The productivity of the Spanish economy has fallen by 7.3% so far this century, while the productivity of the EU has increased

The productive capacity of the Spanish economy per working hour and per invested capital has fallen by 7.3% so far this century; This increased the inefficiency gap. Spain from other countries that made significant progress in the same period, such as United States of America (+15.5%), Germany (+11.8%), United Kingdom (+8.8%) or France (+0.8%). same as spain Italy According to the data analyzed in the first report of the report, it also lost the productivity of its workforce and capital with a delay (-5.1%) in the same period. Observatory of Productivity and Competitiveness in Spain (OPCE) launched BBVA Foundation And Valencian Institute for Economic Research (Ivie).

The study, published this Friday, underscores the lack of progress. productivity sum of factors (PTF) slows growth GDP per capita And the gap between countries that manage to increase their productivity is widening. Thus, the distance between Spain and the EU income per capita It increased from 2.4% in 2000 to 14.4% in 2022.

“Spain remains below the EU at this indicator level” competence The report directed by the researchers states that companies use business and existing capital (machinery, equipment, real estate assets, infrastructure) to produce added value. Francisco Pérez, Matilde Mas, Dirk Pilat and Juan Fernández de Guevara.

In short, “this evolution of productivity misuse of resources The report states: “Spain’s disadvantage compared to other countries in terms of productivity is international competitiveness Because part of the production system is not efficient, slowing down and making improvements while competing for cost advantages rent per person And welfare‘ he concludes.

Four phases since 2000

In the 22 years of this century covered by this analysis, OPCE distinguishes at least four phases. A first stage Between 2000 and 2013, Productivity in Spain is at a standstill, with the financial crisis and above all leaving the country full of empty houses, properties and offices (or, the same thing, unproductive assets).

In a second moment, in between 2013 and 2019 The report finds a 1.2% growth in productivity; this “indicates a slight change in its development”, albeit very slight.

However, the pandemic interrupted this productivity revival, with the index recording a sharp decline of 5.1%. in 2021 It therefore reflects the impact of the health crisis on accommodation, transport, entertainment and arts activities and has a relatively greater weight in the Spanish economy.

After the pandemic, the indicator grew again by 2.8% cumulatively. Between 2021 and 2022 (1.4 points per year) and is recovering faster after the previous crisis, as highlighted in the report by the BBVA Foundation and Ivie.

Slow business progress and capital collapse

The balance of these four phases results in a decrease of 7.3%. Total Factor Productivity According to OPCE analysis, this is the result of a combination of slow progress. productivity per hour worked and a deep decline capital goods.

business efficiency, It is calculated by dividing GDP by total income. hours worked by employeesachieved average annual growth 0.7% since the beginning of the century. (Although this progress is less than 1.1% in the EU or 1.4% in the US).

At the same time capital efficiency – the added value produced per unit of existing capital equipment (machinery, technological equipment, real estate, public and private infrastructure) – fell by 1.2% per year on average between 2000 and 2022, as accumulated investment outpaced the value added created.

Reasons

Ivie economists explain: Poor productivity per hour worked In Spain, there are factors related to “poor educational outcomes”, temporary employment and lower levels of employment in more skilled sectors (which have a relatively lower weight in Spain than in other developed countries). The “prevalence of non-professionalized management models” in many companies also contributes to the low productivity of the labor factor in the Spanish economy.

But above all, the low Spanish productivity real estate ballast And poor investment in intangible assets (R&D, software and databases, design, brand image, company training for employees, innovative organizational structures, etc.) have a high potential to increase the efficiency of companies. Compared to developed economies, Spain The latest situation in investing in intangible assets. Although he intends to do so andl 40.5% of total investmentThis percentage is 20 percentage points below the rates in force in the UK, Finland, USA, France or Sweden. In relation to GDP, investment in intangible assets in Spain stands at: about 9.5%Almost half the rates in France, Sweden or the USA. As a result, the OPCE report detects a “positive change in trend” in the Spanish economy.

Meanwhile, the Spanish economy has not yet finished digesting the consequences of the crisis. 2008 real estate debacleThe report states that “real estate assets are very durable and can remain partially unused for decades, resulting in depreciation and financial costs that continue to this day, leading to depreciation and financial costs for the companies or households that own these assets.”

Answers

OPCE emphasizes the need for strengthening to solve the productivity problem identified in the Spanish economy “five direct levers”: productive investment, human capital, innovation and other intangible assets, digitalization and productive dynamics of companies.

Besides these direct factors, there is also the need to encourage “indirect levers” for efficiency, such as promoting international trade and foreign investment policies; regulatory and competition policies; labor market policies; and industrial and regional policies.

Observatory members also state: Spainnext to you Italy and Estonia, They are the only countries in the eurozone that have not yet heeded the European Commission’s 2016 recommendation. National Productivity Councils To solve these problems.

Source: Informacion

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