Innovation barriers Innovation in Europe

Spain increased barriers to innovation

Results IUS 2015, Innovation Union Scoreboard. [1]

In the 2015 report, Spain is placed with an index of 0.385, 30.6% below the European average (0.555) and 47.8% below the leaders (0.738)

If companies in this environment want to innovate, they envisage still more difficulties.

If we agree that barriers to innovation come from individuals, from the own organization and the environment, in the case of Spain, this environment is not eliminating external barriers but on the contrary, are increasing.

In this environment, there are still some innovative and new start up’s. Some are internationally recognized, but there are few. Obviously, they are the exception and this is an additional effort, much more than in other environments.

Those that succeed have created “a microclimate of differentiation” from the beginning and an “innovation culture” which can only be achieved with accumulation of experiences, successes and failures.[2]

Above all, opening to the outside: From the point of view of alliances and partnerships, as well as knowledge, staff education and global vision, i.e. markets and segments worldwide.[3]

In November 2014, we published an article on this website, under the title of “Barriers to innovation.” [4]

There was a section on “External barriers: the case of Spain”. I would now, a year later, report on the evolution of results.

From the outset, we can advance that the situation has worsened.

IUS 2015 1

In the graph we can see that Spain is among the countries that has most regressed in the overall index, after Romania, Cyprus, Estonia and Greece. For the EU at large innovation performance has not changed and for 15 Member States, it has improved.

IUS 2015 3

IUS 2015 2

At global level, South Korea and the US defend their positions as top international innovators. Together with Japan, these countries keep a performance lead over the EU. While the gap between the EU and both the US and Japan is decreasing, it widens with South Korea.

These are the comments of the report on Spain:

IUS 2015 4

Spain is considered as moderate innovator. Innovation performance was improving steadily up until 2012, after which the innovation index has been in decline, in 2014 performance is significantly at a lower level than in 2007. Together with Romania, Spain is the only country with such a decline in performance. The country’s gap to the EU has increased over time. In 2008, the relative performance level was at its highest at 77% whereas in 2014 it has decreased to 69%.

In 2015 Spain index is below 2007, (0.396)

For most indicators, Spain is performing below the EU average. In relative terms, the weakest indicator is license and patent revenues from abroad. Performance in open, excellent and attractive research systems comes close to the average performance of the EU, mainly because of stIUS 2015 6rong relative performance in International scientific co-publications.

However significantly declining in finance and support and firm investments. Venture capital investments (-17%) has declined most.

Final comments:

We can only say that the same barriers that we identified more than a year ago, persist. We established root causes after a detailed analysis of the results of the 25 indicators.

Many of the indicators show worse results, so we can repeat the following as the main barriers to innovation in Spain:

  1. The private sector does not invest. Private investments in innovation are 3 times lower than in leading countries and 1/2 of the mean, both in R & D investment as well as in innovation other than R & D. Public investment is somewhat higher but unfocused and disconnected from the economical activity and companies.

  2. Business Model.  The model of business internationally competitive and innovative to participate in the global arena, is not sufficiently recognized. In contrast, many major companies have emerged and they work with a model of proximity to political power, coming from public monopolies, or by an intrinsic model, based on the concessions and agreements with administrations.

  3. The education system. Education is a strong barrier that places human resources below the countries of the European environment. It is not results-oriented and not to innovation. The Universities increase in the number of scientific publications, but are not reflected in patents. Innovative initiatives are limited to the professionals, medicine, design, etc. There is a growing trend that better educated people have to seek employment abroad.

  4. Economic Model. Still no change in an economic model that is in the past paradigm. Based on non-productive assets or resources, land, buildings or strategies that do not create value, and competing only on price, lower personnel costs, extensive use of resources, environmental damage, production in mature or declining phases, speculation etc.

  5. Financial Structures. Financing innovation is clearly falling. Therefore financing systems for businesses, and the existence of venture capital for startups are not developed. Venture capital and entrepreneurial support systems are very poor or non-existent in some areas.

  6. SME’s are not sufficiently connected and do not invest neither separately nor in the form of partnerships or collaborations in innovation. In many cases the culture is competing on price and locally. Therefore, the total % of innovative SME’s cooperating or in alliances with others is so low. SMEs are in a delayed position using technological tools and in the introduction of product innovations, or process innovations in marketing or organization.

  7. Intangibles are not valued. There is a lack of valuation of intangibles in general specially by managers, probably due to the business model oriented to short-term or price competition. Not only are there a number of patents significantly below our environment, but also, there is a lack in branding or design in general. Intellectual capital is not sufficiently valued in management systems, or organizational and relational assets.

  8. Opening to the outside. Many companies do not have a culture of openness to the outside, not into new markets, or collaborations, partnerships or not even in customer orientation. The rate of collaboration of clients with new projects, is significantly lower than in Europe.

  9. Connection between companies and science/technology is still missing. Few public, private or mixed institutions, associations, groups (clusters) act as promoters of innovation being bridges between research and technology base and business.

[1] http://ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards/index_en.htm

[2] https://www.fguell.com/?p=3362&lang=en

[3] https://www.fguell.com/blog/wp-content/uploads/2014/06/Model-for-innovation-management-en.pdf

[4] https://www.fguell.com/?p=2917&lang=en

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