Realities and Perspectives of Industrial R&D: A Study of the Portuguese Reality in the European and Global Contexts

Most developed countries exhibit high rates of R&D performed in industry, but the situation is considerable different in medium income countries such as Portugal. Despite the lower levels of R&D, Portuguese firms have increased their competitiveness, and the country has been able to show remarkable levels of economic performance. This paper provides a framework to analyze the way in which R&D is performed in Portuguese firms, and how it contributes to their competitiveness and the overall performance of the Portuguese economy. The analysis will constantly take as a reference the situation that exists in more developed countries. We find that Portuguese firms are very likely to engage in search and exploration activities that are conducive to innovation. Most of these activities are informal, and are not either perceived, or reported, by firms as formal R&D. We interpret this feature within the conceptual framework of the emerging understanding of economic development which is based on learning dynamics. We conclude that the innovative performance of Portuguese firms should be measured and accounted for using innovation surveys and detailed case studies of sectors and representative firms.