Spain’s SETT: A Bold Public Push into Technology and Digital Transformation
The government has started the process to create a new public company designed to channel state investments into the tech sector and to consolidate the main aid programs for the digital industry. The Council of Ministers approved the urgent decree to begin the formation of the new State Company for Technological Transformation (SETT), a major state-led vehicle with an initial investment capacity of around ten billion euros, aimed to be operational by next May. The plan envisions evolving the current State Company for Microelectronics and Semiconductors (SEMyS), which has reported to the Treasury, into this new SETT.
The upcoming entity, expected to report to the Ministry for Digital Transformation led by José Luis Escrivá, is tasked with executing investments and mobilizing subsidies in strategic sectors such as telecommunications, advanced technology, and digitization. The group has informally been nicknamed “SEPI digital” due to its resemblance to the State Society for Industrial Participations (SEPI) but with a sole focus on technology within the public framework.
“A 20-Billion Euro Treasure”
The new group will have the capacity to mobilize around 20,000 million euros, directed at cutting-edge technology areas and will assume several aid programs previously managed by the Economy or Treasury Ministries.
The SETT will bring together initiatives already in place, including the Chip PERTE, endowed with 12,000 million euros for semiconductors and microelectronics; the NextTech fund, with 4,000 million euros to invest in companies with a strong tech innovation component; and the Hub Audiovisual fund, with 1,700 million euros for companies in the audiovisual sector.
Contemplated Involvement with Telefónica
Speaking at the Mobile World Congress in Barcelona, the Minister of Digital Transformation announced the SETT plan and left open the possibility that this new state group could end up controlling the government’s stake in Telefónica. The Council of Ministers had already instructed the SEPI to acquire up to a 10% stake in Telefónica, a move intended to counter a prospective entry into the Spanish telecoms market by Saudi Arabia’s Saudi Telecom, which could involve a stake of up to 9.9%. The government has confirmed that this mandate remains in force and will continue alongside the creation of the SETT.
SEPI’s plans to enter Telefónica’s capital remain unchanged despite the creation of the new public entity. The mandate approved by the Council of Ministers is not altered by the SETT’s emergence, and Escrivá’s remarks about a public partner in Telefónica keep the door open for SETT or a nearby structure to play a role in equity participation.
All Functions of the SETT
The SETT is expected to strengthen technological sovereignty in a climate of intense international competition in areas like chip design, new materials, and investments in transformative technologies. It will accelerate the adoption of high-potential technologies to boost productivity and support medium- to long-term growth. The entity should also drive public sector modernization by bringing in specialized tech talent, enhance capabilities for trend analysis in a fast-changing field, and promote public-private collaboration.
With these objectives, the SETT will fund investments in strategic sectors tied to digital transformation, especially telecommunications, semiconductors, digitalization, and the audiovisual industry. The company aims to consolidate state holdings in high-tech, telecom, and digital sectors, potentially paving the way for greater public control in Telefónica and other major groups. It will also back Spanish companies through loans, equity investments, minority stakes, or subsidies.
[Citation: Government statements and press briefings related to the SETT plan and related industrial policy.]