Between 2022 and 2024, 42.5% of companies with 10 or more employees said yes. Taken on its own, that sounds like a healthy, innovative economy. It's only once you look at where that number came from, and where it's heading, that the real story appears.
Every two years, the National Statistics Institute (INE) and the DGEEC send a long questionnaire to thousands of Portuguese companies. It asks, in different ways, the same basic question: did you change something? A new product, a new way of manufacturing, an in-house R&D project, even an idea that was tried and abandoned — it all counts as innovation activity.
A pandemic-era high, now fading
Innovation in Portugal didn't rise in a straight line. It surged during the pandemic years, then started sliding back down. Between 2016–2018 and 2018–2020, the share of companies reporting any innovation activity jumped by 15.6 percentage points — one of the largest moves in the survey's history. Much of that spike came from a single source: companies scrambling to change how they operated in order to survive lockdowns, remote work, and disrupted supply chains. In the statistics, that scramble shows up as process innovation, which alone rose 14.7 points in the same period.
Share of companies with 10+ employees reporting innovation activity, by type and survey period. Source: INE / DGEEC, CIS 2022–2024.
That kind of change, born out of necessity, doesn't tend to stick. As the emergency eased, so did the numbers: process innovation has now fallen for two survey rounds in a row, giving back nearly half of its pandemic-era gain. Product innovation, meanwhile, barely moved the whole time — a reminder that inventing a genuinely new product is a slower, steadier habit than rearranging how a business runs under pressure.
Innovation has a size problem
The 42.5% headline figure hides just how unevenly innovation is spread across the Portuguese economy. Large companies — 250 employees or more — report innovation activity at nearly double the national rate. So do two specific industries: information & communication, and financial & insurance services, both built around constant product cycles and digital infrastructure.
Share of companies reporting innovation activity, by group, 2022–2024. Source: INE / DGEEC, CIS 2022–2024.
Company size isn't just correlated with innovation — it likely enables it. Bigger companies can absorb the cost of a failed R&D project or a product that never ships; smaller ones often can't. Education tells a similar story: in 2024, 9.8% of all Portuguese companies were both innovative and staffed mostly by university graduates. Among companies with no university-educated staff at all, that figure was 4.5% — less than half. The resources to innovate, in other words, aren't distributed evenly, and neither is the willingness to try.
One sector swims against the current
Compared with the previous survey round, innovation activity fell in nearly every sector of the Portuguese economy. Transport & storage and financial & insurance services cooled the fastest. Industry was the lone exception — the only sector in the entire survey to post an increase.
Percentage-point change in the share of innovating companies, 2020–22 to 2022–24. Source: INE / DGEEC, CIS 2022–2024.
The report doesn't explain why industry bucked the trend while almost everyone else pulled back. But the contrast is telling: a sector built around physical production, often assumed to be slower-moving, was the one still leaning into change while the rest of the economy caught its breath.
More money, fewer believers
Here's the paradox at the heart of this survey: even as fewer companies innovate, the country as a whole is spending more on it. Total innovation spending reached €4,865.1 million in 2024, up from €3,382.4 million in 2022 — a jump of nearly €1.5 billion. That money isn't spread out either: Greater Lisbon and the North together account for three out of every four euros spent.
Innovation spending by region, 2024, € millions. Source: INE / DGEEC, CIS 2022–2024.
Part of that spending has a green thread running through it: 25.4% of companies introduced an innovation with some environmental benefit, and the money behind it — €1,448.3 million — made up 29.8% of everything Portugal spent on innovation in 2024. Put together, the picture is one of concentration rather than participation: fewer companies are innovating, but the ones that do are betting bigger.
That split matters because of what non-innovators say about themselves. Among companies that already innovate, 16% say they simply don't feel the need to do more. Among companies that don't innovate at all, that share more than doubles, to 34.5%. For a large slice of Portuguese businesses, sitting still isn't a resource problem — it's a choice.
Guarding ideas the cheap way
When Portuguese companies do protect what they've built, they overwhelmingly reach for a trademark rather than a patent. Registering a brand name is quick and inexpensive; patenting an invention is neither, and the survey shows exactly how that trade-off plays out in practice.
Share of companies using each intellectual property instrument, 2022–2024. Source: INE / DGEEC, CIS 2022–2024.
It's a fitting bookend to the rest of this data: an economy of mostly small companies, innovating in short, practical bursts, protecting what little they build with the fastest and cheapest tool available — rather than making the slower, riskier bet a patent requires.
The bigger picture
Put the pieces together and Portugal's innovation story stops looking like a straight upward line and starts looking like what it actually is: a crisis-driven spike that is still working its way back to earth, held up by a small group of large, urban, tech- and finance-heavy companies, while spending climbs even as the number of companies willing to take part keeps shrinking. The pandemic proved Portuguese businesses could change fast when they had no other choice. The much harder question — the one this survey can't fully answer — is whether they'll keep changing now that they do.