The shift in productive model in Spain: a reality or a pending task?

The shift in productive model in Spain: a reality or a pending task? The debate on the productive model in Spain has been a recurring topic in the country's economic sphere. Compared to other European partners, it has been distinguished by its volatility, low productivity, and high unemployment, factors that have impacted a stagnant per capita income. This situation has led to questioning the foundations on which the Spanish economy is based. In recent years, the willingness for change has found support in European funds. Signs of improvement in the productive model have begun to be observed, mainly in the diversification of the production structure. The reduction of dependency on sectors such as construction and tourism has been a significant advancement. The expansion of renewable energies, the positive performance of non-tourism services, and the relative resilience of the industry compared to other European countries are factors that have contributed to a greater resilience against possible crises. Despite these advancements, the main characteristic of the Spanish productive model persists: growth is mainly based on the incorporation of labor force, with a residual improvement in productivity. Although a more solid growth has been observed compared to previous economic cycles, structural unemployment remains high, indicating the need for a deeper transformation in the labor market. The most recent data shows that productive investment continues to lag behind pre-pandemic levels. Despite a rebound, investment has grown below other components of GDP and European countries like Sweden, a leader in productivity. Spanish companies have surpluses that are not fully utilized to increase productive capacity, creating room for deleveraging or accumulating assets instead of investing in the business. Although there has been an increase in corporations' disposable income, investment has not followed the same pace, leaving companies with significant financial savings. This situation contrasts with countries like Sweden, where the volume of investment exceeds corporations' disposable income, leading them to resort to external financing to invest. A possible moderation in the volume of financial savings, along with the prospect of a decrease in interest rates, could stimulate investment in Spain. The Bank of Spain has detected a slight upturn in credit demand, which could be a positive signal for investment in the country. However, there is still no perceived turning point in the Spanish productive model or a significant qualitative change as a result of European funds. In conclusion, the shift in the productive model in Spain remains a pending task. Although steps have been taken in the right direction, there is a need for greater impetus in productive investment, improvement in productivity, and reduction of structural unemployment to achieve a more solid and sustainable model in the long term.