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Country Profile – Spain
Spain took over the presidency of the EU on 1 January 2010, for half a year. The Spanish Presidency has prioritised three issues in R&D: integration, involvement and inclusion.
Integration refers to the importance of integrating R&D policies with the EU's strategy for 2020.
Involvement means that Spain seeks to ensure that all regional, national or European instruments supporting R&D and innovation address the so called ‘grand challenges' such as climate change, the search for new sources of energy, ageing and disease, and globalisation.
Inclusion focuses on the role science and innovation can play in promoting social cohesion and tackling poverty and exclusion.
The 18-month work programme of Spain, Belgium and Hungary (the current and the next two countries to hold the EU presidency) foresees a mid-term review of FP7 and the implementation of joint programming. The presidencies want to emphasise the importance of the regional dimension of research and highlight the importance of making research careers more attractive.
However, Spain’s economy has been hard-hit by the global recession. The country’s gross domestic product (GDP) per capita had been growing faster than the euro-zone average for more than a decade, reaching €24,643 in 2007, but shrank 3.8% in 2008. Spain's deficit has also grown quickly, from 3.8% of GDP in 2008 to more than 10% of GDP in 2009. Unemployment rose from 11% in 2008 to almost 20% in 2009, and is expected to reach 22% in 2010.
The reversal in Spain's economic growth is due to a decline in the construction sector, falling consumer spending and slumping exports. Government efforts to boost the economy through stimulus spending, tax breaks and loan guarantees have not cut unemployment. But Spain's banking sector has been relatively insulated from the global financial crisis, due in part to the conservative oversight provided by the Bank of Spain.
Foreign direct investment
Spain is the seventh most attractive country in the world for investment. According to the Bank of Spain, although the country received €44.7bn of FDI in 2008, 11% less than in 2007, the decrease is less than the European Union average.
FDI in Spain has been growing since the 1980s, in part because of the tax treatment of Foreign Securities Holding Companies (FSHC).
Spain is also a springboard to access markets such as Latin America, the Middle East and Africa. In 2008 the most important sectors for FDI were: trade and commerce sector (47% of total); production and distribution of electricity, gas and water (27.3%); finance (9.4%) and real estate (6.8%).
R&D system in Spain
Spain innovation system has two problems: it is too heavily oriented towards basic research, and it is under-funded. Spain’s R&D intensity (the proportion of GDP spent on R&D) grew from 0.41% in 1980 to 1.27% in 2007, but this compares to the EU25 average of 1.84%. In 2007 the country spent €14.7bn on R&D. The most important actors in the research system are the public research organisations (which spent €2.67bn on R&D in 2008) and higher education institutions (which spent €3.9bn). Together they carried out 89% of the basic R&D in Spain. The business sector accounts for 67% of all R&D, with most of the funds going to applied research (33%) and technological development (45%) and only 3.2% to basic R&D.
The Spanish innovation system is based on the Science Law of 1986. The Law defined the Spanish science and technology system and launched the National Plans as programming instruments. The current (sixth) National Plan defines the medium-term objectives and priorities for research, development and innovation between 2008 and 2011.
The government helps innovation projects with money and tax breaks. Grants are available to partially cover the costs of a project. There are also tax incentives, such as fee deductions, and reductions in the tax base.
Since 2008 research policy in Spain has been concentrated in the Ministry of Science and Innovation.
The government’s Inter-ministerial Commission on Science and Technology (CICYT) also has a role in policy development for the national R&D plan, as well as the supervision and coordination of the innovation system. The Centre for Industrial Technology Development (CDTI) is meant to increase the technological level of Spanish companies by developing the assessment and funding of R&D projects, promoting participation in international technological cooperation schemes and supporting the creation and consolidation of technology-based companies.
Invest in Spain helps foreign investors to set up business in Spain and operates a regional network giving tax breaks and incentives to attract FDI. Spain offers investment opportunities in sectors such as ICT; renewable energy; health sciences; pharmaceuticals and biotechnology; environment and water treatment; aeronautics; and logistics.
Regional Development Agencies serve particular areas.
The COTEC Business Foundation provides indicators and an annual report on Spain’s innovation environment.
Spain participates in two cross-border initiatives: Spain-France-Andorra and Spain-Portugal and the South West Europe and Mediterranean Transnational Programmes. The managing authority is the Ministry for Finance and Economy.
There are other instruments for financing regional aims such as the Regional Incentives and the Inter-territorial Compensation Funds.
Specific R&D grants can be obtained under the EU 7th Framework Programme. To encourage participation in FP7, Spain has initiated the Euroingenio programme. Spain also participates in many multilateral cooperation projects such as the EUREKA programme and Iberoeka programme.
Spain’s intellectual resources
Spain has 122 higher educational institutes (HEI) of which 49 are public and 23 private universities , with 50 other types of centre. In 2006 these institutes spent 28% (€3.266m) of all Spanish R&D&I expenditure.
The Rector's Conference for Public and Private Universities promotes activities, fosters inter-university cooperation information interchange and makes studies and reports.
Spain has 401 public research institutes, which account for 16.7% of total Spanish R&D expenditure. About 60% of this expenditure is incurred by state-owned institutes; 82% of the public research institutes’ budget comes from the government, with The rest is coming from contract research and public tenders.
The biggest state-owned institute is the Spanish National Research Council, which employs 12,494. Its main research fields include: biology and biomedicine (23%); natural resources (15%); physical sciences and technology (12%); materials sciences and technology (11%); agrarian sciences (10%); chemistry sciences and technology (10%).
Two other important institutions are the Health Institute of the Carlos III University and the Spanish Institute for Mining and Geology which spend each around 15 to 16% of the direct government funds for R&D.
The 278 local and regional public research institutes (with 28% of the budget) are engaged in local economic interests and in traditional sectors such as agriculture, fishing, and textiles.
Private firms in Spain accounted for €7.45bn of Spanish R&D expenditures and financed €5.5bn of this: 54% was carried out by SMEs and 46% by large firms. 44% of the funds were used for technological development while 33% as applied R&D and 3.3% as basic research. The largest 21 firms in Spain spent €1340m on R&D in 2007, which represents almost 18% of all private R&D expenditures and 10% of total R&D expenditures.
Technology Centres are non-profit private research organisations focused on generating technological knowledge and facilitating its exploitation. They have a regional orientation; almost 40% are in the Basque Country and Valencia. They had a €520m budget for R&D in 2007.