Change & innovation Innovation in Europe

Innovation in Spain continues to decline

Results of the European Innovation Scoreboard (EIS) 2016.

Spain is ranked at 20 of the 28 members of the EU in the last index of innovation performance in Europe and walks away, year after year, to reach the European average. Innovation in Spain continues to decline.

Despite the official propaganda, often reinforced by the media, innovation in Spain continues its fall and it seems that not even an awareness of it is encouraged.spain-2008-15

It is an important problem for the future, and to solve it, the first thing needed is made aware of this reality. On the contrary, an optimistic view is presented, when isolated achievements in very specific fields and organizations, are highlighted whenever there is occasion.

But reality set indicates that, year after year, innovation in Spain, not only show no progress, but it’s falling relatively in relation to neighboring countries.

According to the latest EIS 2016, Spain stood back with an index of 0.361, a fall of 6.7% over the previous year, 44.3% below the European average (0.521) and 95, 8% below the leaders (0.704).

spain-2008-15-relative-ue

These figures are lower than those achieved until 2008, and the decline has been continuous since 2013. Spain gap with the EU has increased over time, the relative level has fallen from 77% in 2008 to 69% today.

The results by country differs little from previous years in terms of the considered innovation leaders, and strongly innovators.

eis-2016-by-countries-ue

In most of the 25 indicators, Spain is below the EU average. Only approaches average in “research systems”, but it is because, as mentioned last years, the sharp increases in “international scientific co-publications”. Many university publications, but few patents. In relative terms, the worst indicator is the foreign income by patents and licenses, although it has increased by 13% over the last 8 years. In the last 8 years, the Spanish index has grown in Human Resources dimension (+ 3.8%) and intellectual capital (+1.4); but endemically unfavorable indicators continue to decline, financing innovation (-5.6%), investment companies (-4.7%), entrepreneurs and linkages (-0.2%), innovators (-3.7%) and the worst indicator is venture capital, (-11%).

In the following graph, relative values of Spain in relation to the EU average (= 100) of the 25 indicators and their evolution over the last 8 years, are presented.spain-25-indicators

Leaders in innovation.

The performance of innovation leaders in the EU was improving until about two years ago. During the past two years, the total EU index fell by 1.3 percentage points. For Finland, the index began to decline in 2010, for Denmark and Germany in 2012, Sweden in 2013, and for the Netherlands in 2014. innovation-global-leadersSweden has remained as the most innovative member state throughout the period, but Denmark has reduced a significant part of their gap with Sweden. The highest growth is shown by the Netherlands. Dutch innovation index has grown at an average annual rate from 2008 to 2015 of 2.0%, followed by Denmark (1.7%), Germany (0.2%), Sweden (0.1%) and Finland has decreased at an average annual rate of -0.3%.
However, the whole EU position has fallen compared to globally innovative countries.

South Korea, US and Japan are above the overall European innovation index. See chart: The greatest growth is for Korea by almost twice the rate of the US. Switzerland remains the most innovative country in Europe.

The following chart includes indexes by countries including non-EU members. eis-2016-total-europe

In this year they have been included in the comparison Israel and Ukraine. In the same report, information by countries is complemented with some regions data. In general, the most innovative regions are in highly innovative countries, ie Sweden, Denmark, Germany, Netherlands, Finland, France and the United Kingdom. There are some exceptions, regions that have become engines of innovation in countries that are not. This is the case of the Basque Country in Spain, described as “strong innovator”. Basque results highlight in Innovative SME’s collaborating with others, employment in fast-growing innovative companies and population with higher education.

What to learn from other countries?

There are many (almost all) countries, to which Spain could take a look and take note of how they are doing.

Although this must be done with willingness to change and progress.
Sweden, the country in the lead in the overall index, is also the most striking quality of his academic research, closely followed by the United Kingdom and the Netherlands. They all have a system of international cooperation in the innovation that fosters collaboration and contact with scientists from other countries, and the quality of its research results is considered very high.
Germany, meanwhile, leads the investment in R & D by companies and private funds, followed by Estonia, Austria and Finland. In these countries, both companies invest in innovation-related R & D as unrelated, such as purchasing equipment and advanced machinery. In other countries, such as Belgium, Denmark or the Netherlands, companies are encouraged to combine own innovation projects and joint projects with other companies or public sector. In addition, systems of public R & D are oriented towards resolving the problems and needs of companies. Finally, in Ireland the percentage of SME’s involved in innovation activities is very high: they are more innovators in products and produce more jobs.
But while there is no willingness to change and progress, it will not be possible to eliminate the Spanish endemic and structural barriers that we see as the root causes of this situation.

Root causes

In Spain, the barriers to innovation are still increasing. And the main causes of this situation are the political, economic, social, cultural and business environment of the Spanish state. See:[1]
The detailed analysis of the 25 indicators and their root causes, indicates the following, with no solutions until now:

  1. The private company does not invest in innovation. Public investment is out of focus in productive activity and generally disconnected from real business and real economic interests.
  2. The prevailing business model is not a competitive business model emerged innovative and forward-participation in the global arena initiatives. On the contrary, many of the dominant companies have emerged and operate a model of proximity to political power, either by its origin of old public monopolies, or based on the concessions and agreements with public administrations.
  3. The education system is a barrier that puts human resources below the countries of the European environment. It is not results-oriented and innovation. At the University there has been an increase in the number of communications and publications, but are not reflected in patent licensing or exploitation or Community design. On the other hand, the employment situation reinforces a growing tendency for more educated people should seek employment abroad.
  4. The economic model is outdated and remains unchanged. Growth is sought with the same paradigm as in the past: A possible recovery of construction, price competition, lower personnel costs, comprehensive use of resources, environmental damage, productions stages of maturity or decline, speculation etc.
  5. The financial structures, as always, are closed to innovation and industrial development in general. There is a sharp decline in funding for innovation. It is evident that there is no will to modernize financial structures for support of the productive economy. The existence of venture capital for innovative initiatives not only not improved, but has fallen sharply. It tends to indebtedness and little capital formation, both tangible and intangible.
  6. The medium and small enterprises suffer particularly from the foregoing. Endemically lack the support and funding, although much of this talk. On the other hand, SMEs are still not sufficiently connected, open to the outside and with clear and distinct business models. They do not invest in innovation, or separately or forming alliances or partnerships.
  7. Intellectual capital is not valued, or systems management or organization. There is a lack of value of intangible assets in general, probably due to the business model short-term oriented and price competition. The number of patents, trademarks, systems or ‘Know-how in industrial design, etc. It is considerably lower than our environment. culture of openness to international markets, partnerships or alliances, and in many cases, lack of customer orientation abroad. The rate of customer collaborations with new innovation projects is significantly lower than the European.
  8. An endemic lack of connection between science / technology and business remains. Few public, private and mixed institutions, associations, groups (clusters) truly act as promoters of innovation, and as bridges between research and technology base and the company.

In short, a scenario that continues to worsen.

[1] Spain increased barriers to innovation

Barriers in the environment: The case of Spain

España retrocede: cada vez más lejos de Europa en innovación

Author

Francesc Guell is the owner of this site. He was CEO and director of international companies in specialty chemicals and pharmaceuticals. The last 12 years was associated with international consulting groups, providing advice and support to businesses on topics such as innovation and agile innovation processes, operational excellence, knowledge management, change management, strategy and integrated business management. Currently creates and presents courses and workshops on these topics. He graduated as a chemical engineer, postgraduate from ESADE Business School in Business Administration and Master in Knowledge Management. He participated in numerous programs, seminars and ESADE, IESE, EADA, APD and MCE (Management Centre Europe). He is author of articles, presentations and courses on innovation in strategic management, integrated business models, knowledge management, performance measurement, change management and excellence in business processes. See more in: Professional Profile