I’ve been hanging out in Portugal for the past week or so. I’m down here on a bit of a working visit to better understand the business environment here these days. I used to visit Portugal during the Winter time to train back when I took the old running quite seriously.
I always associate the place with fond memories — especially of the year that I ran a 56 min 400m after a few solid weeks warm weather training a few miles down the coast from here. By International Standards (well even by Irish standards) this isn’t such a great time but still really enjoyed the process of reaching it!
Back when we came to run Portugal was a very cheap place to visit. Today, however, the story is quite different. Portugal, well certainly Lisbon, has become a very expensive place to live with many locals being priced out of the property market entirely. I heard that the average wage here is now about €450 per month yet I notice many apartments for sale (here in Lisbon) for well over a million Euro.
As an alternative to the Economist’s “Big Mac Index” I often use a coffee index. The cheapest coffee I’ve found here so far was 60c but the most expensive one was €3.20. That’s a massive price difference which appears to reflective of the property and labour market pricing disparites also.
One former Blackberry employee told me that RIM be a great employer here- hiring a local English speaking population to run their customer support across the US, UK/Ireland and Australian regions. At the time they were paying very well but the cost of living was still fairly low.
That economic position has since evolved exponentially to a point where I understand the middle class have been virtually wiped out in some parts. Today you are either rich or poor if you live in Lisbon.
Watching Bloomberg last week I learned that both Facebook and Google are going to start investing heavily in their Portuguese operation. Facebook in particular are keen to see more engineering done here and they aim to hire 100 people in the Artificial Inteligence space asap.
Bloomberg has also been awash with news from Davos with nearly every interview question being prefaced by a reference to the next economic crash. It seems that the question on everyone’s minds is not “will there be another crash” but more “when the crash happens how badly will it be and how widely will it spread”.
I couldn’t help but think of the property inflation that’s been effecting Ireland in recent years as well as the concerns that the German’s and French have about the generous Irish Fiscal Policy for foreign companies. It’s a little scary to take a step back to think about how much these multinational companies (mainly American) really do impact on a European Nation’s economy.
I also wonder whether or not enough planning goes in (at National levels) to manage the longer term impact of such operations and related risks to an Economic region like the Eurozone. It seems to be that a lot of the same conditions are afoot today as we saw just before the last crash.
Sure we don’t have as much cheap money sloshing around the globe, we do however, seem to have a lot of money chasing tech. companies that have questionable long term value to add to the world yet they seem to be contributing to a lot of the challenges being faced right now.
Some of these challenges inlcude issues surrounding “Fake News”, global property inflation in highly sought after areas leading to an erosion of the middle classes like they’re seeing here in Portugal (and in California), not to mention this highly fluctuating Crypto “phenomenon” that’s emerged in recent times. I hope that there’s something more tangible than excitement and tax breaks underpinning these latter areas of current economic growth.
Overall I’ve found the Portuguese people to be very warm and welcoming and it’s been very interesting living here with not a lot of clothes, a laptop, mobile phone and my trusty Zeiss Exolens 2.0x! I tend to walk or run everywhere as the weather has been dry but there is also an excellent public transport system to help one get around should one need it. Food ain’t so cheap but you can find great food at good prices if you shop around…
I look forward to exploring the startup and engineering ecosystem as well as the local property market in more detail with a view towards identifying interesting stories to tell in addtion to possible business opportunites. If you’re based in Portugal or know of any interesting businesses or business people with stories to tell then please do get in touch via the comments below!