About six in ten Spanish companies prefer financing innovation projects with their own resources before seeking grants. Or at least use the tool they rely on most, followed by self-financing with a tax deduction to be claimed later. This stance is reflected in a report by innovation and tax advisory groups, which also notes that the importance of both mechanisms has risen again this year, to the detriment of Turkey in the ranking. National grants have dropped by about 15 points compared with last year.
“The core issue is that the Spanish plan has historically prioritized R&D and paid far less attention to innovation as a practice, even though innovation is what most companies undertake,” explains Javier Saldana, innovation director at Ayming Spain. He clarifies that the first term refers to scientific advances or technological discoveries, while the second involves developing new solutions or evolving existing products based on those advances. The support available is typically uneven in intensity.
Moreover, subsidy rules often favor situations where a non-refundable tranche is granted, or where a subsidy obliges the company to hire a worker for the same amount, or to cover costs such as innovation consultancy or notarial services, sometimes tied to contracts with a government agency.
Bureaucracy, Treasure, and complexity
“There is a broad sense that the state is not deeply committed to innovation and that this assistance is not particularly daring,” agrees Ricard Soler Kopps, CEO of Atlantis IT. His firm develops geolocation solutions and has shown interest in many of these grants. “With time and experience we have learned that the programs exist, but it is necessary to act, to seek them out,” he notes, while acknowledging that companies often feel daunted by the administrative burden and the fear of Treasury scrutiny for any minor error or unforeseen consequence.
For PropHero, a real estate investment company, the primary obstacle is administrative. “The processes are extremely complex, slow, and difficult,” says Pablo Gil, co-founder and CEO. He emphasizes that the entire entrepreneurial sector and public administration would benefit from simplifying and digitizing procedures so no one has to waste more time than necessary in selecting resources that could fairly benefit them.
“Public actions to foster innovation tend to be intricate and not very viable because bureaucracy is highly burdensome,” summarizes Pere Periche, CEO of Periche Profesional, a company in the hair products sector. He cites a real-world example: a natural biocide development for one of their lines was rejected due to the project’s infancy, and if it had been more advanced or had clearer drivers, it might have received support; otherwise, the project faced cancellation.
Delay in ‘Next Generation’
This year’s landscape is further complicated by delays in Next Generation funding. “Many companies waited for these funds, and because they arrived late they had to proceed with their own resources, risking the loss of opportunities,” Saldana notes. Still, the report by Ayming indicates that more innovation was pursued through international grants in the current year compared with the previous year, highlighting a shift toward non-domestic sources while EU support gradually takes shape.
“Next Generation and other EU aids are already being applied to firms in the country, but they have yet to deliver the expected impact,” observes Carlos Artal, a Spain-based consulting executive. He stresses the need to bring management and companies closer together and to push for simplicity so that administrative processes become more efficient and accessible. His conclusion points to a practical, streamlined path: ease the administrative load to unlock real benefits from available funding.
Ultimately, Saldana sums up the subsidy dilemma as a matter of precise wording. “There is a big opportunity here, yet one small requirement can create a funnel that leaves many behind,” he says. Some firms fail to reach the minimum threshold of innovation, others lack sufficient budgets, and some cannot secure a bank guarantee necessary to move forward. The overall message remains that stronger policy design and more straightforward execution could unleash substantial innovative activity across Spain, supported by a combination of internal funding, targeted subsidies, and EU-backed programs. [Source: Ayming Spain report on innovation funding and subsidies].