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Y Dreams has set up business on campus at Caparica university, near Lisbon. The company created by a professor and a small group of students in 2000 has become one of Portugal's biggest success stories. Today, 150 people work here, and about 40 others throughout the world – developing and selling new interactive technologies.

In the showroom, Executive director Karina Israel demonstrates a soap ad created in 2006. “The idea is to introduce virtual elements into the real world, she says. People can interact with the bubbles simply by waving their hands. It's as if the public were part of the ad, when in fact their image is being projected onto the screen, inside the ad. It really is like a blend of real and virtual.”

In Portugal, high tech is on a roll. But the sector is also facing a brain drain of young Portuguese scientists. Y Dreams has found the answer: embedding itself in the university science faculty and luring in young graduates with the prospect of growth. “We have two types of remuneration here”, explains Y Dreams President Antonio Camara. “We have salaries, but we also offer stock options in the company. We're not yet competitive in terms of salary in comparison with the United States, France or the United Kingdom. But the business is picking up in value and it's going to be floated on the stock market soon. One day, people who work here will be earning the same as those who've chosen to emigrate.”

Inspired by some of the Silicon Valley business models, the offices themselves are also designed to attract young people. Here, the average age among salaried workers is 31. Ping pong, video games: employees here can play and have a rest at work. “The main thing is to get everyone involved, and also to attract consistently higher performing people, says vice-president Edmundo Nobre. One of our aims is to bring in people who are better than we are. To get that off the ground, that capacity for attracting fresh talent, we need to create a good environment.”

Y Labs, the company's laboratory, is one of the most important departments. Whether they're designers or scientists, employees here are racking their brains for the ideas of the future. "We're currently thinking of using chemistry and material science to build the new interactivity of the future, explains R&D director Ivan Franco. Just imagine that your bottle of water can be interactive".

Y Dreams is about to move into a different league. Turnover for 2008 is estimated at 12 million euros. Next year, it is expected to be 30 million.