Spain and the United States - Real Instituto Elcano

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SPAIN AND THE UNITED STATES
feel they have no alternative but to seek employment abroad. The government
is trying to attract as many of them back as it can.
The government announced a very ambitious five-year plan in June 2005,
Ingenio 2010, that aims to almost double spending on R&D to 2% of GDP by
2010, and so put behind it the famous remark of the philosopher Miguel de
Unamuno (1864-1936) who, when asked about what Spain could do to
strengthen its contribution to scientific progress, said “let others invent.” But
this level, assuming it is achieved, would still only be the current average for
the EU-25 and far from the 3% target set under the Lisbon Agenda. Previous
R&D policies have been erratic, to say the least.
Infrastructure, another important area for an economy’s competitiveness,
has been transformed beyond recognition in the past 20 years in Spain, largely
thanks to EU funds. However, the pace of improvement will lose momentum
from 2007 unless the government (via higher taxes) or the private sector invest
more money. Spain, currently the largest net recipient of EU funds in absolute
terms, will receive considerably fewer funds, and by the end of the next
budgetary period (2013) it will almost certainly be a net contributor. The
government’s infrastructure plan for 2005-20 envisages the building of
6,000km of new roads and 9,000km of high-speed rail track at a cost of 249
billion – probably an unrealistic target.
Spain also needs an industrial policy that focuses on the areas it wants to
develop, and one that is well coordinated with the country’s regions and
discourages them from competing unnecessarily with one another.
Some of these concerns are reflected in the 2005 Barometer of US
Business in Spain, which showed a significant rise in the number of companies
worried about the Spanish economy (14% vs none in 2004). 8 The survey
detected less optimism and a slowdown in investment projects, pointing to a
possible change of trend in the future. The results, however, have to be
interpreted cautiously, as the number of companies that took part in the survey
during the first quarter of the year was not very large. Only 14% of the
companies answered the questionnaire (the proportion for companies
employing more than 500 workers was higher at 21.5%).
The proportion of companies that said they were completely satisfied
dropped from 24% in 2004 to 15% in 2005. Those with a pessimistic view rose
from 4% to 14%.
Close to half (49%) the companies said they made investments in 2004, of
which 79% was to increase their production capacity. The increases in capacity,
however, were modest: 40% of them were to boost capacity by 10% and 36%
8. El barómetro de los negocios norteamericanos en España, perspectivas para 2005, prepared by Joan
Manuel Batista i Foguet and Pere Puig i Bastard (US Chamber of Commerce in Spain and ESADE).