Portugal Aims to Boost Productivity by Retraining 30% of Workforce in AI
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Portugal could boost productivity if third of workforce trained in AI, study shows
LISBON, Oct 21 (Reuters) - Portugal must retrain 1.3 million workers, or around 30% of its employed population, to work with generative artificial intelligence in order to close the productivity gap with the European Union's average by 2030, a study showed on Monday. Low productivity has long been Portugal's Achilles' heel, with productivity gains contributing, on average, just 0.6% to compound annual GDP growth between 2010 and 2022, less than half the EU average of 1.3%. Advertisement · Scroll to continue The study released by consulting firm McKinsey points to a potential sharp increase in that contribution to 3.1% by 2030, in line with the projected EU's average then, if the country quickly adopted automation and generative AI technologies, priming its workforce for the change. Generative AI learns how to take actions from past data and creates new content - a text, an image, or computer code - based on that training, instead of simply categorising or identifying data like other AI. Advertisement · Scroll to continue "It is a unique opportunity for the country to compete directly with the developed economies of the world in terms of growth," McKinsey senior partner Duarte Begonha said. In addition to the 1.3 million workers in need of new technological and social skills, it will be necessary to shift some 320,000 people working in roles such as customer service or administrative support to new jobs, and for the public, private and the education sector to work closely together. "The big investment will be in changing processes, procedures and ways of working," he said, explaining that for every euro invested in generative AI technologies it will be necessary to invest 3 euros in managing the change in organisations. Reporting by Sergio Goncalves; Editing by Alison Williams Our Standards: The Thomson Reuters Trust Principles., opens new tab
[2]
Portugal could boost productivity if third of workforce trained in AI, study shows
LISBON (Reuters) - Portugal must retrain 1.3 million workers, or around 30% of its employed population, to work with generative artificial intelligence in order to close the productivity gap with the European Union's average by 2030, a study showed on Monday. Low productivity has long been Portugal's Achilles' heel, with productivity gains contributing, on average, just 0.6% to compound annual GDP growth between 2010 and 2022, less than half the EU average of 1.3%. The study released by consulting firm McKinsey points to a potential sharp increase in that contribution to 3.1% by 2030, in line with the projected EU's average then, if the country quickly adopted automation and generative AI technologies, priming its workforce for the change. Generative AI learns how to take actions from past data and creates new content - a text, an image, or computer code - based on that training, instead of simply categorising or identifying data like other AI. "It is a unique opportunity for the country to compete directly with the developed economies of the world in terms of growth," McKinsey senior partner Duarte Begonha said. In addition to the 1.3 million workers in need of new technological and social skills, it will be necessary to shift some 320,000 people working in roles such as customer service or administrative support to new jobs, and for the public, private and the education sector to work closely together. "The big investment will be in changing processes, procedures and ways of working," he said, explaining that for every euro invested in generative AI technologies it will be necessary to invest 3 euros in managing the change in organisations. (Reporting by Sergio Goncalves; Editing by Alison Williams)
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A McKinsey study suggests that Portugal could close its productivity gap with the EU average by 2030 if it retrains 1.3 million workers in generative AI technologies.
Portugal's AI-Driven Productivity Boost
Portugal is setting its sights on a significant economic transformation through the power of artificial intelligence (AI). A recent study by consulting firm McKinsey has revealed that the country could potentially close its productivity gap with the European Union average by 2030, provided it undertakes a massive workforce retraining initiative focused on generative AI technologies
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.The Productivity Challenge
Historically, Portugal has grappled with low productivity, which has been a major hindrance to its economic growth. Between 2010 and 2022, productivity gains contributed a mere 0.6% to the country's compound annual GDP growth, less than half the EU average of 1.3%
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. This longstanding issue has been described as Portugal's "Achilles' heel," underscoring the urgent need for transformative measures.The AI Solution
The McKinsey study proposes an ambitious plan: retrain approximately 1.3 million workers, representing about 30% of Portugal's employed population, to work with generative AI
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. This large-scale upskilling initiative could potentially catapult Portugal's productivity contribution to GDP growth from 0.6% to 3.1% by 2030, aligning it with the projected EU average2
.Understanding Generative AI
Generative AI, the focal point of this proposed transformation, is a cutting-edge technology that learns from past data to create new content, such as text, images, or computer code. Unlike traditional AI systems that merely categorize or identify data, generative AI has the capacity to produce original outputs based on its training
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.The Scale of Change
The study outlines the magnitude of the task ahead:
- Retraining 1.3 million workers in new technological and social skills.
- Shifting approximately 320,000 people from roles in customer service or administrative support to new positions.
- Fostering close collaboration between the public, private, and education sectors
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Investment and Implementation
Duarte Begonha, a senior partner at McKinsey, emphasizes that the primary investment will be in "changing processes, procedures and ways of working"
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. He notes that for every euro invested in generative AI technologies, an additional three euros will need to be invested in managing organizational change2
.A Unique Opportunity
Begonha views this initiative as "a unique opportunity for the country to compete directly with the developed economies of the world in terms of growth"
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. If successful, this AI-driven transformation could position Portugal as a competitive player in the global economy, marking a significant turning point in its economic trajectory.As Portugal embarks on this ambitious journey, the world will be watching to see if AI can indeed be the catalyst for closing longstanding productivity gaps and reshaping national economies.
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