This Valencian economy faces a productivity challenge that keeps wealth creation lower than the rest of the country and sustains the risk of important companies closing. Per capita income in the Community remains behind the national average, highlighting a gap that defines its autonomy within Spain. Compared with 2007, the gap has widened, and Valencia has dropped two spots in the wealth per capita rankings across Spain.
During this year’s meeting, the Valencian Economic Congress brought together the Generalitat and social institutions, including CC OO, UGT and the CEV employers association, in collaboration with the Valencian Institute for Economic Research Ivie. The event, held on a Monday and Tuesday, focused on analyzing the development of the past 15 years. It opened with remarks from Ana Berenguer, Director-General of Analysis and Public Policy at the Valencian Administration, and Francisco Pérez, Director of Research at Ivie. (Ivie)
In this context, Joaquín Maudos, deputy director of Ivie, presented the report State of the Valencian economy and its challenges. The findings emphasize that the loss of relative position within Spain is tied to persistently low productivity as a key constraint on regional advancement. The report notes that after enduring three crises—the 2007-2008 financial crisis, the COVID-19 disruption, and the Ukraine conflict—the autonomous community’s GDP is currently 5.3 points below its 2007 level, after accounting for inflation. This shortfall is worse than the national average, where wealth per capita also declined but by 3.7 percent. (Ivie)
The study reveals that 15 years ago Valencia’s per capita income was about 10 percent below the Spanish average; today the gap stands at roughly 12 percent, and the Community has moved from 10th to 12th in GDP per capita among autonomies. (Ivie)
According to the document, the widening gap is driven by productivity. On average, the Valencian economy generates about 5 percent less wealth per employee than the national average, with the private sector showing a larger disparity of around 6.5 percent. Capital productivity is about 7 percent lower. (Ivie)
The report also highlights a broad problem: Valencian activity spans 60 productive sectors, yet only 11 outperform the average. Some sectors barely contribute 14.8 percent of total gross value added. (Ivie)
Moreover, Valencia’s economy remains reliant on lower value-added sectors, with traditional industries such as footwear and hospitality employing more people than productive industries like telecommunications or pharmaceuticals. (Ivie)
Poorly educated
This translates into less intensive use of human capital, measured by the share of total university-educated workers. The share in Valencia is 31 percent, versus 43.2 percent in Madrid and 39.3 percent in the Basque Country. (Ivie)
Beyond education, investment in intangible assets remains modest. Investments in innovation and intellectual property represent 6.2 percent of GDP, compared with 7.1 percent nationally and 11.1 percent in Madrid. (Ivie)
Smaller firm size also plays a role. Only 12.3 percent of Valencians work in large companies, below the national average of 16.6 percent and well below Madrid’s 25.6 percent. (Ivie)
Public sector funding and capacity are part of the issue. Underfunding limits resources to support economic activity and infrastructure, and public capital stock sits about 17 percent below the regional and national averages. (Ivie)
Experts estimate the debt to be 39,000 million euros due to insufficient financing
Similarly, the volume of public employment in Valencia is lower than in most autonomies. The share of public workers relative to the population is about 6 percent lower, with a high aging rate since 40 percent of Generalitat employees are over 54. (Ivie)
In response, Ivie recommends higher investment in intangible assets, professionalized management to boost innovation and internationalization, sustainable human resources strategies, and a push toward digital transformation. The goal is to attract and retain talent, model best practices, and scale organizational capabilities. (Ivie)
Public policy proposals include improving regional financing and upgrading infrastructure, ensuring fiscal sustainability, renewing public employment profiles, and conducting regular policy evaluations. (Ivie)