2023-12-03 12:00:18
Will this be the era of reindustrialization? Spain, like other developed countries, has proposed increase the weight of the industrial sector in the economy and bring it closer to that of Germany or the Baltic countries. It will not be an easy task if we do not evolve from the traditional concept of 'industry' to that of 'technology industry'. The industrial sector will grow in areas such as technology, robotization, digitalization and complementary services such as logistics, maintenance, design, engineering, etc. That will have two effects. On the one hand, the growth of the sector will not be counted in the GVA (gross added value) that today we call 'industry' but in what we call 'professional or technological services' and, on the other hand, the robotization process will limit the job creation capacity of the industrial sector in the future.
The data show that this transformation process has already begun. The manufacturing industry has generated wealth (GVA) at an annual rate of 1.3% during the decade 2012-22. This growth is the result of an increase in full-time employment of 0.6% annually and an increase in productivity of 0.7%. Therefore, Productivity has been the main explanatory factor for the growth of industrial activity. Contrary to the economy as a whole, where productivity growth has been zero or negative due to the strong growth of employment in low value-added sectors.
This increase in productivity, linked to the process of productive specialization and digitalization, is what is behind the increase in the competitiveness of the industry, which is reflected in the greatest recent success of the Spanish economy: its positive external balance.
The composition of GDP is registering three changes that reflect the increase in the competitiveness of the economy, the impact of digitalization and technological investments. The silent transformation. The first change is the strong increase in exports of non-tourist services in recent years, among which ICT, business, transportation and goods auxiliary services stand out. From being 19.3% of total exports at the end of 2019 to being 22.3% in the second quarter of 2023. The gain in competitiveness in increasingly internationalized sectors, such as computer and business services, has allowed Spain to have a growing surplus in this type of services compared to the deficits recorded by Germany or Italy, with serious supply problems.
Second, the composition of the investment reflects an increase in the weight of investment in intellectual property (innovation, R&D, patents, technology), which has gone from 16.4% of total fixed investment in 2019 to 19% in the second quarter of 2023. Without a doubt, the European Next Generation funds have been able to boost this growth, but the pandemic has also accelerated it.
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The third element that has increased its weight in GDP is capital depreciation. The expense of replacing depreciated capital to keep it in operation (depreciation) is what explains the increase in the weight of gross operating surplus (business profits) in GDP during the last five years. This is the result of both a greater increase in investment in intellectual property compared to investment in equipment and infrastructure, as I have already pointed out, together with the fact that the depreciation rate of intangible capital is up to five times higher than that of physical capital.
The three elements are a sample of the silent transformation that is taking place in the productive structure of the economy, linked to the effects of the digital economy and the robotization of the industry. If we want to reindustrialize the country, we will have to continue promoting this transformation, with the support of public funds, with the generation of more talent, with efficiency in the application of digital knowledge on industrial activity, and with fewer bureaucratic burdens in public management. Only if the great ecosystem of digital companies that exists in our country manages to transform and expand the industrial sector, will we be a little closer to the German economy.
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