Analysis: Easier said than done for Portugal to revive industry

Mon Apr 1, 2013 10:52am EDT
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By Alan Wheatley and Daniel Alvarenga

TORRES VEDRAS, Portugal (Reuters) - For Portugal to succeed in ambitions to reindustrialize its shrinking, debt-laden economy, it will not be down to the revival of mass manufacturing but to the sprouting of high-tech start-ups such as UAVision.

As the name Unmanned Aerial Vehicles suggests, drones mounted with cameras are a mainstay for the small engineering firm. Clients include big farmers who want to monitor conditions in their fields. One drone has been adapted to film camel racing in Dubai.

Nuno Simoes, one of UAVision's partners, is as excited as a schoolboy as a small battery-driven drones lifts off outside his workshops some 55 km (35 miles) north of Lisbon.

He says Portugal needs to play to its strengths in design and engineering rather than making eyes at footloose multinationals.

"Don't think big. We are a small country with small companies," Simoes said. "They think they can turn Portugal into a new European China. They can't. China can produce at a fraction of our cost."

Ground down by deep public spending cuts and shrinking domestic demand under an austerity program imposed by international lenders, the Portuguese economy contracted 3.2 percent in 2012 and is expected to shrink by a further 2.3 percent this year.

It grates with Economy Minister Alvaro Pereira that Portugal has lost too many jobs and industries to the likes of China and eastern Europe.

Manufacturing accounts for about 13.5 percent of national output. That is more than in Britain and the Netherlands, but Pereira would like to get the share back to 20 percent, where it stood in 1989, by 2020.   Continued...

A technician from UAVision finishes one of their flying models at a workshop in Torres Vedras, 55 km (35 miles) north of Lisbon, March 20, 2013. To match Analysis PORTUGAL-ECONOMY/INDUSTRY REUTERS/Jose Manuel Ribeiro