Blog

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 providing better service is key. This is recognized by clients as value. And as we know, client recognition is essential.

Price is what we pay, value is what we receive. Do not forget that.

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 we must always keep in mind in business, the relationship between price and value.

Concrete Example

We are willing to go to a restaurant where the meal is slightly more expensive because we like the quality of the meat or fish, how it is cooked, the delicious side dishes, and even the sauce. Add to that a waiter who is friendly and pleasant.

The opportunity cost in this scenario would be paying less for a meal where the quality of the ingredients is clearly average or low, and the waiter is inattentive and unhelpful. We pay less, but we also receive less value.

That said, there will always be customers and consumers for whom the only decision factor is the lowest price. It is up to companies to determine their positioning, often based on their own circumstances or strategy.

Naturally, businesses that compete solely on the lowest price will 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 me begin by recalling some historical innovations that changed the course of the world such as 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 nothing more than 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 bring in a tool that amplifies the power of innovation, improving efficiency, competitiveness, and sustainability in businesses.

Today, in a global competitive landscape, economies and their growth depend heavily on a balanced trade balance, preferably supported by exports of high value added goods. This value depends greatly on the level of innovation and technology embedded by companies.

The United States economy is a prime example. Over the past 40 years, through strategic planning that propelled leading technology companies from Silicon Valley onto the global stage, it has shown how innovation and technology drive growth and value.

The value generated by this strategy and its execution led to significant exports and a major positive impact on the United States economy.

Innovation and technology are therefore key drivers of growth and should be a structural priority for economic agents. However, the starting point must be solid strategic definition and rigorous planning, where economic drivers and specific differentiators are considered. Only then can innovation and technology add value, greater productivity.

Resources are limited, especially financial and human ones, which is why choices are critical. Good ideas matter, but they must also be feasible. This highlights the importance of thinking well and executing even better.

Education plays a decisive role here. Training high quality individuals is a structural pillar. Education is central to innovation and technology and, consequently, a driver of growth.

Financial resources are another key element. We can only attract the best talent if we pay better, and to do that, we must ensure adequate funding for execution.

Funding can come from internal or external sources. Since internal funds are often limited, it is important to have a system that attracts foreign direct investment and a competitive banking sector willing to take risks, not one that merely relies on deposits, interest, and fees.

This dynamic, supported by foreign direct investment and banking, must operate within an appropriate and favorable legislative and regulatory framework that stimulates the economy.

Innovation and technology also require leadership. Vision, clarity, energy, and the ability to mobilize are key elements. Some individuals possess unique vision and energy, along with a distinctive ability to think and execute, often combined with creativity. These are valuable assets that can significantly benefit companies and the economy.

5 Main Conclusions

1. We must move from words to action. We waste too much time on low value debates and discussions, politically, in business, and even personally. This leads to a loss of focus and objectivity. Pragmatism matters, it was likely the foundation behind the invention of the wheel, the control of fire, and the development of the combustion engine. A clear vision of both problem and solution, with focus, is essential.
2. A culture of education, self improvement, and meritocracy is crucial. The best should be recognized, empowered, and given freedom to create and execute. Societies that restrict or limit talent do not grow.
3. The ecosystem is key. Different stakeholders must align toward productivity and value creation. The state must identify key sectors, growth drivers, facilitate foreign direct investment, encourage banks to support the economy and investment, and ensure only the necessary level of bureaucracy. Without resources or conditions, growth is impossible.
4. Effective education, one that prepares and makes citizens useful, is essential. The foundation of innovation and technology proves this, no one innovates without capability. This goes beyond simply obtaining a diploma, it is deeper than that.
5. Think globally. The world is the marketplace, and scaling businesses is easier today thanks to greater connectivity, transportation, and communication.