When he was the European Union's top diplomat, Josep Borrell described Europe as "a garden," in contrast to the "jungle" that is much of the rest of the world. On paper, this supposed garden is based on the security and capacity for citizens to progress economically and materially, guaranteed by a strong state that redistributes wealth through taxes, but above all through basic services. In other words, the defining element of European progress is the so-called welfare state. Despite Borrell's positive words, the viability of this welfare state is being questioned across the continent, doubts that also affect Catalonia and Spain. What future, then, does the welfare state system, on which the Catalan economy is based and on which millions of people depend to a greater or lesser extent, have?

The current situation is positive. Growth prospects remain good for this newly begun 2026. In general, Spanish companies are more optimistic than their European counterparts, although several variables cloud their potential, such as high tax rates and absenteeism—especially sick leave—according to employers' organizations. These are essential elements, they affirm, for improving competitiveness and productivity. A key positive point is exports—once the initial shock of tariffs in the trade policies implemented by Donald Trump in the US has subsided—despite geopolitical instability, according to the survey results. Business Outlook 2026 which are prepared annually by European chambers of commerce, including the Spanish chamber, chaired by José Luis Bonet.

2026 opens up for the Catalan economy and the Spanish economy as a whole in a context of transition and uncertainty, but also of opportunity. After several years of sustained growth, exceeding that of the Eurozone, we are entering a phase in which the tailwinds are moderating, and the main challenge is no longer growth itself, but how we grow and on what foundations. Forecasts indicate that Catalonia will continue to grow above the European average and, foreseeably, also above the Spanish average, albeit at a more moderate pace. This positive trend confirms the strength of our economic fabric, but at the same time highlights an uncomfortable reality: growth alone does not guarantee progress. If it does not translate into structural improvements, productivity, and social cohesion, it risks becoming exhausted. The structural challenges of a new cycle

In this new scenario, the priority must be clear: to consolidate a more robust, more competitive, and more inclusive economic model. And this requires addressing, without delay, some structural challenges that we have been dragging along for far too long.

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Catalonia has a problem that has been identified for some time. And it's not that they do little or bad work: according to the latest regional accounting data from the INE, Productivity growth per hour worked in Catalonia is above the Spanish average and, especially, above that of the Community of Madrid. This trend is largely due to the greater weight of industry, which contributes more added value, investment, and exports than in Madrid, where services are even more prevalent. In any case, the Spanish capital leads in average salaries, due to the high concentration of headquarters of large companies and, therefore, of well-paid managers and executives. But the real problem is wealth redistribution: Madrid leads the way—the capital city effect plays a significant role—with a larger share of the wealth per capita. The second and third positions are occupied by two regions with their own financing models: the Basque Country, which also has a large industrial sector, and Navarre. The solution? There isn't a single one, but some could include reviving initiatives such as the pact to increase the weight of industry, given the advantages this activity provides to the economy as a whole; Promoting the creation of larger or more technologically advanced companies (more value and higher wages) and a regional funding model that, while perhaps not unique, is certainly fairer. Little...

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The productivity growth of Catalan workers was significantly higher than that of employees in the Community of Madrid, and also much higher than the Spanish average, according to 2024 regional accounting data published this Tuesday by the National Statistics Institute (INE). According to this agency, Catalan productivity improved by 1.82%, while that of Madrid workers increased by only 0.04%. The Spanish average stood at 1.20%. In contrast, workers in Madrid were much better paid than their Catalan counterparts. The average salary in Madrid was €46,850 per year, while in Catalonia it was €43,411. The INE includes all types of compensation received by the worker in the average salary, whether in cash or in kind, overtime pay, and social security contributions. In both cases, the average salary was significantly higher than the national average of €40,514 per year. In the ranking of highest-paid workers, Madrid takes first place (€46,850), followed by the Basque Country (€45,321), Catalonia (€43,411), and Navarre in fourth place (€43,109). At the other end of the spectrum, the lowest average salary is in Extremadura (€33,695), behind Murcia (€34,573) and Andalusia (€35,505). Another aspect covered by the INE (National Institute of Statistics) is the growth in investment, which, according to the latest data from Idescat (Statistical Institute of Catalonia) It has become the main engine of the Catalan economyThus, according to the INE (National Institute of Statistics), investment in Catalonia in 2024 grew by 7.1%, the same percentage as in the region presided over by Isabel Díaz Ayuso, and two points above the national average (5.1%). In fact, the regions where investment grew the most last year were Ceuta and Melilla (9.7%), Cantabria (8.8%), and Catalonia and Madrid (7.1%). Investment fell in only one region, La Rioja, with a decrease of 1.7%.

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Round numbers, like birthdays, captivate us with their certainty. The 50th anniversary of the dictator's death—Franco—holds a mirror up to us, reflecting both successes and failures. The mirror that generates the most unanimity among economists is GDP per capita, seen as a measure of prosperity. We have reliable data to compare the GDP per capita of each of Spain's current autonomous communities in 1975 (they didn't yet exist, but their boundaries were statistically well-defined) and today (2024). In 1975, Catalonia's GDP per capita was 28% above the national average. This was the lowest figure achieved in the entire previous century. The decline was particularly rapid between 1920 and 1930 and between 1960 and 1975. In both cases, in addition to the similar political regime—military dictatorship—there was a very strong wave of immigration. In fact, these were the two largest waves of immigration of the entire 20th century.

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There's no way to overcome this challenge. Europe invests a third less in innovation than the US, and this gap persists, leading to a loss of competitiveness and productivity. This is the warning from Europe G, the think tank led by former Catalan Minister of Economy Antoni Castells, in its latest report. paperData from the OECD and Eurostat clearly reflect this: European spending on research and innovation (R&D) amounts to 2.3% of gross domestic product (GDP) compared to 3.5% in the United States. This 35% difference "explains the lag in productivity, business profitability, and technological leadership," the authors assert.

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At the entrance to the CCOO headquarters in Madrid, there is a plaque marking the birthplace of the union's current general secretary, Unai Sordo (Barakaldo, Basque Country). The immense plaque CCOO, of the Basque Agustín Ibarrola Goicoechea (1930-2023), presides the hall contrasting with the gray concrete. "Ibarrola was a much-loved figure," Sordo recalls. The union leader receives ARA shortly after Junts announced its veto of some of the Spanish government's laws.

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Ninety-one percent of Catalan economists, who held their annual conference in Barcelona, ​​believe that Catalonia must change its production model to guarantee its competitiveness, according to data from the College of Economists announced by the organization's dean, Carles Puig de Travy. The challenges are overcoming low productivity, infrastructure deficiencies, excessive bureaucracy, and a lack of structural reforms. At the same conference, the Catalan Minister of Economy, Alícia Romero, on the same day that Catalonia's growth figures for the third quarter were released (0.7% quarter-on-quarter and 2.4% year-on-year), stated: "Competitiveness must generate wealth that is shared socially and territorially, otherwise..."

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The Barcelona Chamber of Commerce revised upwards its growth forecasts for the Catalan economy this year on Tuesday. The business institution believes that economic activity will rise in 2025 thanks to an improvement in household consumption and business investment, something that is also being reflected in the rise in productivity, one of the historically unresolved issues for the Catalan productive sector. Therefore, the president of the Chamber, Josep Santacreu, sent a message of "optimism" but with "caution."

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The debate on the transformation of the production model is often presented in terms of reducing or increasing the weight of certain sectors. The activities to be reduced would be the least productive, such as tourism, as opposed to the most productive, such as industry. Without going into the core of this debate, it is worth making some clarifications about the relationship between productivity, employment, and the remuneration of labor and capital in the different economic sectors. Tourism, for example, is not really a single sector of activity. It is a diverse economic and social phenomenon with a significant impact on different branches of activity (from hospitality to commerce, including transportation, cultural and sports activities, and the food industry).

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More tourism, fewer jobs in manufacturing. This is, in essence, the conclusion of a new study analyzing the impact of the increase in foreign visitor flows on the labor market in Spain. It shows how the arrival of more tourists leads to an increase in hiring in this sector and in related services, but at the same time destroys others, especially in manufacturing, where wages have also fallen.

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One outstanding issue for Catalonia is improving technology transfer, that is, the process of transforming knowledge from scientific and technological research into practical solutions or applications for the market. It is an essential element of innovation and, by extension, improving productivity, the variable that ensures long-term progress. The Basque Country in Spain and Flanders in Belgium are two benchmarks that Catalonia looks to, characterized by having innovative ecosystems focused on industry.

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The Catalan economy is experiencing a seemingly prosperous moment. With GDP growth of 3.6% in 2024, four times that of the eurozone, Catalonia is consolidating its position as Spain's growth engine. However, this temporary boom hides a more complex reality that deserves deep reflection: the structural problem of productivity, the cornerstone upon which any strategy for sustainable prosperity must be built. The paradox of growth without productivity is reflected in the most revealing fact of the current situation: despite vigorous economic growth, total factor productivity (TFP) in Catalonia contributed negatively (-0.2 points) to GDP growth in 2023. This means that growth is fundamentally based on the accumulation of productive factors—more workers, rather than better, more workers; its reflection in the evolution of per capita income. Spain, as a whole, has experienced a 7.3% drop in its TFP between 2000 and 2022, while in the United States it grew by 15.5%, Germany by 11.8%, and France by 12.7% over the same period.

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One of the challenges facing an economy is technology transfer—translating knowledge derived from scientific and technological research into practical solutions or applications for the market. In 13 of the 23 indicators of the European Commission's Regional Innovation Scoreboard (RIS) for 2025, designed to identify strengths and weaknesses relative to Europe's leading innovation regions, Catalonia still lags behind the European Union (EU) average.

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Spain was the second country in the world (after the USSR) to legislate an eight-hour workday. This was in 1919, as a result of the La Canadiense strike. This objective had been a constant of the labor movement throughout the 19th century, since the Industrial Revolution typically saw much longer working days. Since then, the working day has been reduced by eliminating one day of the week (from 48 hours a week to 40) and introducing paid vacations (typically four weeks a year). However, workers' standard of living has risen prodigiously, taxes have risen even more rapidly—which has allowed for the financing of a generous welfare state—social contributions have allowed pensioners to survive their increasingly long retirements, all while investors have not stopped collecting their often equally generous profits.

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In tourism, it's now time to decline. At least, relative to previous growth rates. We'll see how society experiences a process of this nature. We'll see it from a variety of perspectives: will maintaining record visitor numbers year after year constitute decline? Of course, from the perspective of maintaining the figure, which would already be a milestone, this would imply a zero growth rate! Will recording growth rates lower than those of the past be perceived as decline? More of the same: in terms of growth rates, but increasing less rapidly than before, will it be considered a failure, despite reporting absolute increases in visitors? Is it necessary to decrease in absolute terms, or would it simply suffice to replace one type of tourist with another, considering greater productivity—that is, greater income generation per employee—as a satisfactory improvement? For the same turnover, it may not be necessary to have so many tourists if they are more willing to pay.

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Teresa Garcia-Milà (Barcelona, ​​1955) has taken over from Jaume Guardiola as the head of the Círculo de Economía (Economics Circle) for the next three years. The economics professor has earned the title of being the first woman to preside over the organization in its 67-year history and asserts that she intends to continue the initiatives developed by the previous board. Garcia-Milà, who has a more academic profile than her predecessors, points to the challenge of productivity and the need to redefine the regional financing model as key pillars for the Catalan economy in the coming years.

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It's one of the essential issues for an economy: increasing productivity, which translates into true progress. And the Spanish economy lacks that leg to gain quality, as reflected in the investment data as a percentage of gross domestic product (GDP), which is below the European average. However, it is competitive, as shown by the trade surplus data, that is, it earns more from what it sells abroad than what it pays to import. The opinion group EuropeG, co-directed by former Minister of Economy Antoni Castells and Professor Josep Oliver, has focused its new debate on this subject based on a study by Joan Ramon Rovira, head of research at the Barcelona Chamber of Commerce.

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The incorporation of immigrants into the labor market and the improvement in productivity were the two main drivers of the Catalan economy last year, which has allowed Catalonia to exceed the growth rates of the major European economies, according to the report. Economic Report of Catalonia 2024, presented this Thursday by the Barcelona Chamber of Commerce.

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