Economics
Opinion Article
December 22, 2020

Implementing a strategy is what makes the difference

The least expected consequence of the pandemic is that the country is finally starting to want to implement along-term strategy. Dutch researcher Geert Hofstede, who analyzed the cultures of 34 countries (including all the most developed countries), characterized Portugal as the fourth country with the least "long-term orientation" and the one with the greatest "aversion to uncertainty". Therefore, it is not surprising that development strategies, visions, and ambitions do not fit easily with the national "ethos". As far as we go, there are brainstorming nights of groups of notables, usually on the eve of elections, from which comes a list of actions to develop with an exciting title that sells well in the election campaign, but that falls into oblivion the next day to swearing in.

But the pandemic seems to have awakened the Portuguese to the need to think about the future, so that this is what the Portuguese want. António Costa Silva gathered important ideas for the decade in his "Strategic Vision", which today we can all comment on and improve. Regardless of merit, what is inexplicable is that one must produce such an important document in such a short time that it should be the permanent requirement of any state. Without planning, there are no effective choices. But the important thing is not the plans, which will probably have to be changed in a year from now. It is planning that allows us to know the strategic choices we have and make the best decisions every moment.

More than a plan, we now also have a “Banco de Fomento”, capable of implementing the financial muscle that will come from Europe. A development bank's existence, able to capture and allocate national and European resources to projects that stimulate economic growth, is another fundamental aspect of accelerated growth. This was true in virtually all Asian miracles. But it will be a Herculean task to create an institution with the urgency that today has created. Still, it is better late than never, especially if your work's quality is consistent and your influence is lasting.

However, a 120-page document and a development bank are not enough for a successful strategy. What is really difficult is to implement a strategy, especially in the cultural context that is ours - as Peter Drucker said (and I couldn't come up with more):"Culture eats Strategy for breakfast." To successfully implement a development strategy, it is necessary: ​​credibility, convergence, accountability and monitoring.

Credibility is necessary because any strategy lives on people's commitment and adjacent institutions (public and private) with it, who will only participate if they believe. It is essential not to forget that strategy and coordination may come from the State, but success in the economy always depends on convergence with a dynamic, innovative and capitalized private sector (including companies, entrepreneurs and financial institutions) around transforming strategic projects.

Accountability and governance of implementation are important to ensure leadership, the ability to adjust the plan to reality and accountability to the country, as the strategy will bring results beyond the four-year political cycle. In this context, the political process of approval of the strategy must link all those who, in the next decade, have the potential to be in power, defining short, medium and long term indicators that will allow us to know how we are evolving and whether it is necessary to adjust. Without these conditions, the risk is that short-term culture will reign, and that this strategy will once again be a shopping list with no real impact on the development of our economy and society.

Thus, in addition to the "Strategic Vision" and the Banco de Fomento, it is important to create a strategic development entity to coordinate, monitor and adjust the strategy, similar to the Economic Development Board (EDB) in Singapore. Or, alternatively, decline these responsibilities in an existing competent body. Such an entity must have transparent and stable governance and some independence from political power (implying a commitment between government, assembly and president), must equip itself with high quality human resources(with the institutional framework that allows it), must work in proximity to universities (promoting research on the Portuguese economy and monitoring the impact of the strategy), it must effectively dialogue with the private and associative sectors to develop partnership projects between different actors(leaving aside ideological prejudices and focusing on skills and results), it must have a privileged relationship with partners and European institutions(from where funding will come), and it must coordinate with other agencies with specific responsibilities (for example, AICEP, IAPMEI or CCDR).

As Hofstede describes us, designing an institutional architecture to face our cultural atavism as one of the countries with the least "long-term orientation" is a project with unprecedented potential in our recent economic history. In Ireland, which keeps us company at the bottom of the Hofstede ranking, it was the development of such an architecture that promoted the economic miracle. After so many financial crises and decades of economic crisis with an anemic productivity growth, this architecture, working, would be the real bazooka to transform Portugal for the Portuguese. See if this is it…

This content was originally written in Portuguese and published in Jornal de Negócios.

Daniel Traça

Dean at Nova SBE

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