Why Portugal? Why Lisbon? – Interview with João Vasconcelos, Secretary of State of Industry

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We had the privilege to talk to João Vasconcelos, Portugal's Secretary of State of Industry and former Executive Director at Startup Lisboa, about the thriving tech scene and reasons for fintechs to come to Lisbon. Besides the beautiful landscape and great people, of course.

Why Portugal? Why Lisbon?

We've spent almost two months in Lisbon ourselves now. The scene is vivid and the city has a lot to offer. Time to find out if it's really a good idea to do or move business here.

Joao Vasconcelos and FinTech Weekly
Our host and friend Rodrigo, Mr. Vasconcelos and Jan from FinTech Weekly

Hello João, thanks for having us. Please tell us: where are the regulatory problems and chances for fintechs and banks in Portugal?

The way we deal with regulation is not very different from the rest of the continent. I do think that we must move faster than we are actually doing at the moment. But the biggest difference here is the mindset and the priorities of the government which is very open to new businesses. The biggest challenges to fintech regulation in Portugal today originate from a European level rather than a national level.

Our banks are very open to innovation. Many things are easier to establish here, because we are a rather small market with very few competing systems underlying. The same applies for insurance. We have an open mind and we have more and more successful startups who work with a lot of banks worldwide.

The government has many curricula on technology for the finance sectors, obviously because we know they generate jobs and innovation, which we are very open to, of course. We have a sandbox regulation, not the same as in the UK as we have more strings attached, but in continental Europe we see ourselves as one of the most progressive countries in this regard.

Why Portugal? What’s the message you want to send out to startups with innovative and disruptive business cases?

I won’t need to explain the quality of life, the low costs, the way the Portuguese welcome people who want to live here. This has been our nature for the last 400 years. We went out into the world as an empire and now the world comes to us – and we love to welcome them. For example, our prime minister is of Indian origin, which is not uncommon of course but still rather rare in Europe. It does depict our multicultural mindset and way of life, which is very powerful in terms of digital and creative economy. We cannot offer a huge market or oil and gas, but what we have is a unique team of diverse people which took us 500 years to build. Especially Lisbon consists of people from various religions and cultures which enables us to understand our partners from all areas of the world.

On top of that, we are a European capital with low cost flights to other capitals, which is important for startups. And we are at the seaside, which is very useful, too (laughs). What happens here at the moment reminds me a little bit of what happened in the 90s to Barcelona. During the first wave, tourism flourished, the second wave brought Erasmus students here who were followed by people who came to start their business and live here. It’s the environment where a startup wants to be, and they can find it not only in one neighbourhood, but in the entire city of Lisbon.

And another very helpful thing is that we have 400 million euros to coinvest with VCs and business angels, providing high chances of investment in your startup with few strings attached.

How is Portugal a good entry to foreign markets?

If you want to tackle e.g. the Brazilian market, I can assure you it’s better to do it from Portugal instead of going there directly. And the same applies vice versa. All the Brazilian companies trying to tackle the European market come to Portugal first and from here, they go to the European markets.

Joao Vasconcelos in his office
Joao Vasconcelos in his office – you can see he's a supporter of startups

Do you think that startups can operate solely from and in Lisbon and grow competitively to startups in Berlin or London?

For London, it’s obvious. We’re in the same time zone and our inhabitant’s quality of English is good. Also, we have more than 20 flights per day to the entire UK. So you can work in real time with your customers in London and your back office. Many big corporations already discovered Portugal. BNP Paribas have 4,000 engineers in Portugal, Siemens has 2,500, Cisco and Fujitsu have about 300 and IBM has around 400. And startups begin to see the potential, too and they will have good networks here as well. We finally have a generation of Portuguese entrepreneurs who can participate in this whole movement.

Where do you see the biggest chances in the tech scene regarding growth?

We have a lot of entrepreneurs and are attracting a lot, as I just said. We need to maintain that. The VC and investment industry as well as the private money is a huge upside – but we still don’t have the right amount of people to invest in, yet. So we are attracting more investors with profound knowledge of the industries in industries who know how to invest and who to invest in in these areas. We have the money, but I think the perfect strategy on who to invest in and how to actually attract them is missing in many parts of Europe.

The core banking industry in Portugal is getting back on its feet but banks in many other countries are struggling hard to generate profit. How do you see that disruptive companies will actually work together with the banks?

The banks try very hard to be capitalised and to be profitable. The top priority of a bank right now is not innovation but survival. This is a huge opportunity for startups to act as banks have other urgent problems to solve.

In January we will announce the creation of a group to help us with the sandbox I mentioned earlier. We will invite big corporations, middle-sized companies, startups and regulators. In this, I want two or three banks, I want PayPal, TransferWise, Goldman Sachs, the Bank of Portugal, I want WeChat. I would love to be the first country in Europe accepting payments by WeChat. We are at least discussing that in that task force.

How do you see the tech scene in Portugal in three or four years?

I asked myself the same question a couple of years ago. And many things I was hoping to see about five years from now are already happening. I cannot really answer it. Since WebSummit was announced, the amount of people and startups moving or visiting here is amazing. It definitely had a great impact and the consequences are hard to forecast as of now.

Second Home Lisbon
The creative work space 'Second Home' in Lisbon. We were kindly invited to the opening ceremony by Mr. Vasconcelos

Benfica, Sporting or FC Porto?

The best football is played by Benfica, and the championship will be won by Benfica, but if you are talking about comparison to world-class clubs, it will be Benfica. All three clubs are very respected, but when Benfica wins a championship, there are people on the streets - all around the world. They have tremendous support.

Thanks for the interview, João!