Portugal: How did peripheral economies like Israel and Finland with small sized markets get to be world leaders in the IT sectors?…

1. A technology model for Portugal:
Creation of an IT cluster?
The Case-Studies of Finland and Israel
André Marquet
Organization
March, 2009

2. Out of the spotlight. Looking to the periphery.
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

3. pe·riph·ery
• Pronunciation:
– pə-ˈri-f(ə-)rē
1. the perimeter of a circle or other closed curve ; also : the
perimeter of a polygon
2. the external boundary or surface of a body
3. a: the outward bounds of something as distinguished from its
internal regions or center : confines
4. b: an area lying beyond the strict limits of a thing
periphery. (2008). In Merriam-Webster Online Dictionary.
Retrieved December 10, 2008, from http://www.merriam-webster.com/dictionary/periphery

4. Finland
Staying
competitive in
Euroland
Portugal
Economy!
Israel
“How did peripheric Preventing
economies with small brain-drain
sized markets get to be even with low
world leaders in the IT salaries!
sectors?”

5. quot;Man is by nature a political animal.quot;
It’s not a causality that Aristotles “was made” in Greece.

6. Ibn Khaldun (May 27, 1332– March 19, 1406);
Lived in Spain and North of Africa and did most of his
work in the 14th century, almost 400 years before the
works of Adam Smith and is considered the forerunner
of economics and sociology.
Ibn Khaldun was the first schoolar to do
comparative economic analysis, as he was
particularly interested in the why some regions
developed so much while others remained
under-developed.
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

7. Portugal
Population*: 10,676,910
GDP**: $223.3 billion
GDP per capita: $20914
Defense spending***: 2.3% of GDP ($5.14 billion)
Def. per capita: $481
Public R&D: 0,78% of GDP ($1.7 billion)
R&D per capita: $163
Mobile operators: 3 GSM; 1 CDMA
* - 2008 est.
** - 2007 est
*** - 2005 est.

8. Israel
Population: 7,112,359
GDP: $161.9 billion
GDP per capita: $22763
Defense spending: 7,3% of GDP ($11.8 billion;)
Def. per capita: $1659
Public R&D: 4,46% of GDP ($7.2 billion)
R&D per capita: $1015
Mobile operators: 4 GSM; 1 CDMA; 1 iDEN
* - 2008 est.
** - 2007 est
*** - 2006 est.
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

9. Finland
Population: 5,244,749
GDP: $245 billion
GDP per capita: $46713
Defense spending: 2,0% of GDP ($4.9 billion;)
Def. per capita: $934
Public R&D: 3,46% of GDP ($8.5 billion)
R&D per capita: $1616
Mobile operators: 4 GSM;
* - 2008 est.
** - 2007 est
*** - 2005 est.
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

10. Myth #1:
“The Portuguese Mobile
Market is Small.
”

11. Mobile Telecom Market Sizes
Total Mobile Market Size (1000M euros) Market-to-GDP (Country’s Mobile Effort Rate)
4 2,50%
3,5
2,00%
3
2,5
1,50%
2
1,00%
1,5
1
0,50%
0,5
0
0,00%
Portugal Finland Israel
Portugal Finland Israel
(2007 consolidated values based on mobile carriers)

12. Israel, Negev Desert

13. Finland, not very far from the Helsinki…

14. Myth #2:
“You need big urban centers
to develop IT companies”

15. Myth #3:
“There is lack of qualified jobs”
The truth is that we don’t have enough qualified
professionals!

16. Look to Past Efforts of Silicon Valley Cloning
• Steven Usdin authored
Communism Engineering, where
he tells the story of two american
nationals that founded the soviet
silicon valley in the 1950’s.
• After the collapse of the Soviet
Union, a number of Jewish
Russians left to help grow the
Israeli Silicon Valley.
• In 2007, Rosenberg
Yaël; Vainunska Karen authored the
study quot;Israel New Silicon Valleyquot;

17. Israeli companies
Israeli engineers
Metro Haifa developed the
world’s first cell
• Intel Research
phone at
• Microsoft Research Motorola’s lab in
• IBM Haifa, its largest
research center
• Technion, Haifa Univ.
in the World.
Metro Tel Aviv
• Motorola Research
Pioneered
• Checkpoint
Voicemail, SMS
• Amdocs and other cellular
• Comverse phone services.
• Tel Aviv Univ.

18. Portuguese companies
Metro Porto/Braga
First quantum
• Mobicomp
chip project in the
• Ndrive
world.
• Qimonda (??)
• INESC Porto, FEUP.
Aveiro
• PT Inovação
• Instituto de Telecomunicações, Univ. Aveiro
Coimbra
• Critical Software
Pioneered WAP
• WIT Software
Portals,
• Instituto Pedro Nunes, Univ. Coimbra.
SMS/MMS and
Metro Lisboa
other cellular
• Nokia Siemens Networks
phone services.
• Microsoft Research
• Ydreams
• INESC/INOV, IST, ISEL, Nova.

19. Percent of population ages 25-64 with 12 or more years of education (2004)
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

20. • Israel has also the highest rate of scientists and engineers per population.
Engineers per 10.000 employees (2002)

21. Stock and IP markets
• Israel has the third largest number of companies trading in Wall Street
after the US and Canada.
• Portuguese stock market has only three companies, Novabase, Reditus
and Compta.
• Israel 2nd place in patent applications to Europe Patent Office.
• Israel produces more scientific papers per capita than any other nation
with 109 per 10.000 people.
• Israel has the highest percentage in the world of home computers per
capita.
• Highly advanced in renewable energies like thermic and photovoltaic
solar.

22. • eBuddy, one of the first web based IM platforms was created by a Paulo
Taylor, a Portuguese national.
– Bad news: He based the company in the Netherlands because he
didn’t find financing in Portugal;
– Good news: Paulo wants to come back to live in Portugal. He says
the weather, the food and the people are more enjoyable.
Wit Software is also taking IM to new levels by leveraging the mobile world.
03/03/2009 © 2009WIT-SOFTWARE – witness the difference. All rights reserved. www.wit-software.com

23. Action Items for Technology Agenda
• Portugal 2025. First carbon free economy in the World.
• In Infrastracture for the XXI century, ICT should be top of mind for
governments (NGN are a good example).
• The solution is more technology (not more steel, concrete or “TGVs”),
we need a better connected future.
• There are very high returns for ICT.
• We have to increase, not by 50% but, by an order of magnitude our
investments in Public R&D, to be on pair with top performers like Israel
and Finland.
The production of top level engineers must be a priority.

24. • Portugal needs a strong lobby in Silicon Valley and other IT hubs. (What is
AICEP doing regarding this?)
• Israel has aero-space program (only 9 countries in world have this
capability).
• If Portugal wants to have leading IT sector it has to reborn its IT Defense
and Aero spaceindustry.
– Portugal should look to Brazil for serious technological options.
• We need to stop Lusophobia that is dominant in some national and
international media e.g.“The Economist”.This terminology is simply not
acceptable.
• We need to stop being the P of PIGS (Portugal, Italy, Greece, Spain). And
start being the P of Prosperity.
SAY STOP TO LUSOPHOBIA.

25. Action Plan
Conference Tech@Edges to be held in Portugal in 2009
This conference pretends to debate the technological models to be adopted by
Portugal, and confront those politics with other international practices, such as that
of Finland and Israel and other small sized countries like Portugal. A Technological
Plan (version 2.0) should come out of this conference.

26. Leading Companies (Invitation List)
• Ydreams
• Empordef
• Wit Software;
• Critical Links;
• Nokia Siemens Networks Portugal
• Vodafone Portugal
• Inov Capital
• Conectivity Score Card (coordinated by LEGC)
• Tagus Park

27. Institutes (Invitation List)
• APCOMTEC
• INDEG Business School
• INESC-INOV
• Tel Aviv University
• mbaESG-Paris Graduate School of Management

28. Institutional (Invitation List)
• AICEP
• IAPMEI
• ANACOM
• Camara de Comércio Portugal-Israel
• Camara de Comércio Finlandia-Portugal
• Gabinete do Plano Tecnológico
• Israeli Association of Electronics and Software Industries
• The Federation of Finnish Technology Industries

29. Media Coverage (Invitation List)
• EETimes Europe
• SIC Noticias
• OJE (Jornal Económico)
• Mobile Monday

30. “WIT-Software is part of the silent revolution of the
Portuguese Economy. “
30 © 2009 WIT-SOFTWARE – witness the difference. All rights reserved.

31. Thank you
Contact:
André Marquet
Product Manager
andre.marquet@wit-software.com
Mob/IM +351 910 310 487
31 © 2009 WIT-SOFTWARE – witness the difference. All rights reserved.