre. Among the measures more directly associated with innovation issues, a mention is due to the medium term financing of R&D units (PT 5), the S&T training under PRAXIS XXI (PT 8), the Internet initiative (PT 17), the certificate of basic competencies on information technologies (PT 19) (both under POSI), and the POE/PRIME measure for supporting the dynamisation of technology, training and quality systems (PT 20). This was recently replaced by a new regulation on scientific, quality and technological infrastructures (PT 42). A draft Law on Vocational Training was also prepared by the Ministry of Education team, but it was at an early stage of maturation. A new feature of the Basic Law on Education is the opportunity it provides for the launching of Technology Specialisation Courses. According to the Ministry of Educations, these are aimed at providing students that complete in secondary education and do not want to go straight for University with further training possibilities, while contributing to strengthen the links between education and the labour market. After a pilot experience at Aveiro University, 19 new courses – in different areas – were planned to be launched in futures academics year. These courses grant a technology specialisation diploma, providing access to a Professional Skills Certificate of level IV, and may enable the continuation of studies at university level. Three important measures were taken with regard to education and initial and further training: the Doctoral Grants in Companies (PT 43), the regulation on the support of human resources skills under PRIME (PT 44), and the revision of the regime of Scientific Patronage (PT 45). As far as a trainee program for young professionals, the new initiative Inov-Jovem- INOV-JOVEM – Jovens Quadros para a Inovação nas PME (Young Managers for the Innovation in SMEs) is a program that supports the insertion in SMEs, of young professionals with age until the 35 years, with qualifications of superior level in critical areas for the innovation and the enterprise development. two types of supports: The promotion of professional periods of in-firm training, complemented or not with room training where the salaries of the training period is co participated by the firma and by public funds; The specific support to the work individual contract of this trainees. It is aimed at SMEs pledged in innovation processes and enterprise development, in particular those that they aim at gaining and strengthen competitive positions in their markets. As far as training initiatives wit direct intervention in SME, there are mainly 5 national for SME training programs with regional emphasis: Formação PME, from AEP – Associação Empresarial de Portugal InPME - from AIP – Associação Industrial Portuguesa Rede, from IEFP – Instituto de Emprego e formação Profissional: Gerir, from IAPMEI Consolidar II, from CEC and IAPMEI The SME training programme was approved in June 1996. The programme was first implemented as a pilot programme up to May 1998. This pilot has been evaluated by an independent external institution. The target group of the SME training programme consists of entrepreneurs and workers of SMEs, in all sectors of economic activity. What makes the programme different from others is that it is exclusively targeted at SMEs. The general objective of the SME training programme can be described as follows: To promote competitiveness of SMEs by upgrading managerial skills of entrepreneurs, training their executives and workers and consequently improving SME management and organisation. Alongside this general objective, the two main goals pursued are: 1. to upgrade human resources by incorporating training and consultancy inside SMEs; 2. to set up a system providing support and services for SMEs, based on a public-private partnership and supported by a territorially based network of institutions. The second goal stresses the need to set up a training infrastructure specifically targeted at SMEs. This is necessary because the available training is less adjusted to the specific needs of these enterprises regarding objectives, content and method. By introducing a network of territorial and sectoral bodies the new approach can be more easily promoted and transferred to SMEs in general, and not only to those SMEs involved in the programme. To upgrade human resources in SMEs several approaches have been introduced. The actual approach adopted depends on the organisation involved in the implementation of the programme. The aim of stimulating public-private partnership resulted in the selection of three different organisations for the implementation of the programme. The following three organisations were selected through a public tendering process: IEFP (Institute for Employment and Vocational Training); AIP (Portuguese Industrial Association); AEP – Associação Empresarial de Portugal (Portuguese Firm’s Association). IEFP is a public body, answering to the Ministry of Labour and Solidarity. AIP and AEP are the two largest associations of employers in Portugal. These three organisations have been selected in view of their specific competence and experience in the field of training in general and in SME development. Each of these three organisations has developed the contents of the training programme according to their own view and corresponding to their own competences. The Ministry of Labour and Solidarity has set broad overall guidelines for the programme to be taken into account by the three organisations selected for implementation. As a result, three sub- programmes have been developed: REDE coordinated by IEFP: Eligible for the programmes are small enterprises with fewer than 50 workers, an annual turnover of less than

83

11,971,150 Euro and not holding, or being held by, more than 50% of another company unless both taken together do not exceed the limit on the number of workers and the annual turnover ceiling. InPME: : coordinated by AIP; PME Training coordinated by AEP. These sub-programmes are seen as three distinct and independent entities within the overall framework. The management of each sub-programme is fully independent. Each sub-programme however has a strong and centralised coordination. The contents of the three sub-programmes are to a large extent comparable, but each sub-programme also has its own characteristics. As already indicated, the distinctive features arise from the fact that different institutions manage the sub-programmes. They influence the content of the programmes through their background, characteristics, skills and networks. This can be seen from the diverse measures adopted by each institution in its approach to SMEs. In general, the SME training programme offers the following services: training; advice; problem-solving counselling. These services are aimed not only at entrepreneurs but also at SME executives and workers. Within all three sub-programmes on-the-job consultancy is provided specifically for the entrepreneur. The consultant-trainer is a core-element in the programme. Together with the consultant, the entrepreneur develops a strategic plan and decides on the actions to be taken to realise this plan. Then training and consultancy needs are determined. Once these needs are determined, the consultant brings the entrepreneur in contact with specialised consultants in different fields such as accounting and legal affairs and possible training courses are selected. Clearly, one essential requirement to be eligible for the programme is the long-term commitment of the entrepreneur, as the average on-the-job consultancy takes about 13 months. In addition to on-the-job consultancy, in two of the three sub-programmes (REDE and InPME) a young graduate is introduced to the SME as an employee (corporate development assistant) or as a junior consultant to give a qualification impulse to the SME. But this also offers job or temporary work-experience opportunities for unemployed young graduates. As such, this approach also reduces unemployment among young graduates, which is considerable. Gerir, from IAPMEI, followed these last initiatives. Promoted by IAPMEI with the support of POEFDS, this initiative intent to contribute for capacity of management and the competitiveness of SMEs, through training and consultancy actions in firms The program develops with the participation of a set of entities (training bodies) that are responsible for the execution of the actions, in accordance with a methodology defined for the IAPMEI. These training entities can be organizations of associative nature, nominated enterprise associations, companies and other structures with abilities in the domain of training. The methodology of this program seats in a formation-action concept, integrating moments of diagnosis, training in room and direct action in the companies, and motivating the development of plans of enterprise for organizational change and innovation, frame-worked by the resolution of detected real problems.¶ As evaluation results: in general, it was concluded by the evaluators that SME entrepreneurs have improved their management skills regarding problem identification, the definition of goals and the implementation of action plans. The positive outcomes of the programme as mentioned above are considered to be the result of the methodological approach of the programme, which consists of direct intervention in SMEs through on-the-job consultancy. The consultant-trainers are thus of vital importance to the programme. The reach among SMEs indicates that the approach is well targeted at SMEs. General merits of the programme: the skills of SME employees have developed, especially the entrepreneurs’ management skills in very small enterprises. The intervention model for very small enterprises has proven to be effective (diagnosis, action, plan, training, in-company action). The in-company support has proven to be effective for organisational problems in very small enterprises. The young graduates have strengthened the company structure. The ability of the territory- and sector-based associates to intervene in SMEs has been strengthened. Dissemination of the results of the programme has been put in place (best practices, information and reflection). A network of participating entrepreneurs, consultants, trainers, partners and institutions has developed. The Projecto Consolidar II : Consolidar II has for objectives to work on competitiveness’ factors non directly connected to production, i.e. a focus on organizational factors. ¶The implementation of Consolidar II results of a partnership with the CEC and the IAPMEI, while public partner, being the CEC the project’s leader entity.¶It had its origin in a previous program – Consolidar. Consolidar II it was thought as a form to consolidate and to support investments carried through other Systems of Incentives the Micron and small Companies (MPE’s), more focused on the productive factors. The intervention in the companies, relies in two axes:¶ - ¶AssistMPE, to be developed for one technician of the local business association, where it will be made a Strategic Diagnosis, strategic reflection, definition and accompaniment of an Action Plan - FormMPE, to be develop for a external consultant of the local business association, that will accompany the entrepreneur in the phases of elaboration of the Strategic Diagnosis and Action Plan (developed in the AssistMPE source).¶ Objectives To allow a deeper knowledge of MPE’s, putting them and the associations that support then, in a collaborative network, To contribute for the awareness and adequateness of methodologies and coherent forms of intervention next to MPE;¶ To increase the regional competitiveness;¶ To increase the taxes of survival of the MPE;¶ To increase the level of qualification of human resources of the regions, namely to the level of the managers of MPE and the business consulters of the local associations;¶ To fight fragilities of management in the micron and small companies; To develop in the entrepreneur (manager) the capacity to develop strategic diagnostic tools, developing market pro-active skills, rather

84

than a conservative reactive posture, typical of these firms. To stimulate in MPE new s forms of enterprise competitiveness, namely to the higher quality levels, environment concerns, hygiene and security procedures and new technologies awareness; To stimulate the formative reflection as well as the accomplishment of training surveys in companies where, for its dimensions and capacities of management, normally, the type of offers and qualification does not arrive; To implement a correct applicability and durability of European funds; Local business associations that implant the project: ¶ ACG – Associação Comercial da Guarda ACIC – Associação Comercial e Industrial de Coimbra AECBP – Associação Empresarial Covilhã, Belmonte e Penamacor AICP – Associação de Industriais do Concelho de Pombal AIDA – Associação Industrial de Aveiro (Concelhos da NUT II Centro) AIRV – Associação Empresarial da Região de Viseu NERCAB – Associação Empresarial de Castelo Branco NERGA – Associação Empresarial da Guarda

85

III.1.11 Supporting networks and clusters * Describe and rank the following characteristics: Table 84. Networks and clusters

Ranks

provision of networking for local entrepreneurs P

Description Mostly made by industrial associations /chambers of commerce and incubators associations

setting up PPP enabling conditions for innovative capacity building in local business (networks, clusters)

P

Description Mostly made by industrial associations /chambers of commerce and incubators associations

creating favourable spatial arrangements P

Description Business incubators, techno poles and industrial parks are being promoted by public universities, tech transfer associations and municipalities

offering office space and infrastructural support P


special technical and organisational arrangements for clusters P

Description Business incubators and techno poles are being promoted by public universities, tech transfer associations and municipalities, tough this is not integrate in a coherent cluster strategy

communication support for clusters I


facilitating innovation transfer and adaptation P


facilitating relations with R&D centres and universities P

Description Promoting funded programmes for R&D consortia, facilitating access to knowledge and networking

facilitating relations with other business actors P

Description Promoting funded programmes for R&D consortia, facilitating access to knowledge and networking


Ranks: P – positive; I – indifferent; N - negative III.1.12 Encouraging networking and clustering * Describe and rank the following characteristics:

86

Table 85. Encouraging networking and clustering

Ranks

favourable decisions in spatial planning G


special spatial arrangements G


information support G


special promotion services P

Description No direct actions existents

special cost reducing regulations P


special cost reducing arrangements P


administrative services – pools P


equipment, communication facilities - capital support form public side G

Description Made trough national programs


Ranks: E – excellent; G – good; P - poor III.2 INDIRECT SUPPORT III.2.1 Learning capacity of regional/local authorities. Consequences of plans, programs strategies Indirect support means that one is aware of the complexity of impact. There are many aspects of regional programs and activities which can affect the SMEs but it is difficult to measure and describe the adequate impact on choices and activities undertaken in SME sector. * Follow the main documents expressing the political choices and strategic preferences and provide suggestions on following issues:

87

Table 86. Learning capacity of regional/local authorities

Ranks

general usefulness of regional and local governance in terms of vision-oriented and strategic plans, programs, agreements

P

Description Promoters of import intelligence documents

trends for new market opportunities and new business development opportunities

P

Description Promoters of innovative actions anticipating trends

new localisations and investments - the patterns of change P


direct investments in region - external/foreign - influx of capital, innovations, technologies, contacts, relations – new access to external knowledge and markets

P

Description Promoter of networks and efforts actions

analysis and prospects for SMEs P


the use of “attractiveness” and “image” as policy instruments; investments preserving and developing life quality standards as factors attracting business location and attracting qualified workers, financially strong households

I


the use of symbols for uniqueness and strengthens of the region. Status lifting arrangements (investments, projects, events) with consequences for SMEs

I



Ranks: P – positive; I – indifferent; N - negative III. 2.2 Managing quality standards due to the strive for regional/local attractiveness * Make suggestions in what way the quality standards are managed by authorities influencing

choices made by SMEs. (the following standards are of main interest)

Table 87. Standards for regional/local attractiveness

Ranks

education standards in municipalities (ground and secondary schools) I

Description No visible effects

safety standards P

Description Legislations rules are being enforced

88

living standards- districts with higher status, prestige I


communication and integration standards within the local society I


environmental standards and leisure standards P

Description Legislations rules are being enforced

political standards in creation of stability, participation, trust, transparency

I


inclusion- youth, gender, immigrants, disabled P

Description Special programs carried on by local organizations

civil society activities for good life conditions P

Description Special programs and civil actions carried on by local organizations

other (name) …………………………………………………………………. P I N

Description


Ranks: P – positive; I – indifferent; N - negative III.2.3 Projects and arenas of networking/partnerships in support of SMEs Local governance as support for SME, networking and partnerships * Provide information and suggestions regarding local governance and its impact on SMEs Table 88. Local governance and impact on SMEs (1)

89

The local productive systems of competitive regions must be are organized around two axes:¶

Internal cohesion: the capacity of the system actors to conceive a common strategy of development;¶

Openness to the exterior: the capacity of the region to establish external contacts and to accede global economic dynamics.¶

In the base of this two axes are the concept of institutional density, this characteristic that, based on proximity relations, assures the cohesion of the local productive systems, and in this way, works as the starting point for regions to construct its development processes. But for the SME’s “jump” to a global competitive world, there’s the need follow territorial competitiveness based on four key concepts: innovation; learning; networks; governance.

Innovation today is arguably seen as a growth engine; but we must here focus on innovation in its broad assessment, i.e., technical, organizational and institutional innovation. But as innovation is a costly and difficult process, there’s the necessity of coexistence between two distinct but complementary systems: one internal to SME’s, where innovation is produced/incorporated, and another external resultant of the transnational innovative networks of production, science and technology. That highlights the importance of the learning processes in the innovation processes.¶

The importance of the learning processes is patented in the creation of the "abilities" necessaries to local productive systems (technology, know-how, human resources and management) face globalization and the learning economy challenges. Networks are the structure of local productive systems, and its importance becomes increased with the emergency of a learning economy, where knowledge and the ability to continuous learning are the keys, in a global economy, SMEs depends crucially on its network to scale up its value chain and become truly competitive.

In an apparent paradox, globalization has enhanced the importance of local systems and geographic proximity in a region’s development process. But to make the last three key concept works, it needs to be implemented a long term coherent governance strategy that can sum up all the actors mentioned before and its regional agendas.

* Make brief description (based on benchmark cases/practises) of consequences for SMEs in terms

of: - local governance: cross-sectoral partnerships and alliances for collective pursuit and

exploitation of opportunities in favour of SMEs (or local business) - networking and public-private partnerships for strengthening local competitive advantages

- with what consequences for the SMEs - active promotion - opinion leadership (core politics and core politicians) and the advantages/obstacles for

SMEs

Table 89. Local governance and impact on SMEs (2)

90

Probably the main initiatives involving networking and public-private partnerships for strengthening local competitive advantages that are chancing high-tech SME’s Centro region support are the ones that have result in the launching and supporting of the region tech-based incubators and industrial parks / techno poles (see table 19).

Most of these initiatives have been funded by PRIME – Programme of Incentives for Modernising the Economy, in measures coordinated by the Direcção Regional do Centro do Ministério da Economia - DRE-CENTRO (The Regional Ministry of Economy Centro Agency), and implemented by a vast array of actors, which includes universities, local municipalities, industrial associations and business sector.

This model has been somehow described in a paper* made in the context of the RENCOM project (“Facilitating regional learning processes in a competitive environment: regional socio-economic and cultural developments in three accession countries and three member states.”), which describe previous initiatives in line and to some extent, a basis for the previous initiatives mentioned above. In this study, it is analysed the Marinha Grande cluster initiative and the Instituto Pedro Nunes creation in Coimbra. In one of the cases (Coimbra), it refers to an institutional agent – the Coimbra University-, and in another case (Marinha Grande) a group of agents (business and public sector) gathered by a goal. The objectives in (Marinha Grande) were to “cement” a strategy of development, that would create employment, for a given administrative context (the Northern part of the District of Leiria), conjugating the public powers (central and local) and private; in the other case (Coimbra) the aims was to have a “interface” structure between the community and the University (in association), setting out this capacity to “produce” knowledge, in order to solve practical problems of the entrepreneurial world and creating a possibility to “incubate” tech based companies.

The initiatives that have supported the creation of table19 institutions and its projects, will not only provide the Centro Region with the adequate infra-structures for supporting high-tech/high-growth firms, but will constitute a major platform for public-private partnerships and networking for strengthening local competitive advantages, in a sense that approaches academia, business sector, local municipalities and central government. This has been an integrated approached to a territorial development strategy that can endogen knowledge and boost this region competitiveness’, especially if there is the ability to sum up all the actors mentioned before and its agendas.

Some of the initiatives mentioned in table 83 can also be describe as a good practice of local governance, networking and public-private partnerships for strengthening local competitive advantages.

Theses SME training programes are Formação PME, from AEP – Associação Empresarial de Portugal, InPME - from AIP – Associação Industrial Portuguesa, Rede, from IEFP – Instituto de Emprego e formação Profissional, Gerir, from IAPMEI and Consolidar II, from CEC and IAPMEI. They involve public bodies IEFP (Institute for Employment and Vocational Training) and IAPMEI, major national players as AIP (Portuguese Industrial Association); and AEP – Associação Empresarial de Portugal (Portuguese Firm’s Association), which are the two largest associations of employers in Portugal. This intervention model (diagnosis, action, plan, training, in-company action) for very small enterprises has proven to be effective special because of the in-company support, the participation of local associations with a profound knowledge of local firms and theirs specifications, and perhaps most important, which local firms recognise as trustable partners This interventions has trained both local associations and firms, consolidating a network of participating entrepreneurs, consultants, trainers, and partners.

* Ruivo, Fernando; Campos, Bernardo e Valadas, Carla (2004), “Learning regions” – what do we refer to? Two examples; RENCOM - Workpackage 4 – Portuguese case studies

91

Notes / remarks

--- Please use the table to explain any potential distortions or limitations applying to your benchmark ---

The main problem faced in this report had to do with the legal and political administrative division of the country: Portugal is not a regionalised country, so most of local policies are implemented by strategies, policies and programs that work on a national basis implementation.

Other limitation was in the availability of data and statistics at regional level; for some cases, data is not available and studies have not been made on the subject.

In the point II.1.2. Specific programs and policies SME-oriented: women, disabled, exclusion, the required data is not public available, and though the data has been formally requested to the responsible organisms, it has not been delivered to the date of conclusion of this report.

Last, some areas of knowledge were found to be very subjective or hard to measure, as they are based on subjective criteria.

92

Concluding remarks

This Report has intent to make an extensive and complete as possible view of Centro region support system to SMEs. And a critical number, well know from this actors, arises from this reality: 99,7% of the firms in Centro region are SMEs.

The complexity of the policies, strategies and actors involved highlights the vast efforts of the actors involved and the willingness to boost SMEs performance. But it also highlights the difficulties and problems that this system faces in Centro Region.

Our conclusion is that this critical mass of actors and SMEs needs to be traduced in more institutional density, which can guarantee more internal cohesion and openness to the exterior: This how the SME’s “jump” into a global competitive world is already being made by some Centro Region SME’s, and in our view, the strategy and the path to be followed by the rest.

And that can only can be made trough innovation; learning capabilities; networks and local governance, in a long term coherent governance strategy that can sum up all the actors mentioned before and its regional agendas.

This report makes a region description which points that this path has already started. But it also points that we still have a long way to go.

->

93

INTERREG IIIC East operation “Interregional Entrepreneurial Teams” 3E0010I

E-teams aims at creating European platform with sustainable regional and

interregional organisational structures for SMEs support with a specific focus

on internationalisation.

Duration:

- September 2004 – August 2007

Lead Partner:

- The Karol Adamiecki University of Economics in Katowice, Slaskie, Poland

Project Partners:

- Bautzen Innovation Center, Sachsen, Germany

- Coventry University Enterprises Ltd., West Midlands, UK

- Incubator of New Enterprises of Chania, Kriti, Greece

- Institute Pedro Nunes, Centro, Portugal

- Klaipeda Regional Development Agency, Lithuania

- Södertörns högskola University College, Stockholm, Sweden

- Terrassa City Council, Catalunya, Spain

- University of Girona Technological Trampoline, Catalunya, Spain

- University of Oulu, Pohjois-Suomi, Finland

The material reflects the author's views. Managing Authority of the Community Initiative Programme INTERREG IIIC East Zone is not liable for any use that may be made of the information contained.