According to Spain’s National Statistics Institute, the Spanish economy invested a total of €14.052 billion in research and development (R&D) in 2017, the equivalent of 1.2% of the country’s gross domestic product (GDP). Although this percentage is 6% higher than the previous year, Xavier Ferràs, Associate Professor in the Department of Operations, Innovation and Data Sciences at ESADE, observed: “The technological intensity of the economy – that is, R&D investment divided by GDP – increased by just one percentage point, specifically between 1.19% and 1.2%.” At the current rate, he added, “Spain would take 180 years to reach the 3% target set by the European Commission’s Europe 2020 strategy.” According to Prof. Ferràs, Spain’s technology deficit amounts to €21.078 billion. “Spain’s R&D spending is the same today as it was in 2006,” he noted. “As a percentage of GDP, Spain’s spending peaked in 2010, at 1.40%.” This figure falls far short of the percentages posted by the world’s most technologically sophisticated countries, including South Korea (4.3%), Israel (4.2%) and Japan (3.4%). “If you look at our neighbours, Germany invests 2.9% and France 2.3%,” he added. “The EU average is 2%.”

According to Prof. Ferràs, innovation is the foundation of national policies for promoting growth, competitiveness and prosperity. “A country’s technological intensity, measured in terms of R&D investment divided by GDP, is correlated with productivity, economic growth and per capita income,” he explained. “For this reason, with a view to overcoming the economic crisis, Germany increased its R&D spending by 20% ten years ago. And China, for example, is currently investing 50% more in R&D than a decade ago. At this level of spending, China’s R&D divided by GDP exceeds that of the European Union and makes it the world’s second-largest spender on R&D overall, after the United States.” He added: “With higher innovation levels, companies specialise and export more, create more jobs and obtain better profit margins, and generally speaking, a country becomes better equipped to sustain a welfare state.”

Eight ways to improve innovation policies

“In Spain, innovation policies have not been prioritised or assigned a stable budget,” explained Prof. Ferràs. “The Spanish government budget of 2017 allocated €4.635 billion for innovation – just 55% of what it was in 2009. Of the funds allocated, only 29.7% was actually spent, or the equivalent of 16.3% of what was budgeted in 2009.” In the opinion of Prof. Ferràs, these figures show that Spain is unwilling to make an adequate effort to invest in innovation. “Moreover, the money allocated doesn’t seem to translate into actual investment, possibly due to red tape or financial inefficiency.”

For Spain to close the technology gap and reach the R&D investment levels required by the European Commission, Prof. Ferràs recommends the following measures:

1. Create a National R&D and Competitiveness Plan with the aim of increasing the publicly funded R&D budget by €7 billion. This figure would be 2.5 times larger than the current R&D budget.
    
2. Coordinate industrial and research policies, prioritising funding for lines of research that help to make companies more competitive and create high-quality jobs, as well as business projects based on the creation of new scientific capacities in industrial settings.
    
3. Introduce an industrial research policy based on the Industry 4.0 concept that would lead to the creation of a new knowledge industry. The policy should include funding for grants that would have a knock-on effect by helping to finance high-risk technological business projects. This measure would mobilise €2 in private money for every €1 of public money spent.
    
4. Support technology centres by providing greater financial stability, critical mass and the investigative capacity to establish long-term, consortium-based lines of research with small and medium-sized enterprises. Ideally, the goal should be for these centres to specialise in enabling technologies, i.e. those which increase industrial competitiveness, for example, new materials, microelectronics, photonics, advanced manufacturing, digitalisation, aerospace, etc.
    
5. Use specific funding mechanisms to support university research groups that have demonstrated excellence in transferring  their technological knowhow to the wider society and economy.
    
6. Establish agile and high-risk funding circuits to cover early-stage business projects such as startups based on science and technology.
    
7. Deploy plans to accelerate the adoption of disruptive technologies such as artificial intelligence as well as the digital transformation of companies.
    
8. Strengthen regional cluster policies through the acceleration of processes for strategic and technological change by providing specific support for action plans, training plans and R&D investment plans.