The Portuguese research and development (R&D) situation is characterised by a significant dualism: while academic science has been progressing rapidly over recent decades, the private sector has been lagging behind.

Public funding has been the main source of the development of the R&D sector. In 1982 R&D expenditure was 0,30% of GDP. In 1990, after Portugal joined the European Community, this percentage had grown to 0,51%. One decade latter, in 2001, the R&D/GDP ratio had evolved to 0,85%. In 2001 the proportion of public funding was 61% while the proportion of the private business sector in the total financing of R&D was 32%. This evolution was in part due to the important contribution of European Structural Funds. Meanwhile in 2005 the R&D/GDP ratio declined to 0,81%, in part due to a retraction in public funding to 56,0% (the private share raised to 36,5%).

The continuous importance of public funding reveals the role of the public sector in the performance of R&D system in Portugal. This system has been marked by a high degree of centralization, through fund allocation and political coordination. The formal structures for hearing the main stakeholders have only been active occasionally, and the informal channels for participation are few and not very active.

A continuous effort has been made in Portugal since the 1960s to develop and strengthen the science base. Resources have been committed to the training of young scientists and the threshold of 1,000 new PhDs per year has been reached at the beginning of the present decade. Research output has also been expanding rapidly, and Portugal has had an increase in internationally refereed scientific publications. In contrast, research by the private sector, or directed towards the private sector, has not advanced at the same pace.

However, the most recent available figures hint that this situation may be changing. For the first time, according to the statistics for 2005, business expenditure in R&D has grown above one-third of total R&D, reaching 38%. The actual innovative performance of Portuguese firms is to a large extent a consequence of their limited past R&D investment. The relative number of patents filed by Portuguese firms both in the European Patent Office (EPO) and in the United States Patent and Trademark Office (USPTO) has remained well below other countries with similar GDP per capita levels.

Scientific development has been achieved through the implementation of policies directed towards the training of a younger generation of scientists, the funding of basic science and the creation of universities, together with investment in the older universities. Also, the initiative of many of the new scientists has led to the creation of new research organisations, some of them in the legal form of private non-profit RTOs, some other as university research centres.  

With increasing funds available in each new round of structural funds, a proper academic research system has therefore emerged in recent years. The basic management of this system has been set up, with an organisation working as the research council (FCT - Foundation for S&T). The FCT provides the basic funding for the R&D units for periods as long as five years, and organises their regular evaluation. However, the development of the academic system has not been even.

The public labs system that a few decades ago represented the most dynamic R&D agency in Portugal has been declining in terms of available resources and global activity. A thorough review of the public labs system has been initiated by a Council of Ministers’ Resolution taken in June 2006.

Despite the rise in business enterprise R&D expenditure in 2005, there has been a very low involvement of firms in R&D activities. This stems above all from the structural composition of the economy. Manufacturing was dominated until recently by low-tech sectors. This situation has changed to a certain extent, with some medium-tech activities emerging since the late 1980s, and also, more recently, the growth of knowledge-intensive services sectors. 

These developments have, however, not been enough for a significant change in terms of private R&D. Despite the programmes and policies implemented in recent decades aiming at the setting up of NTBFs and other similar developments, the results have been modest. Furthermore, the strategic interests of the larger domestic groups and new FDI projects have generally not been aimed at these sorts of areas.

This situation has been aggravated by a divorce between traditional science policy and technology policy (*). Science policy has evolved from an under-ministry status to a full-ministry status. Technology policy has been coordinated by the Ministry of the Economy (previously Ministry of Industry). These two areas have been managed separately, each one with their own CSF programmes. The lack of coordination between them has been mentioned as an important weakness in several evaluations carried out since the mid-1990s. 

To overcome this problem an organisation (AdI, the Innovation Agency) was created in the early 1990s with the purpose of stimulating high tech businesses and university-industry relationships. However, governance problems have hindered the work of AdI. Also the lack of coordination between these two policy areas and other ministries has produced the decline of the public labs system.

The overall governance of the R&D system is still in the hands of the public sector. The public budget continues to be the main source of funds for R&D and, with the start of the National Strategic Reference Framework (NSRF 2007-2013), it will continue to be for the next few years. In this context community funds will have an important role, as they have in the past with the former Community Support Framework programmes. The expectation is that funds for R&D will grow as the NSRF 2007-2013 is implemented. It should be added that the private sector has played a secondary role, with a very limited involvement in the decisions about the allocation of funds.

(*) See on this J. Caraça (1999), "A prática de políticas de ciência e de tecnologia em Portugal", in M. Godinho & J. Caraça (eds.), O Futuro Tecnológico: Perspectivas Para a Inovação em Portugal, Oeiras, Celta Editora.