Spain | Intangibles — the key to productivity

Summary

Spain is among the eurozone countries with the lowest productivity and least investment in intangibles. In the future, it must make use of digitization and NGEU funds to increase intangible assets, particularly R&D and training of human capital — essential for driving productivity.

Key points

• Key points:
• Unlike the majority of developed economies, Spain's productivity profile is countercyclical, rising in recessions and falling in periods of economic boom — a phenomenon which is largely rooted in the weaknesses and limitations of the labor market.
• There are also other factors making it hard to increase productivity, some related to the industrial fabric, such as the small scale of businesses, and others linked to the production process, like the lack of skilled human capital and the low level of productive investment — particularly in intangible assets.
• The majority of studies and empirical analysis published conclude that those countries which have invested most in intangibles, in general, experience more sustainable productivity growth.
• The relationship between intangibles and productivity is not as strong in Spain as it is in other developed economies. BBVA Research's estimates suggest that a 10% increase in the stock of intangible assets would lead to a 1% rise in productivity.
• By sector, almost 75% of the investment in intangibles is concentrated in services, with industry—which has greater labor productivity—having 25%: this composition is more balanced in the eurozone. By region, the Community of Madrid invests most in intangibles, followed by Catalonia, with both regions having notable levels of productivity.

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