Portugal has faced significant challenges with low productivity, contributing only 0.6% to annual GDP growth from 2010 to 2022, which is less than half the EU average of 1.3%.

A recent McKinsey study suggests that this presents a significant opportunity for Portugal to enhance its economic growth and compete more effectively with developed economies.

The study predicts that with proper adoption of automation and generative AI, productivity gains could rise to 3.1% by 2030, aligning with projected EU averages.

To effectively utilize generative AI by 2030, Portugal needs to retrain approximately 1.3 million workers, or about 30% of its employed population.

In addition to retraining, around 320,000 individuals currently in customer service and administrative roles will need to transition to new jobs.

Collaboration among the public, private sectors, and the education system is essential for a successful workforce transition.

Generative AI differs from traditional AI as it creates new content, such as text and images, based on past data rather than simply categorizing existing data.

Investing in generative AI technologies will require a threefold investment in managing organizational changes for effective implementation.

Generative AI presents a unique opportunity for Portugal to enhance its economic competitiveness and address its historical productivity issues.

If Portugal rapidly adopts automation and generative AI technologies, productivity contributions could increase to 3.1% by 2030.