Title: Spain’s Low Innovation Levels Highlighted as a Key Challenge for Economic Growth
Subtitle: Bank of Spain Report Reveals Per Capita Income Gap with the Eurozone
By [Author Name]
Madrid, Spain – In a recent report, the Bank of Spain has highlighted the pressing need for Spain to bridge the per capita income gap with the Economic and Monetary Union (EMU). According to the report, Spain’s per capita income currently lags 17% behind that of the EMU, with a decline of eight points since 2005 despite a four-point improvement since 1978.
The report identifies low productivity as a key factor contributing to this negative gap, attributing it to the reduced focus on innovation within the Spanish economy. Over the period from 2000 to 2021, Spain’s spending on research and development (R+D) only accounted for 1.2% of GDP, falling 0.8 percentage points below the euro area average. Encouraging innovation is seen as crucial for boosting income and overall well-being for Spanish society.
One alarming statistic disclosed in the report is the 45% drop in monitored innovation between 2010 and 2022, prompting concern among experts. This decline has persisted for over a decade, resulting in a loss of value and well-being. Addressing the issue, the study emphasizes the importance of innovation and its capacity to increase the value of markets by an additional 15%.
Curiously, the report points to leading supermarket chains, such as Mercadona and Lidl, as significant contributors to the insufficient distribution and support of innovative products. These chains reportedly reference less than 10% of the manufacturer brands’ innovative products launched in the market, limiting the reach of innovation to only 29% of distribution. As a result, manufacturers struggle to recoup their investments, discouraging further innovative efforts.
The implications for overall business competition and the Spanish economy are concerning. According to the study, manufacturer brands’ innovation contributes an additional 18% in value, while innovations from distribution companies fail to generate added value for the markets. In response to these findings, Promarca, an association representing leading brands in Spain, urges authorities to intervene to ensure fair competition in the consumer goods sector.
Promarca calls for concrete actions, such as the enforcement of the 2021 reform of the Food Chain Law, which seeks to safeguard innovation in the sector. Additionally, the association advocates for the implementation of tax incentives for distributors supporting innovation. These actions, Promarca argues, will correct harmful behaviors, promote growth in innovation, productivity, GDP, and ultimately improve per capita income, directly benefiting Spanish society as a whole.
Ignacio Larracoechea, President of Promarca, stresses the importance of addressing these issues urgently, emphasizing the critical role of the consumer goods sector in driving Spain’s economic progress. He calls on policymakers to prioritize innovation for sustainable growth and enhanced well-being within the country.
With Spain’s economy poised for recovery following the impact of the global pandemic, concerted efforts are now required to revitalize the innovation landscape and ensure the nation’s long-term prosperity.