The Competitiveness Factors Operational Programme (COMPETE)

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The Competitiveness Factors Operational Programme (COMPETE) is a business angel co-investment program in Portugal.
What are the main aims and objectives?

COMPETE aims to significantly boost the country's economic competitiveness and promote innovation. The program focuses on transforming the economic fabric by supporting knowledge-intensive activities, investment in tradable goods and services, and strengthening the export orientation of Portuguese companies, particularly SMEs. COMPETE seeks to mobilize resources and skills to promote job creation and foster convergence with more developed EU economies. Key objectives include developing research and innovation capacities, enhancing digitalization benefits for businesses, strengthening SME growth and competitiveness, promoting energy efficiency and renewable energies, and supporting the adaptation of workers and enterprises to change. 

How does the program work?

COMPETE operates by launching calls for tenders in various areas, including SME internationalization, research and technological development, productive innovation, and business training. These calls have specific application periods, eligibility criteria, and targeted beneficiaries. The programme aims to support a wide range of activities, from individual innovative projects to joint operations for internationalization, ultimately contributing to the transformation of Portugal's economic fabric and promoting convergence with more developed EU economies.

COMPETE is structured around three main strategic pillars: A More Competitive Portugal, A Greener Portugal, and A More Social Portugal. These objectives focus on supporting investment in research and innovation, digitalization, competitiveness, internationalization, climate transition, and improving skills and qualifications in the business environment.

A More Competitive Portugal (2,567 million euros)

  • Supports investment in research and innovation, digitalization, competitiveness, and internationalization of companies
  • Focuses on skills for smart specialization and industrial transition

A Greener Portugal (815 million euros)

  • Addresses climate transition challenges
  • Supports innovation for company decarbonization and energy efficiency
  • Invests in reinforcing renewable energies

A More Social Portugal (400 million euros)

  • Improves skills and qualifications in the business environment
  • Promotes adaptation of workers and enterprises to change
  • Aligns with priorities of the European Pillar of Social Rights

The programme primarily targets the less developed regions of mainland Portugal, specifically the North, Center, and Alentejo regions. It is implemented through various support systems and incentive schemes for businesses, concentrating on specific objectives such as developing research and innovation capacities, harnessing digitalization benefits, strengthening SME growth and competitiveness, promoting energy efficiency and renewable energies, and supporting worker and business adaptation to change.

What is the overall cost?

The program has a budget allocation of 3.904 billion euros, consisting of 3.504 billion euros from the European Regional Development Fund (ERDF) and 400 million euros from the European Social Fund (ESF).

How was it implemented?

COMPETE was created as part of the country's broader strategy to enhance economic competitiveness and promote innovation. The program's origins can be traced back to the early 2000s when Portugal began to focus more intensively on improving its economic performance and aligning with European Union objectives.

COMPETE emerged from the National Strategic Reference Framework (NSRF), which was Portugal's overarching plan for implementing EU cohesion policy funds. The program was designed to address specific market failures and challenges in the Portuguese economy, particularly in areas such as research and development, innovation, and business competitiveness. It aimed to mobilize resources and skills to promote job creation and foster convergence with more developed EU economies.

The creation of COMPETE involved a collaborative process between national and regional authorities. Each of the NUTS 2 regions in Portugal was asked to prepare its own "Regional Strategy 2015" under the direction of its Commission for Regional Co-ordination and Development. These regional strategic documents served as inputs to the Regional Operational Programmes and helped to adjust the Thematic Operational Programmes of the NSRF, including COMPETE.

Over time, COMPETE has evolved through different programming periods. The current iteration, known as COMPETE 2030 or the Innovation and Digital Transition Programme, is part of Portugal 2030, which represents the Partnership Agreement between Portugal and the European Commission for the implementation of cohesion policy funds for the 2021-2027 period.

What impact has been measured?

Analysis found that COMPETE has had the following impact:

  • Supported 700 companies for research, development, and innovation activities
  • Facilitated 2,000 R&D projects
  • Reinforced R&D and Innovation with €2.1 billion in investments
  • Benefited 4,000 SMEs
  • Improved SME competitiveness with €2.5 billion in investments
  • Implemented 90 projects with access to online public services
What lessons can be learned?

Some limitations of the program have been noted:

  • The majority of Portuguese markets exhibited a reduction in competition intensity from 2000-2009, despite COMPETE's efforts
  • Some investments would have been made even without EU funding, potentially reducing the overall effect of the support
  • In some cases, ERDF funding may have negatively affected the economic prospects of non-beneficiary SMEs competing in the same markets

CURATED BY

Simona Bielli

Research Programme Coordinator – Digital Startups
Nesta
United Kingdom