Fundão – Friendly City of Investment and Innovation

The Municipality of Fundão, located in a low-density rural area of central Portugal, was severely impacted by decades of depopulation, economic stagnation, brain drain and lack of opportunities for young people. Recognising the urgency of reversing these trends, in 2012 the city launched the Fundão Innovation Plan, a comprehensive territorial strategy aimed at regenerating the local economy, attracting talent and investment, and promoting inclusive and sustainable development.

The overarching objective of the strategy is to transform Fundão into a smart, sustainable, and inclusive city, leveraging its rural identity and digital potential. The municipality adopted a place-based innovation approach, creating an integrated local ecosystem anchored in knowledge, entrepreneurship, and quality of life.

Key pillars of the strategy include the economic regeneration through support to start-ups, SMEs and tech companies; the digital transformation via training programmes and coding bootcamps; the social inclusion and talent attraction, with a strong focus on youth, migrants, women and the unemployed; the urban regeneration and environmental sustainability, by reusing abandoned public infrastructure and supporting circular economy practices; the multi-stakeholder governance, involving academia, civic organisations, businesses and public bodies through the Cova da Beira Living Lab, a certified member of the European Network of Living Labs (ENoLL).

Strong points of the strategy are the agile local governance with political continuity; a highly adaptable and modular implementation model; the holistic combination of digital, social and spatial innovation; the effective requalification of underused buildings to house innovation hubs; and the strong branding and communication (e.g. Move to Fundão initiative).

The strategy is implemented by a dedicated team within the Division of Innovation, Investment and Strategic Planning, supported by 14 staff, combining technical and managerial expertise. Enabling conditions included alignment with national digital and territorial cohesion policies, EU funding and strong political leadership.

Challenges faced included the attraction of skilled talent to a rural context; ensuring continuity and upscaling in the face of funding limitations; and the balance of the rapid grow of the tech sector with local identity preservation.

Fundão created over 1,000 ICT jobs and over 1,000 additional jobs in traditional sectors; supported over 250 investment projects generating over €150 million in investment; hosted residents from 70+ nationalities, and achieved positive migration balance for the first time in decades. The city also implemented a universal digital literacy programme in public schools and trained over 700 people via bootcamps. Bootcamps had a 97% employment success rate, and 700+ trainees were certified. In addition, more than 80 start-ups were accelerated, with three ranked among Portugal’s top 25. The city was awarded as one of the European Capitals of Inclusion and Diversity (2023) and won RegioStars 2018, European Enterprise Promotion Award.

The Fundão Innovation Plan offers a flexible and modular approach that can be tailored to the needs of other small or medium-sized cities, particularly those facing depopulation or economic decline. Key transferable elements include: reusing underutilised infrastructure, building innovation ecosystems, leveraging digital skills training, and ensuring participatory governance. Cities should prioritise multi-level partnerships, align with national/EU strategies (e.g., Territorial Agenda 2030), and combine economic, social and environmental dimensions. Investment in communication and branding is also crucial to attract talent and create a welcoming environment. Fundão’s success proves that small cities can lead in innovation and inclusion if empowered with the right tools and vision.

https://movetofundao.pt/