SPROWT ARTICLE | Ricardo Sousa Carvalho

foto Ricardo Carvalho

Innovation & Technology as Engines of Growth

Introduction


Over the past 15 years, I have been involved in management and technology consulting businesses in Mozambique, South Africa, and Portugal. It has been a unique journey where I have learned—and continue to learn—a great deal.

In a competitive environment like the one we live in, having the best solutions and delivering superior service is essential. This is what clients recognize as value—and, as we know, client recognition is imperative.

Price is what we pay; value is what we receive. Never forget this.

The vast majority of clients and consumers are willing to pay more if the value they receive is greater. This is a fundamental principle that must always guide business decisions—the relationship between price and value.

Concrete Example

We are often willing to dine at a restaurant where the meal is slightly more expensive because we appreciate the quality of the meat or fish, the way it is prepared, the delicious side dishes, and even the flavor of the sauce. Add to that a friendly and attentive waiter.

The opportunity cost, in contrast, would be choosing a cheaper meal where the ingredients are of average or low quality and the service is inattentive. We pay less—but we also receive less value.

That said, there will always be customers whose only decision factor is the lowest price. It is up to companies to define their positioning, often based on their strategy and circumstances.

Businesses that compete solely on price will naturally find it harder to pay higher salaries. After all, salaries are also a cost—at least from an accounting perspective.

It is through better salaries that we improve people’s lives. Do not forget that.

Innovation and Technology as Drivers of Growth – The Value

Let us recall some of the historical innovations that changed the course of the world: the control of fire, writing, the wheel, electricity, the combustion engine, vaccines, the computer, the internet, and more recently, artificial intelligence. All these innovations increased productivity—and productivity is simply value creation.

Innovation is a net contributor to progress, well-being, development, and quality of life. It generates value through greater productivity.

When we incorporate technology into this process, we amplify the power of innovation—enhancing efficiency, competitiveness, and sustainability in businesses.

In today’s global competitive landscape, economic growth depends heavily on a balanced trade structure, ideally supported by exports of high value-added goods. This value largely depends on the level of innovation and technology embedded within companies.

The United States economy is a clear example. Over the past 40 years, strategic planning has propelled technology companies from Silicon Valley to global leadership—demonstrating how innovation and technology drive growth and value.

The value generated through this strategy enabled significant exports and had a major positive impact on the U.S. economy.

Innovation and technology are therefore key drivers of growth and should be a structural priority. However, success begins with strong strategic planning—where economic drivers and differentiators are clearly defined. Only then can innovation and technology effectively create value and productivity.

Resources—especially financial and human—are limited, making decision-making critical. Good ideas are important, but they must also be feasible. This highlights the importance of thinking well and executing even better.

Education plays a crucial role. Developing skilled individuals is a structural pillar. Education is central to innovation and technology—and ultimately, to economic growth.

Financial resources are another key factor. To attract top talent, we must offer better compensation—and for that, adequate funding is essential.

Funding may come from internal or external sources. Since internal capital is often limited, it is important to create systems that attract foreign direct investment (FDI) and maintain a competitive banking sector willing to take risks—rather than relying solely on deposits, interest, and fees.

This ecosystem must operate within a supportive legislative and regulatory framework that stimulates economic activity.

Innovation and technology also require strong leadership. Vision, clarity, energy, and the ability to mobilize are essential. Some individuals possess a unique capacity to think, create, and execute—often combined with creativity. These are valuable assets that can significantly benefit both companies and economies.

5 Key Conclusions

  1. Move from words to action. Too much time is wasted on low-value debates—politically, in business, and even personally. This leads to loss of focus and objectivity. Pragmatism matters. A clear vision of the problem and the solution is essential.
  2. Promote a culture of education, improvement, and meritocracy. Talent should be recognized, empowered, and given the freedom to create and execute. Societies that restrict talent do not grow.
  3. Build a strong ecosystem. Stakeholders must align toward productivity and value creation. Governments should identify key sectors, facilitate FDI, encourage banks to support investment, and ensure only necessary bureaucracy.
  4. Ensure effective education. True education builds capability—not just diplomas. Innovation requires real competence.
  5. Think globally. The world is the marketplace. Scaling businesses is easier than ever thanks to connectivity, transportation, and communication.