Spain and the United States - Real Instituto Elcano

LOOKING AHEAD 131
Exhibit 7.7 Employment, Productivity and R&D Spending
More worryingly, Spain’s declining productivity denotes the lack of
technological progress, something that hinders the economy’s overall
efficiency and its long-term growth capacity. This can be seen from the small
rise in total factor productivity (TFP, an approximate indicator of the growth in
technological progress), which increased in manufacturing by an average of
only 0.3% a year between 1996 and 2002, compared with 2.5% in 1980-1995,
according to the Bank of Spain, which noted that this decline is “somewhat
more than a temporary effect linked to an episode of vigorous job creation or
of changes in the sectoral composition of employment.” Other labour market
analysts have reached the same conclusion. 7 And this is occurring at a time
when foreign direct investment is slowing considerably (FDI having been one
of the main channels for the diffusion of technological advances), and in which
the weight of high-technology imports remains very limited, despite the surge
in import penetration.
Among the EU-15 countries, Spain is one of the main laggards in meeting
the objectives of the Lisbon Agenda launched in 2000 to make the EU by 2010
“the most dynamic and competitive knowledge-based economy in the world
capable of sustainable economic growth with more and better jobs” (see
Exhibit 7.7). Spain’s spending on R&D represents, for example, 1.1% of GDP,
less than half the 2.7% spent by the United States. There is considerable
discontent among Spain’s scientific community, many of whose best brains
7. See, for example, “Perfiles TIC como agentes tecnológicos en la empresa. ¿Qué tipo de profesional
necesita la empresa para gestionar las Tecnologías de la Información?” by Valeriano Muñoz, Summer Courses of
the Complutense University, El Escorial, 2003. This document expressed concern at the slower pace of
productivity growth, which was due not only to the very strong creation of jobs.