Competitiveness Is Also Decided in the Municipalities

When we discuss the competitiveness of the Portuguese economy, we usually think of taxation, energy costs, productivity, business financing or the ability to attract foreign investment.

By Paulo Lopes, in Business · 09 Nov 2026, 08:01 · 0 Comments

Credits: Pexels; Author: Anderson Pereira;

These are fundamental factors, but there is an often-overlooked dimension in this debate: an important part of Portugal's competitiveness is decided at the level of the municipalities.

The October edition of AICEP's Portugalglobal magazine once again placed investment attraction and execution capacity at the centre of the economic discussion. Portugal is now able to compete internationally for industrial, technological and logistics projects. But between the interest of an investor and the implementation of a project there is a set of decisions that depend directly on the territory where that investment intends to be installed.

An international company may consider Portugal an attractive location, but it needs to find suitable land, available infrastructure, energy, water, access and workers. It also needs to know the administrative procedures and the deadlines needed to start its activity. This is where municipal responsiveness can make a decisive difference.

A municipality that has prepared business areas, up-to-date planning instruments and technical services capable of accompanying investors has an important competitive advantage. On the contrary, unpredictable licensing processes, absence of infrastructure or difficulties in articulation between entities can compromise economically viable projects.

Of course, not all these problems are the responsibility of local authorities. Many decisions depend on central administration, regulators or infrastructure operators. But it is often at the local level that investors first encounter the consequences of this lack of coordination.

There is also another issue that I consider essential. Attracting investment does not only mean making land available or approving projects. A new industrial or technological unit needs workers, and these workers need housing, schools, health services and mobility conditions.

A municipality may be able to attract an important company and, at the same time, discover that it does not have enough housing supply to accommodate the necessary professionals. Business investment and urban planning can no longer be treated as independent realities.

This articulation is particularly relevant for the interior of the country, where there are opportunities to better distribute economic activity. But the availability of space, by itself, is not enough. It is necessary to create conditions so that companies can set up and families have reasons to stay.

Portugal therefore needs municipalities that are not only licensing entities, but true partners in economic development. This requires planning, technical capacity, intermunicipal cooperation and greater administrative predictability.

National competitiveness is built through companies, infrastructures and public policies, but it is achieved in specific places, where investments need to work.

We can promote Portugal in key international markets and make a compelling case for investors. However, the real assessment begins when the time comes to turn a decision into facilities, jobs and economic activity.

Because a country does not become competitive just by the opportunities it announces. It becomes competitive by the ability to materialize them, municipality by municipality.