AbstractThe Portuguese R&D system has a sectoral division between scientific and technological research activities and an absence of a science budget. Lack of manpower has caused a high degree of dependence on imported technology which has discouraged autonomous developments. The avoidance of risk has been the major factor in the traditional industrial culture.The revolution of 1974 had a strong impact at the societal, political, organisational and cultural levels. Joining the EEC is an important cornerstone in the modernisation process. Continued technology dependence does not help in bridging the gap between the national economy and more developed ones. A series of issues that must be addressed at once are hindering the process of development. The challenge is big, but the rewards are immense.