Welcome to the page of the State Visit to United States of America

It is for me a great pleasure and honor to be welcomed to Stanford University. I would like to thank the University’s Board, in the person of Professor John Hennessy, for his kind invitation, and the Hoover Institute, for their warm welcome.

I would also like to thank the Center for Global Business and the Economy for sponsoring the organization of this conference. I would like to greet everyone present and thank you for attending.

I would like to point out the happy coincidence that my visit to Stanford and to Silicon Valley coincides with the opening of the 2011 edition of the Global Entrepreneurship Week, an initiative which I have supported ever since its inception.

This is not my first visit to Stanford. I have extremely fond memories of my first trip, in 1978, as part of the International Visitor’s Program of the State Department, a memory which is enhanced by the similarities of this region with the Portuguese coastline.

In fact, the Portuguese coast shares many similarities with California, and in particular with the San Francisco Bay area. Besides the fact that Portugal is also situated on the west coast of Europe, between the Atlantic and our Spanish neighbors, and that our capital city, Lisbon, has a twin bridge to the San Francisco, we enjoy a temperate climate that is very similar to that which predominates here in the Silicon Valley region.

When I visited Stanford for the first time, as Professor and Director of the Department of Economic Studies of the Bank of Portugal, I immediately understood some of the elements that, over the years, have made this university an exceptional academic institution. A campus of rare natural beauty that stimulates diversity, innovative teaching methods, a focus on excellence, outstanding infrastructures and opportunities for research that hence attract the best students and researchers. These factors, together along with the proximity to Silicon Valley, make Stanford a truly unique university in the world.

Ladies and gentlemen,

I am a citizen of Europe who believes in the project of a united Europe. You all know that the European Union is currently going through a decisive moment for its future. What is at stake is to defend the best asset that the Europeans have for addressing the challenges of the present and the uncertainties of the future: European integration, of which the Euro is today a central component.

The period that we are facing requires action and, more than that, immediate action. The markets do not wait for lengthy discussions and endless negotiations. More than ever, the present time demands true convergence of views, solidarity and responsibility from European States and institutions.

With the adoption of the Euro, Portugal benefited from a decrease in interest rates and from greater access to the international financial markets. Consequently, domestic demand expanded greatly – which was not curtailed by the authorities – and national savings declined. At the same time, the non-trade goods sector grew while that of trade goods decreased. This led to an imbalance in public accounts and an increase in foreign debt, which were accentuated by the international crisis of 2008.

Recently, Portugal signed a financial assistance program with the European Union and with the International Monetary Fund, which enjoys the support of a large majority in Parliament and which the Portuguese Government is firmly determined to fulfill.

I want to reaffirm that Portugal will fully honor its commitments, it will restore balance to its public finances and press ahead with the structural reforms that are necessary to make its economy more competitive.

The Portuguese citizens are being asked to make harsh sacrifices, to which they have responded with a great sense of patriotic responsibility, but also with the hope that the path we are following will lead to a healthy and competitive economy.

If this path seems uncertain and distant, it is important to recall that throughout its History, Portugal has faced and overcome challenges that many would have considered impossible to surpass.

This ability to contradict skeptics and pessimists is a characteristic that has distinguished the Portuguese for many centuries.

Over the last four decades we have a number of examples of outcomes that surprised those who are not familiar with Portugal’s character. It is for this reason that I intend to show you another perspective of my country, different from that which is generally portrayed in the simplistic structure of television news tickers.

In the 1970’s, during the years that followed the implementation of democracy, Portugal received more than 700 thousand citizens who had been living in its African colonies, which had become independent countries. What many thought would be a dramatic process with catastrophic consequences resulted in the integration into Portuguese society of almost a million people without major upheaval.

This phenomenon of peaceful integration was unique when compared with other colonial powers that went through decolonization processes. But, above all, this process demonstrated our ability to rapid adaptation to new scenarios, as the citizens who returned to Portugal – many of whom had always lived in Africa – quickly became active, integrated citizens and entrepreneurs, as well as dynamic protagonists of economic and social development.

Furthermore, Portugal was able to develop an exemplary forward-looking and friendly relationship with its former colonies. A relationship built on the basis of mutual respect, which hold extraordinary value. The eight countries with Portuguese as their official language are today grouped into an international organization for cooperation, the Community of Portuguese Speaking Countries. The initiative for this organization came from Brazil, an emerging power with an admirably vigorous economy, with which we maintain a special historic relationship.

We managed to use to our advantage one of our most important assets, a universal language spoken by more than 250 million human beings on all continents. Portuguese is the third most used language on Twitter. The Portuguese language has undeniable value as a means of communication and as an essential element of economic competitiveness. In China, the Portuguese language guarantees employment immediately after it has been learned.

In the 1980’s, Portugal surprised the world with its ability to adjust to its new situation as part of the European Community. At the time, many believed that Portugal would fall short of the targets for joining the European Community, arguing that the country was not prepared for the demands of a common market of millions of producers and consumers.

Portugal joined the European Community in 1986, adapting its institutions and policies and mobilizing its citizens around one major collective goal. Shortly thereafter, everyone acknowledged the Portuguese case as an example to be studied as a model of integration within a large-scale economic space.

In little more than a decade, Portugal’s income per capita went from around 50 percent to 75 percent of the community’s average.

During the last two decades, Portugal has presided over the European Union three times, and its leadership was recognized as one of the most productive in the history of the united Europe. The economic roadmap of the European Union was named “The Lisbon Strategy” and the treaty that governs the European Union is the “Lisbon Treaty”.

I would add that a number of Portuguese have held high-ranking positions in international institutions. For example, the President of the European Commission is Portuguese, which bears witness to the credibility and prestige that the Country enjoys among the other countries in the Union.

At an international level, Portugal is recognized for its vocation as a builder of consensus and of bridges of understanding between countries and cultures. Its History grants it a stock of knowledge and established friendships throughout the world. This explains facts that may seem surprising to some. For instance, Portugal was elected a number of times to the United Nations Security Council, ahead of countries of much greater size and economic power.

Furthermore, Portugal has a Diaspora of millions of human beings in all corners of the globe, including in this area, with growing economic and social importance, and this represents an exceptional factor of mobilization in our favor.

Ladies and Gentlemen,

On the economic front, for many years, Portugal’s competitive edge was its inexpensive labor force. As a consequence of international trade agreements and competition from Asian economies in the 1990’s, Portugal’s economy has undergone a difficult process of adaptation in some sectors, during the last 15 years, especially concerning the so-called traditional sectors.

However, some sectors, like the textile and footwear industries, that at a certain point, were considered to be in danger of extinction, are presently experiencing renewed vigor in the international markets, as a result of an unusual capacity for technological reinvention and the incorporation of new dimensions of value, like design and branding.

On the other hand, many daring innovations in mobile telecommunications, in transport or in banking, that today are disseminated around the world, are Portuguese inventions that originated in Portuguese companies and were first tested in our national market. This is the case, for example, of the pre-paid card for cell phones, the automatic toll system and the interbanking ATM integrated network.

Portugal is known, in the United States, for its History and the beauty of its landscapes, not so much for the value of its technological knowhow. Nevertheless, we have been reaching new levels of competitiveness in various scientific areas, such as the neurosciences, transparent electronics, mobile telecommunications, nanotechnology and computer technology. Science and innovation infrastructures were areas in which, alongside physical infrastructures, Portugal experienced greatest progress in the last two decades.

New world-class science and technology centers were set up in Portugal in areas with great growth potential, proving that Portugal has the capacity to attract talent, whether arising from our universities or coming from abroad.

The country has been asserting itself internationally through the quality of its researchers, the excellence of its scientific production and its full integration into the most representative and prestigious global scientific networks.

The best Portuguese research centers and universities have established exchange programs that include the sharing of knowledge and experiences, as well as provide mobility with the best universities in the world.

In the qualification of its human resources the country has made a significant leap in the last two decades. The generation that was born in the 1980’s, the generation of many of you here in this auditorium, is the most qualified ever in Portugal. In just two decades, the number of graduates has grown fivefold.

During the same period, Portugal registered one of the highest growth rates in Europe in terms of the number of new PhDs, half of which in the field of the exact sciences, engineering and technology.

In the last decade, in aggregate terms, Portugal doubled its investment in R&D in proportion to GDP. Presently, this rate is 1.7%, which places Portugal close to the European Union’s average, with the majority of these research activities being carried out in a business environment.

As a result of all of this progress in the qualification of our younger generations, there have been notable advances in the fields of scientific production, where Portugal’s presence has been internationally acclaimed in a number of areas of knowledge.

In the last decade, the national scientific community recorded the second best growth rate in scientific production among all the countries of the European Union. And along with the United Kingdom, the United States is the country with which most researchers collaborate in terms of joint scientific production.

Within two decades, Portuguese universities have stepped up to the forefront in European and even world-wide knowledge networks in the area of science and technology. National academic institutions are recognized for their international openness and for the quality of their researchers.

In short, in recent decades, Portugal has been one of the countries that, has evolved the most both in the European Union and among all the OECD countries according to the indicators that measure progress in the ability to innovate, with growth rates well above that of the European average.

On the other hand, as a result of the public sector’s effort to incorporate new information technologies, Portugal is today the European leader in the availability and quality of online public services.

These examples reinforce the argument that there are neither shortcuts nor coincidences in the emergence of an innovative and creative economy, open to the exploration of new ideas and new technologies.

Only a long-term vision and a persistent drive towards the training of human resources and the attraction of talent, bolstering scientific infrastructures and a culture of production and practical application of knowledge, will enable the expected fruits to be harvested.

This is the path that we are treading. This is the other story of my country. The story that I want to tell you today, here at Stanford University. The story of a country connecting with the future.

Ladies and gentlemen,

As Thomas Astley wrote in the 18th century, quoted by David Landes in the book “The Wealth and Poverty of Nations”, referring to the discoveries made by Europeans, «In the merit and glory of these achievements, the Portuguese, without any controversy are entitled to the first and main share and it must be acknowledged, that they were the first set out to carry forward the navigation of the seas and brought to the minds of other Nations, the desire to embark on the discovery of distant lands.».

We know that the epic adventure of the discoveries that began in the 14th century was also not the work of chance. The History of Portuguese expansion arose from a systematic learning process, which turned us into the leading global power at that time. The History of the Portuguese discoveries is an inspiring narrative of the creation of new technologies and daring entrepreneurs.

Central to this story is Prince Henry’s ability to attract to Portugal an elite of scientists from other parts of Europe, thus founding a pioneering network of knowledge, known as the Sagres School, where wise men and experts from various areas of the knowledge of navigation and ship-building shared information and experiences.

The Sagres School implemented an audacious operation to attract talent, performing high level scientific and technological work, involving knowledge production and management. A Portuguese philosopher called this movement “the construction of a launching pad” and a historian compared it with “NASA’s Cape Canaveral of the 1960s”.

For me, the spirit of the Sagres School is similar to that of Stanford University. There is a clear parallel between the Sagres School, with the navigators and seamen and financiers of the diverse maritime companies, and Stanford University’s connection to Silicon Valley’s entrepreneurs and risk capital financiers.

Each voyage that the Portuguese made was an experience, an incentive to do better and to accumulate knowledge. Each voyage was planned based on previous journeys, with the aim of always going further, step by step. With a high propensity to learn from their mistakes, fear gave way to reason and to method in order to run greater risks and overcome failures. This could well be the method of the entrepreneur of modern times.

In deciding to head East, using sea currents that took them to the edge of South American shores, the Portuguese would innovatively run against the conceptions of the time, demonstrating extreme trust in their own capacity to always find a way and thereby discovering the sea route to India that Columbus thought he had found in the lands of America.

For many decades Stanford has been the main powerhouse of scientific and technological production that drove Silicon Valley, a place that is internationally acknowledged as one of the most productive regions of high technology in the world.

From the outset, in Packard and Hewlett’s garages, the secret of the success of Stanford and of the Silicon Valley has to do with the strong and virtuous connection between the academy, entrepreneurs and the application of scientific knowledge and technological development to the creation of profound innovations with world-wide success.

Historically, the mere access to state-of-the-art technology does not explain the success of companies and countries. In comparing these two examples, it is pertinent to question what type of culture of a people favors the appearance of these «navigators» and «explorers» of Sagres and of Stanford?

A fundamental factor seems to be a fascination for adventure and risk. The spirit of discovery is possibly another. The courage to learn with experience and with one’s mistakes is certainly essential. This is, without doubt, the profile of the entrepreneurs in Silicon Valley, including the many Portuguese who flocked here trying to make their dreams come true.

Ladies and gentlemen,

Silicon Valley has a critical mass of resources and a culture that grants it an exceptionally singular status. It would be hard to replicate anywhere else the unrivalled conditions that exist here. Rather than just imitate what is certainly a unique system of innovation, our path should be that of building bridges between the best Portuguese and American scientific institutions, and the most talented entrepreneurs of both countries, so that their ideas can reach Silicon Valley, and the spirit and culture of Silicon Valley can positively infect Portugal’s institutions of innovation.

A long time ago, someone said that if the profits from the trading of products can be substantial for nations, they are, however, less significant when compared with the exchange of ideas.

The mobility of students and of teachers between universities enables the fruitful exchange of experiences, of cultures and of mutual inspiration for diversity and complementarity.

I therefore consider the possibility of establishing student exchange programs between Portuguese Universities and Stanford to be of the utmost interest, in similar fashion to what has happened with other highly prestigious American Universities, like Carnegie Mellon, MIT or Austin. I know that many Portuguese students would like to participate in these programs and I am certain that students from Stanford could also carryout part of their work in Portuguese universities.

We are at Stanford, experiencing a climate of uncertainty in the international arena, with huge challenges looming. But we are cheered by a spirit of confidence and I am certain that we will once again find the path to the future. Planting seeds for the future is what brought me here today. We want to build knowledge bridges between our universities. We want, ultimately, to apply what I would call the formula of the three S’s: from Sagres, to Stanford, for Success.

Thank you very much.