According to the data just released by Spain’s National Statistics Institute (INE in its Spanish initials), the Spanish economy invested 14.946 billion euros in innovation and development (R&D) in 2018, 1.24% of its Gross Domestic Product (GDP), and an increase of 6.3% over the previous year. However, for Xavier Ferràs, Professor of Operations, Innovation and Data Sciences at Esade, this investment "is still well below the European average" and explains that "the most technologically advanced countries have rates of 4.6%, such as Israel; 4.5%, like South Korea; or 3.3%, like Sweden and Switzerland”. “Denmark invests 3.1%; Germany, 3%, and France 2.2%, while the average for the European Union stands at 2% and those of the United States and China, at 2.8% and 2.1%, respectively,” he adds.

Ferràs recalls that the 'Europe 2020' strategy was aimed at reaching 3%, to convert Europe into the most competitive knowledge-based economy in the world. However, in his opinion, "Spain is still far from meeting those objectives (...) The maximum effort in R&D by the Spanish economy was reached in 2010, with 1.35% of GDP (...) The technological deficit to reach the European objectives today stands at 21.213 billion euros. This is the additional investment that the Spanish economy should make, both publicly and privately, to reach 3%,” he explains.

“Spain's current level of investment in innovation and development in relation to the Gross Domestic Product (R&D/GDP) is the same as 2007, ” continues the Professor of Esade, who sets two economies as good examples to follow, the German and the Chinese. “Germany has emerged from the crisis with a 25% greater effort than ten years ago, thanks to its 'Industry 4.0' model, while China, which is also in the midst of the technological arms race in this area, invests 50% more in R&D than a decade ago”. Thanks to this effort, “it surpasses the European Union in investment in R&D/GDP - and is now the second largest economy in the world in gross R&D/GDP investment, after the United States, and stands out in strategic fields such as artificial intelligence or semiconductors”.

How to overcome the technological deficit

“In Spain, innovation policies have not enjoyed priority, nor stable budgets, nor efficient programmes,” says Xavier Ferràs, and also stresses that of the 7.003 billion euros allotted in 2018 budget, “only 3.278 billion euros was invested, just 46.8% (...) A budget already 16% lower than that of a decade ago, of which only a little less than half is executed, possibly due to excessive bureaucratic complexity and financial inefficiency of its instruments," says the Esade professor.

Ferràs also emphasizes that private investments in R&D, especially those of greater complexity and risk, "depend on the capacity of public policies to encourage and complement them."

For this reason, to overcome the technological deficit and achieve the investment in R&D required by the European Commission, he recommends:

1. Establishing a National R&D and Competitiveness Plan, with a minimum budget of 12 billion euros deployed in effective and easily executable programs, aimed at inhibiting existing R&D “market failure” (the tendency of the market to invest in R&D below what is socially and economically optimal).

2. Coordinating research and industry policies, prioritizing funding to research lines that contribute both to improving business competitiveness and the generation of quality employment and that business projects are sustained in the generation of new scientific capabilities in industrial environments.

3. Deploying an industrial research policy aimed at building a new knowledge industry (based on the Industry 4.0 model), providing subsidies as a multiplying effect to finance projects of very high business technological risk, with the aim of mobilising two private euros for every public euro invested.

4. Bolstering technology centres, providing them with the financial stability, critical mass and research capacity to establish lines of long-term, consortium-based research with SMEs. It is necessary to specialise these centres in enabler technologies, i.e. those that support industrial competitiveness: new materials, microelectronics, photonics, advanced manufacturing, digitalisation and aerospace, amongst others.

5. Promoting through specific financing tools those university research groups with proven excellence in technological transfer processes to the socio-economic fabric.

6. Establishing agile and high-risk financial circuits to cover the early stages of deep tech entrepreneurial projects, those with a scientific and technological basis.  

7. Deploying plans for the accelerated adoption of disruptive technologies, such as artificial intelligence, and the digital transformation of companies.

8. Strengthening policies for regional clusters, accelerating their processes of strategic and technological change through specific support for their action plans, training, and investment in R&D. Developing new high-tech clusters around technology and research centres.