Portugal's value proposition to attract international investment is changing. For many years, an important part of our competitiveness was based on relatively low costs. Today, increasingly, what we seek to offer the investor is talent, engineering, knowledge, technology, energy, infrastructure and innovation capacity.

This change is not only desirable. It is necessary.

Portugal will hardly be able to build a more prosperous economy by trying to be the country where it is cheaper to produce. There are always other geographies with lower wages, cheaper land, lower operating costs or less demanding rules. Permanently entering this competition means accepting that our main advantage depends on remaining relatively cheap.

And this is in contradiction with what we want for the country. We want better wages, more productive companies, greater qualification, more investment and better living conditions. To achieve all this, Portugal needs to compete more and more for the value it can create and not just for the cost it can offer.

This is precisely why the transformation of our exports, which I recently wrote about, is so relevant. If a growing share of what we sell to the world incorporates more technology, engineering, and knowledge, it means that we are beginning to build an economy capable of competing in another way.

The same happens in foreign investment. The goal should not simply be to get an international company to set up an operation in Portugal. We must ask what operation we want to attract. A factory is important, but it will be even more interesting if it brings engineering, research, specialised suppliers, intellectual property and decision-making capacity. A technology centre will be more relevant if it helps train people, develop knowledge and create new companies around it.

Naturally, this also increases our responsibilities. We cannot want to compete through talent and then have difficulty hiring engineers. We cannot present renewable energy and infrastructure as advantages and take years to license projects. We cannot want to attract decision-making centres and maintain unpredictable administrative processes. And we cannot aspire to higher value-added activities without continuing to improve the connection between universities, research and companies.

Knowledge-based competitiveness is much more demanding than cost-based competitiveness because it forces us to continuously improve. But it also offers a much greater reward. Higher value-added activities tend to allow for higher productivity, better wages, more sophisticated exports, and companies able to compete in markets where price is not the only deciding factor.

Portugal continues to have competitive costs in several areas, and we should not waste this advantage. The difference lies in realising that this can no longer be the centre of our economic proposal.

Perhaps the question for the coming years is quite simple: when an international company compares Portugal with other countries to decide where to place its next investment, what do we want it to find here that is difficult to find elsewhere?

The answer cannot be just a lower price. It has to be talent, knowledge, stability, energy, infrastructure, technological capacity and an ecosystem where it is possible to invest, grow and innovate.

Portugal does not need to be the cheapest place to invest. It needs to become one of the places where it is most worth investing.

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