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Research & Innovation in Spain 2016

Author

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  • Ana Fernandez-Zubieta

    ()

  • Irene Ramos-Vielba

    ()

Abstract

The economic situation in Spain continued to improve in 2015, with growth in gross domestic product (GDP) of 3.2% - well above the EU-28 average of 2.2% (Eurostat-2016). The budget deficit as a percentage of GDP reduced over the year by 0.9%, reaching a figure of 5.1%. However, government debt increased to 99.8% of GDP. The unemployment rate has improved considerably over the last year (by 9.8%), but remains among the highest in the EU-28. Spanish business relies heavily on small and medium enterprises (SMEs), particularly micro-companies of less than ten employees (EC, 2016a). Although the share of SMEs in Spain is similar to other EU Member States (MS), the role of SMEs in employment creation and value added is high in European terms (EC, 2016a). There is a significant productivity gap between large enterprises and micro-companies in Spain. Additionally, Spanish firms show a growth rate below the European average (EC, 2016a). Entrepreneurship performance indicators show that Spain is increasing its business creation rate, but it is suffering from increasing firm destruction and decreasing firm survival rates (see section 1.1.2). Self-employment figures have remained quite stable over the crisis period, representing 17.7% of total employment in 2008 and 17.4% in 2015 (OECD, 2016a). However, lack of access to the labour market underlies the increasing figures of entrepreneurship ‘out of need’ (GEM, 2014). Research and innovation (R&I) investment figures remain far from pre-crisis period levels, in both total and relative terms (see section 2). Gross Expenditure on Research and Development (GERD) has declined by 9.8% between 2010 and 2015, reaching a figure of EUR 13,158 million (similar to the levels of 2007). In relative terms, R&D investments declined up to 1.22% of GDP, returning to 2006 levels. This decline in R&D investments indicates that it will be very difficult for Spain to meet the GERD target of 2% of GDP by 2020, which was set in the Spanish Strategy for Science, Technology and Innovation (EECTI) (2013–2020). GERD is also far from the targets set by the Spanish State Plan of Scientific and Technical Research and Innovation (PECTI) (2013–2016) (1.33% for 2013 and 1.48% for 2016). After a slight increase in 2014, the public budget for R&I declined again in 2015 by 6.6% and remains much lower than in the pre-crisis period. Government budget appropriations or outlays on R&D (GBAORD) reached a total figure of EUR 5,388 million in 2015, lower than in 2003 (EUR 5,742). The declining trend of the public budget for R&D (Presupuestos Generales del Estado – PGE-46) hashalted, but was greatly reduced over the crisis period: from EUR 9,673 million in 2009 to EUR 6,425 million in 2016 (ICONO-Ministry of Finance -MINHAP, 2016). In 2016, the R&I budget represented 1.47% of the total budget, a figure that is lower than for 2001 (1.49%) and far from the maximum of of 2.7% achieved in 2008 (ICONO-MINHAP, 2016). Not surprisingly, the role of government in R&D investment is declining and slipping further behind the EU-28 average. There has also been a considerable reduction in the rate of improvement of the main output indicator of the academic sector (scientific publications), the strongest innovation performance indicator of Spain (EC, 2016b). The annual growth rate of international scientific co-publications per million population has dropped form 12% in 2011 to 4.6% in 2015, decreasing the opportunities of the academic sector to become more competitive in international terms. In fact, growth in Spanish participation in world scientific production started to decline in 2013, slowinging from 3.24% in 2012 to 3.21% in 2013 (FECYT, 2016a). Reduction of investment in R&D by the business sector has continued over the post-crisis period (see section 2.3). Business R&D expenditure (BERD) has been declining since 2008, falling behind the EU-28 average. BERD represented 0.64% of GDP in 2015, less than the figure of 0.74% in 2008 and far from the EU-28 average (1.3% in 2015). Whilst the business sector remains the main source of R&D funds (0.57% of GDP in 2014), this is well below from the EU-28 average (1.13% in 2014). The combination of increasing labour productivity of Spain and high unemployment levels indicates that competitive gains are relatively inefficient. The lack of R&I investments explain the overall declining innovation performance of the Spanish R&I system (EC, 2016 b) and could partially explain this inefficient economic growth. In order to identify the most important challenges of the Spanish R&D system it is necessary to take into account both the already existing long-term challenges of the R&I system (OECD, 2006; EC, 2011; ERAC, 2014) and the effect of the economic crisis on the system. The main weaknesses and opportunities with regard to increasing the level of performance of the Spanish R&I system, as identified by Fernández-Zubieta and colleagues (2017).

Suggested Citation

  • Ana Fernandez-Zubieta & Irene Ramos-Vielba, 2018. "Research & Innovation in Spain 2016," INGENIO (CSIC-UPV) Working Paper Series 201702, INGENIO (CSIC-UPV), revised 08 Jan 2020.
  • Handle: RePEc:ing:wpaper:201702
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    References listed on IDEAS

    as
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    JEL classification:

    • P1 - Economic Systems - - Capitalist Systems
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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