Lisbon is betting that hosting the Web Summit, Europe's largest tech event, will spur the growth of startups and draw foreign investors, helping it compete with the continent's main innovation hubs.
While the crisis hammered the Portuguese economy, it also drove change, pushing people to come up with new ideas for businesses—many of them tech startups.
During the first half of the year the number of new companies that were created was 3.3 times higher than the number of firms that went under, according to government figures.
To fuel the expansion of the startup sector the government lobbied hard to bring the annual Web Summit to Lisbon. The tech expo has been held every year in Dublin since its launch in 2010. Some 50,000 participants and 15,000 companies from around the world are expected to attend the November 8-10 event, nearly double the 27,500 people who attended last year. Lisbon will host the annual event until at least 2018.
Portugal's secretary of state for industry, João Vasconcelos, said he hoped hosting the event will give rise to a new generation of entrepreneurs.
"A Web Summit generation, with a global mentality," he told AFP.
Web Summit chief executive Paddy Cosgrave said the strong government support given startups in Portugal was one of the reasons why he moved the event to Lisbon.
"They recognise the value of technology and want to put Portugal on the map as a tech hub," he said.
The Portuguese capital is well placed to become a tech hub because it has strong infrastructure, a "vibrant tech community", cheap rents and an educated workforce that is fluent in English, Cosgrave said.
"These are all key factors for making a good environment for startups," he added.
The city has already given rise to a number of "brilliant" new firms with strong growth potential such as Codacy, which has developed a software tool that automatically reviews computer code, said Cosgrave.
"The Web Summit will place Lisbon amid the European startup capitals, alongside London and Berlin," said Codacy co-founder Jaime Jorge, who often travels to Silicon Valley in California, the heart of the tech universe, to drum up business.
Since 2010, 40 Portuguese startups have raised a combined total of more than $166 million, according to a European Commission report on Portuguese startups published last year.
While the figures trail those of Britain, Germany and France, the report said "the data tells you how recent and strong is the growth of the Portuguese startup ecosystem".
Cabral, Thomas (2016). Lisbon dreams of Europe's Silicon Valley tag Available at: http://phys.org/news/2016-11-lisbon-europe-silicon-valley-tag.html [Accessed 22 Nov. 2016].