SME'S SUPPORT AND REGIONAL POLICY IN EU - THE NORTE-LITORAL PORTUGUESE EXPERIENCE

2. FIRM’s STRATEGIES IN NORTE-LITORAL

The Norte-Litoral sub-region (3 million inhabitants) is the more developed part of
Regiao do Norte, a policy and investment co-ordination space under the Ministry of
Planning of Portugal. It is a diversified territory with the city of Porto as the leader of
the correspondent metropolitan area. This sub-region accounts for about 98% of the
industry of Regiao do Norte and has 52 % of manufacturing employment of Portugal.
The territory has some well defined local productive systems (Silva, 1988) which
concentrate the most part of ‘low tech’ industries of Regiao do Norte (textiles, apparel,
leather/footwear, wood, cork) while the metropolitan area of Porto presents a diversified
structure with an important Machinery and Metal Products industry and a more
significative presence of ‘high-tech’ firms.

2.1 Entrepreneurial model and recent policies

Important research has been produced on the entrepreneurial model of Norte-Litoral
(Costa and Silva, 1993; Figueiredo, 1993; Silva and Mota, 1996) and the innovative
behaviour of its SME. The main conclusions of these studies may be summarised as it
follows:

• Under Community Support Framework I (CSF I) (1989-1994), firms' investment
was directed mostly to modernisation of infrastructure and productive equipment,
associated with some product and process incremental innovation;

• R&D and marketing innovation were rare, and purchasing of real services was
almost limited to the basic services (accounting, taxes, law);

• Suppliers of machinery and clients were the main sources of innovation;
management reorganisation and improvement of qualifications deserved minor
attention in investment projects;

• More recently, Silva and Mota (1996) found evidence and pointed out some signs of
change in the first two years under CSF II (1994-1999). Some of the firms inquired
by the authors mentioned more radical process innovations, technological audits and
quality certification as new investment directions, sometimes associated with
external services of technological agencies.

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