moved into sectors of non-tradeable goods and services. Which was fine for a while. But such processes have a limit. And while Governments paid lip service to the importance of innovation to growth, no strong change actually occurred.
It is true that some companies of high technological content appeared and do well. It is true that traditional sectors like textiles and footwear have shown more ability to survive, reinvent and upgrade their products that some anticipated (though many firms failed). Still, no major change in the economy took place.
Then, we suffered the international crisis like any other country. As we were at a lower level of growth, the drop in output was also smaller. The danger now is that a positive view regarding having less of a crisis than other countries will actually keep us in the same path as before. In a couple of years, other countries will be growing fast (ou faster than Portugal), and we will back to the lost decade... a second one.
The challenge the Portuguese economy faces is not the international crisis, but how to produce goods that it can trade in the international market.