Productivity in Catalonia and Spain: a strategic urgency

Productivity is the foundation on which an economy's competitiveness can be permanently sustained. Productivity, and its improvement, represents the efficiency with which the factors of production—labor and capital—are combined. Without it, economic growth is unsustainable, because GDP growth depends solely on the increase in factors, whether the working population or investment. In our case, this has been thanks to the migration process, given our aging population, and despite the increase in tax pressure, which has reduced investment—public and private—in recent years.

Data from the Valencian Institute of Economic Research (IVIE), which closely monitors productivity, reveal a worrying reality: total factor productivity (TFP) in Spain has fallen by 7.3% since 2000, with a particular stagnation2 in Catalonia,2 0.23% in state TFP, while the Community of Madrid has added 0.24%. This trend also distances us from the most advanced countries in the European Union, where Germany has increased its productivity by 11.8% in the same period and France by 12.7%; across the Twenty-Seven, an increase of 26.6% has been recorded. Without a doubt, these data shed light on a problem in our economy that must be addressed. It is the central axis for improving our economic growth, and it means that this improvement in the economy is not seen or noticed by the population as a whole.

There are several issues that need to be addressed, which explain this weak and negative evolution of productivity, which must be reversed, among which I would like to highlight the greater presence of small companies and the greater weight of less productive sectors: it is not about eliminating them, but rather strengthening those sectors that show higher levels of value and because they are currently below the European average and almost a third of that of Germany, for example. There is a high correlation between the size of the company and its average productivity. Thus, the smaller size hinders the capacity to invest in innovation or internationalization.

Also worth mentioning is the lower investment in R&D+i – Spain allocates only 1.4% of GDP to R&D, below the European average (2.2%) – or the weakness of energy, which causes the sectors that are more intensive consumers to suffer an increase in costs, which sometimes puts them...

Although the European Union and the main countries of the Old Continent have shown relative improvement, in comparative terms it has been less intense than, for example, in the United States, and they show a loss of competitiveness that must be reversed. It is in this area that the Draghi and Letta reports on European competitiveness (2024) and the internal market are worth highlighting, emphasizing that these problems are systemic in the EU but are worse in Spain. Draghi warns that without a "green and digital revolution," Europe will lose out as a secondary player in a world dominated by the United States and China. Letta, for his part, insists on the need to complete the single market in key sectors such as energy and finance.

Partly within this context of improved productivity, it is necessary to consider the National Pact for Industry 2022-2025, which has promoted 152 actions, with a budget of 3.27 billion euros. In view of its review, for the 2026-2030 period, which is already underway, transformative actions should be emphasized, not incremental measures. Among other things, these should include scaling up business size, promoting digitalization and the energy transition, improving training and attracting talent, promoting financing, competitive taxation, improving innovation, research and development, internationalization, and the harmonious and gradual rollout of legislation.

I conclude with Draghi's words: "Without productivity there is no growth, and without growth there is no future." Just as those of 2012, in the midst of the euro's crisis of confidence, were also very sensible: "Whatever it takes," which essentially meant that we would do "whatever is necessary and whatever is sufficient."