Basque Government to Boost R&D Investments to 3% of GDP by 2030

2025-03-12 11:35:00

The Future of Innovation in Euskadi: Navigating Energy and Digital Transformations

Innovation has often been described as the lifeblood of modern economies, and Euskadi, the northern Spanish region known for its rich industrial history, is no exception. As the Basque government, led by Minister of Industry Mikel Jauregi, embarks on a transformative journey, the stakes have never been higher. With a commitment to enhancing innovation in small and medium-sized enterprises (SMEs), Euskadi aims to elevate its status among the most competitive regions in Europe. But what does the future hold for this region as it tackles the dual challenges of energy and digital transitions?

The Heartbeat of the Economy: SMEs

Small and medium-sized enterprises represent a staggering 98% of Euskadi’s commercial landscape, forming the backbone of its economy. Events like the recent recognition of innovative SMEs highlight the critical role these businesses play in the Basque economic fabric. But what does “innovation” truly mean for these enterprises?

For SMEs in Euskadi, innovation is not just about new products; it encompasses broader strategies that align with sustainability, digitalization, and growth. According to Jauregi, who presides over a government committed to increasing investments in research and development (R&D) to 3% of the GDP by 2030, this focus will catalyze a deeper integration of innovative practices across industries. “Your innovative efforts since 2003 have positioned Euskadi as a strongly innovative country in Europe,” he remarked during a recent event.

The Role of the Hazinnova Program

At the forefront of this innovation drive is the Hazinnova program, an initiative launched in 2019 aimed at mobilizing over 1,050 SMEs in the region. Operated by the Basque Business Development Agency (Spri) and the Basque Innovation Agency (Innobasque), Hazinnova serves as a conduit for knowledge sharing, resources, and technological support.

How is Hazinnova changing the landscape for SMEs? By bridging the gap between public institutions and private entities, it fosters collaboration that is essential for innovation. With a network of 90 support entities—ranging from technological centers and universities to industrial clusters—Hazinnova empowers SMEs to access the expertise and tools needed to innovate effectively and sustainably.

Future Innovations and Trends

Investment in Research and Development

As Jauregi outlined, Euskadi’s ambition to elevate its R&D investments to 3% of GDP signals a pivotal shift in strategy. This increase not only emphasizes the importance of innovation but also aligns with global trends prioritizing sustainability and technological advancements. For the Basque region, investments will focus on two key areas: energy transitions and digital advancements.

Energy Transition: Towards Sustainability

Euskadi’s commitment to an energy transition is robust and aims at decarbonization through initiatives such as industrial electrification and the integration of renewable energy sources. The goal is to assist SMEs in adopting sustainable practices while remaining competitive on a global scale. For instance, as the CEO of Revenant Industrial & Ports Machinery, Alex López Aller, mentioned, ongoing projects like the Ri-isturbo—turning diesel engines into biogas—demonstrate how innovation can lead to sustainable solutions while significantly reducing emissions.

Digital Advancements: The Shift to E-commerce

The digital transformation of SMEs cannot be overlooked. With the explosive growth of e-commerce, SMEs like Ugatu Industries are leveraging digital platforms to enhance their operations, introducing over 7,000 product references online. This shift not only broadens their market reach but also equips them to compete against Asian markets, showcasing how digital tools can fortify a company’s market presence.

Public-Private Collaboration: The Key to Future Growth

At the heart of Euskadi’s innovation strategy is a robust public-private collaboration framework. Leire Bilbao, general manager of Innobasque, asserts that such partnerships are essential, especially in an era where complexities demand collective problem-solving. As the landscape for SMEs continues to evolve, collaboration will facilitate access to funding, expertise, and innovative solutions.

Three Exemplary Models of Innovation

The recent event concluded with a captivating round table featuring three exemplary Basque companies flourishing through Hazinnova support. Their stories illustrate the potential of innovation and collaborative ecosystems to drive growth and sustainability.

1. Ugatu Industries: Adapting to Market Changes

Under the leadership of CEO Amaia Ugalde, Ugatu Industries exemplifies how SMEs can pivot in response to challenges like the pandemic. By harnessing digital platforms for sales, they managed to maintain continuous operations, highlighting the significance of adaptability and innovation in today’s fast-paced environment.

2. Revenant Industrial & Ports Machinery: Embracing Circular Economy

Revenant’s commitment to a circular economy model signifies a forward-thinking approach where sustainability and profitability go hand in hand. Their initiative to validate machinery parts for reuse not only reduces waste but also offers a practical solution to the challenge of resource scarcity.

3. Nabla Wind Hub: Engineering for Sustainability

The evolution of Nabla Wind Hub—from a service-based engineering firm into a production-oriented entity—showcases the transformative power of collaborative networks. By partnering with companies specializing in sensor technology, they are not only innovating within their sector but also contributing to the sustainability of renewable energy infrastructures.

Future Considerations: Challenges Ahead

While the vision for Euskadi’s future is ambitious, several challenges lie ahead. Among these challenges is the need for continuous adaptation to rapidly changing technologies and market demands. The rapid pace of digital transformation requires SMEs to not only embrace technological advancements but also to manage the risks associated with cybersecurity and data privacy.

Access to Funding

As the Basque government plans to mobilize €500 million through various support programs aimed at technology strengthening and internationalization, ensuring that SMEs can effectively access and utilize these funds will be critical. Programs must consider the specific needs of diverse sectors, acknowledging that a one-size-fits-all approach will not suffice.

Cultural Resistance to Change

Despite the proactive steps taken by the government and various agencies, a cultural shift may be necessary within some sectors to fully embrace the value of innovation. Companies must cultivate a mindset that embraces change, encouraging experimentation and risk-taking that is often critical for groundbreaking advancements.

Conclusion: The Path Ahead

The road to becoming one of the most innovative regions in Europe is paved with both promise and challenges. For Euskadi, the key lies in leveraging its strengths—its SMEs, entrepreneurial spirit, and commitment to public-private collaboration—as they navigate the complex landscape of energy and digital transformations. By fostering a culture of innovation while investing in R&D and sustainable practices, Euskadi has the potential to lead not just in Spain, but throughout the European Union.

FAQ Section

What is the Hazinnova program?

The Hazinnova program is an initiative by the Basque government designed to support innovation in small and medium-sized enterprises (SMEs) by providing access to resources, expertise, and collaboration opportunities.

How does Euskadi plan to achieve its innovation goals?

Euskadi aims to invest 3% of its GDP in research and development (R&D) by 2030, enhance public-private collaborations, and leverage existing networks of support to bolster SME innovation.

What role do SMEs play in Euskadi’s economy?

SMEs make up 98% of Euskadi’s commercial fabric, serving as the backbone of the economy and the primary focus of innovation and development efforts by the Basque government.

What challenges do SMEs face in the innovation process?

Challenges include access to funding, the need for cultural shifts towards embracing change, and the necessity to continuously adapt to technological advancements and market demands.

Euskadi’s Innovation Future: A Deep Dive with Industry Expert Dr.Anya Sharma

How will Euskadi maintain its competitive edge amid energy and digital conversion? Time.news speaks to dr. Anya Sharma about the region’s aspiring innovation plans, the critical role of SMEs, and the challenges ahead.

Time.news: Dr. Sharma,thank you for joining us. This article highlights Euskadi’s commitment to becoming a hub of innovation. What’s your overall impression of their strategy focusing on energy transition and digital advancement?

Dr. Anya Sharma: Its a very forward-thinking approach. Euskadi has a strong industrial heritage, and recognizing the imperative to adapt to the green and digital revolutions is crucial for long-term competitiveness. The dual focus on enduring practices and digital transformation is spot-on. Investing in research and development and focusing on the digital transformation of smes is smart.

Time.news: The article stresses the importance of SMEs, which comprise 98% of Euskadi’s businesses. How vital is their participation in achieving these innovation goals?

Dr. Anya Sharma: They are the goals! SMEs are the engine of Euskadi’s economy. Any strategy aimed at boosting innovation must prioritize empowering these businesses. The article rightly points out that innovation for SMEs isn’t just about developing entirely new products; it includes adopting more sustainable business practices, integrating digital solutions, and scaling effectively.

Time.news: The Hazinnova program is presented as a key enabler for SMEs. Can you elaborate on its significance and how it’s changing the landscape for Basque SMEs?

Dr. Anya Sharma: Hazinnova is a clever mechanism. It acts as a critical bridge, connecting SMEs with resources, expertise, and collaborative opportunities they might not or else access. The network of support entities – technological centers, universities, industry clusters – is incredibly valuable. By facilitating knowledge sharing and providing tailored support,Hazinnova helps SMEs overcome barriers to entry and navigate the complexities of innovation adoption.

Time.news: The article mentions Euskadi’s ambitious goal to invest 3% of its GDP in R&D by 2030. How realistic is this, and what impact could it have on the region’s innovation ecosystem?

Dr. Anya Sharma: 3% is a important commitment exceeding the European average for investment in research and development, and it sends a powerful signal. Achieving this will require sustained political will and smart allocation of resources. If accomplished,this R&D investment could lead to breakthroughs in areas like renewable energy technologies,smart manufacturing,and advanced materials,thereby positioning Euskadi as a leader in these fields. Prioritizing energy transformation can turn Euskadi into a net exporter for renewable energies.

Time.news: The piece highlights examples like Ugatu Industries leveraging e-commerce and Revenant’s commitment to the circular economy. What key lessons can other SMEs draw from these innovation success stories?

Dr. Anya Sharma: Adaptability is paramount. Ugatu’s pivot to digital sales demonstrates the importance of being agile and responsive to market changes. Revenant’s focus on the circular economy highlights the potential to integrate sustainability and profitability. These success stories showcase that innovation isn’t just about high-tech inventions, but also about adopting smart business models that address evolving consumer needs and environmental concerns. Think global, implement local.

Time.news: The article also acknowledges challenges, including access to funding and potential cultural resistance to change. how can Euskadi overcome these hurdles?

Dr. Anya Sharma: Targeted support programs and funding mechanisms are crucial,ensuring SMEs can effectively access the resources they need. The government should ensure that the funding has a streamlined application process without excess bureaucracy. However, fostering a culture of innovation is equally vital. This involves promoting experimentation, encouraging risk-taking, and celebrating failure as a learning opportunity. Education and training programs can also play a vital role in equipping the workforce with the skills and mindset needed to thrive in a rapidly changing environment.

Time.news: What practical advice would you give to an SME owner in Euskadi looking to embrace innovation?

Dr. Anya Sharma: First, don’t be afraid to experiment. Start small, test new ideas, and learn from your mistakes. Second, embrace collaboration. engage with other businesses, research institutions, and government agencies to access resources and expertise. Third, focus on solving real-world problems. Identify unmet needs in your market and develop innovative solutions that address those needs. prioritize sustainability.The future belongs to businesses that can create value while minimizing their environmental impact.

Time.news: Dr. Sharma, thank you for this insightful discussion.Any last comments?

Dr. Anya Sharma: Euskadi is on the right track. By continuing to invest in its people,its businesses,and its infrastructure,it can realize its vision of becoming a leading innovation hub in europe. The journey will undoubtedly be challenging, but the potential rewards are significant. The government must embrace failures, support education around R&D, and continue to invest in the future. the best way to become the top investor in innovation is to create a system where investors and the public benefit.