Greece and Poland exceed Spain's investment in R&D for first time

Innovation spending set records last year, but the gap with the European Union widens

For five consecutive years investment in R&D in Spain has grown. In 2018 it recovered pre-crisis levels and in 2019 the figure reached an all-time high: €15,572m. Even so, the health of innovation in Spain hides another reality: the gap with the rest of Europe is significant, even in comparison with countries with much lower income per capita. In 2019 Greece and Poland exceeded Spain's investment effort for the first time in terms of the percentage of GDP allocated to innovation. This is highlighted in the analysis published by the Cotec Foundation, which also highlights how Portugal has widened the advantage in investment levels over Spain.

Last year, R&D expenditure accounted for 1.25% of Spanish GDP, a figure which, according to Esade professor of operations and innovation Xavier Ferràs, "is still far below the European average", although the annual volume invested in innovation was a record. "The maximum investment effort in R&D by the Spanish economy was achieved in 2010 (1.35% of GDP). The Spanish economy would have to invest a total of €37,372m at both the private and public levels to achieve the European objective of 3%", defends the academic. This is why he estimates there is a €21.8bn "technological deficit" which Spain would have to reduce to resemble the major European economies.

Despite having increased investment in R&D by €626m last year, the rate of increase has begun to slow down. In 2017 and 2018 the year-on-year growth rate had been 6.1% and 6.3%, respectively, but by 2019 it had fallen to 4.2%. This slowdown is even more evident in the case of private investment, which has gone from growing at around 8% in the last two years to halving its increase.

However, the study also points out that one of the culprits of this trend is the fall in public investment in innovation projects. While in Spain between 2010 and 2019 this indicator sank by 5.4%, the situation in Europe was much more dynamic, with a 25% increase. In fact, Cotec assures that the State is one of the only five European countries which have not yet recovered the levels of public investment prior to the 2008 crisis.

It was precisely the collapse of the financial system that triggered the widening of the innovation gap between Spain and other EU countries after the first decade of the 2000's, when meeting EU goals seemed less utopian. In 2008 this gap was reduced to a minimum of 0.49 points: the EU average was 1.84% of GDP spent on R&D and Spain was then spending 1.35%. Now this gap has almost doubled to 0.88 points.

Hope for European funds

The current context, stresses the Cotec report, contrasts with the ambition of the various strategic plans approved by the Spanish government to improve R&D data. One of these plans aimed to reach 2% of GDP by 2020, while the figure still stands at 1.2%. On the other hand, the objective of the Spanish Strategy for Science, Technology and Innovation is to reach 2.12% between 2021 and 2027.

"In Spain we are used to working with very little and carrying out good scientific production", points out Julià Manzanas, president of the Knowledge and Innovation Commission of the Economists Association of Catalonia. For Manzanas, the reality of Spanish innovation depends on the money invested in it, but also on the results generated by the different research centers and projects. "We are competitive when it comes to presenting proposals, for example, with the European Commission's Horizon 2020", he stresses.

In fact, the academic is optimistic about the funds for the EU executive's post-Covid recovery plan and the increase in the budget planned for the Spanish Ministry of Science. "Now private investment largely supports R&D, but this will be more vulnerable to the Covid-19 crisis because it represents an effort for companies at a time of weakness," said Manzanas.

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