Portugal's Retraining Challenge for Generative AI

By Sergio Goncalves

LISBON (Reuters) – Portugal must retrain 1.3 million workers, approximately 30% of its employed population, to effectively utilize generative artificial intelligence (AI) in order to close the productivity gap with the European Union's average by 2030, according to a study released on Monday.

Historically, low productivity has been a major issue for Portugal, with productivity gains contributing an average of 0.6% to compound annual GDP growth between 2010 and 2022—less than half of the EU's average of 1.3%.

The study, conducted by McKinsey, suggests that if the country swiftly embraces automation and generative AI technologies, productivity growth could increase sharply to 3.1% by 2030, aligning with the projected EU average.

Generative AI differentiates itself by learning actions based on past data, enabling it to create new content—such as text, images, or code—rather than merely categorizing or identifying data.

“This offers a unique opportunity for Portugal to directly compete with developed economies in terms of growth,” said Duarte Begonha, a senior partner at McKinsey.

In total, alongside the 1.3 million workers requiring new technical and social skills, an additional 320,000 people in roles like customer service or administrative support will need to transition to new jobs. This requires a collaborative effort among the public, private, and educational sectors.

“The significant investment will focus on altering processes, procedures, and work methodologies,” Begonha explained, noting that for every euro spent on generative AI, 3 euros will need to be invested in managing organizational changes.