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Investment in R D continues to lose weight in Spain despite recovery

The INE's data certify that investment in research and development goes back for the sixth consecutive year in relation to GDP, i.e., it reduces its size in the productive structure

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Investment in R  D continues to lose weight in Spain despite recovery

The whole of Spanish economy was spent last year 13,307,000,000 euros in R D, 88 million more than in preceding year. The good news is that private sector raised its R D investment by 3%. However, it is a slightly lower-than-GDP growth. That is, companies improve but do not even get to same level of activity with what is still losing participation in economy for eighth consecutive year. That yes, it corrects very slightly anor chronic problem in this area: international canons of advanced countries say that private sector should agglutinate around two thirds of investment in R D. In Spain it only means half, and that is improved but very little because it decreases spending in public sector.

Although private sector has increased money put in this rubric, part of this increase has been neutralized by a fall of 2.7% in public administration and 1.5% in higher education. Austerity continues to prevail in one of most crisis-affected budget games. With figures from budgets actually liquidated, between 2009 and 2015 state and its agencies cut this game in half. And se INE data point out that in 2016 a new adjustment was registered. The reason is that in middle of last year state had to impose a closing of expenditures in order to meet deficit objectives required by Brussels. And that has left many R D games without running.

As a result, recovery of R D is lukewarm, without public impulse and at a very long distance from what happens in Europe. While EU spends 27.4% more than in 2009, in Spain still disburses 9.1% less, according to data from foundation Cotec extracted from Eurostat. The Spanish delay is manifest. Toger with Portugal and Finland, Spain composes small group of EU countries where R D levels have not been restored prior to Great Recession. In European context, Spain has lost three positions with crisis and is ranked 17 of 28 member states. Countries such as Estonia, Slovenia, Hungary, Czech Republic or Portugal have higher levels. "We continue to perpetuate a high risk production model that leaves us in tail of Europe," says Jorge Barrero, CEO of Cotec.

An explosive cocktail of too small companies, a predominance of low-skilled sectors, a little-linked university with companies in R D and a bank that does not usually finance projects based on intangible knowledge make it very difficult to improve Of R D.

Nor have successive governments turned as y should. Their plans to promote it do not finish working. A tax aid scheme has been developed for companies that are among most generous in world according to an IMF study. However, se incentives benefit mostly big ones so y already do anyway. With regard to public expenditure, it is increasingly trying to promote appropriations rar than direct subsidies. And neir universities nor public institutions know or have ability to contract credit. So a lot of those helps don't take advantage.

And worst thing is that Spain is at tail of region that is lagging behind. According to latest study by OECD, US, China, Korea, or Japan are leaving Europe far behind in terms of technology.


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