From Manufacturing Decline to the Rise of Consultancy

Abstract

Since the creation of Quadros de Pessoal (QP) in 1981, a longitudinal employer-employee dataset encompassing all Portuguese firms, four different industrial classification methodologies have been in place. These changes have hindered the ability to conduct long-term inter-industry studies on firm dynamics and structural change. This paper presents a framework for transforming the QP into a dataset with time-consistent two-digit industry codes and examines shifts in the firm-level growth rate distribution, net job creation and employment composition across sectors. Our industry-consistent trends confirm the contraction of the manufacturing sector, which coincided with the expansion of the services sector. While the increased business dynamism and net job creation in activities arising from the ICT revolution played a critical role, the technological paradigm shift in Portugal appears to be predominantly reflected in the vertical disintegration of firms and the subsequent substantial growth of administrative support services.

Keywords

• Structural Change
• Deindustrialisation
• Firm Dynamics
• Industry Classification
• Longitudinal Analysis