50 years of FORAN in continuous reinvention - December 2014 - No. 48 /Tribune

Innovation: our companies’ greatest ally

Cristina Garmendia, President of the Cotec Foundation for Technological Innovation.

Cristina Garmendia, President of the Cotec Foundation for Technological Innovation.

Cristina Garmendia, President of the Cotec Foundation for Technological Innovation.

The long financial crisis that we have suffered (the effects of which we continue to suffer today in Spain) has proven the unsustainability of an economic model based on speculation and activities that generate little value. This has prompted an urgent need to find a new growth model that puts innovation at the center of our economy, recognizing it as a key factor in creating value on the basis of knowledge.

Fortunately, many Spanish companies –whether they operate in high-tech industries such as aerospace, engineering, biotechnology and ICT, or in more traditional sectors– have realized that innovation is their greatest ally when it comes to survival in an increasingly demanding global market. In recent years, such companies have been capable of opening markets and growing, despite the severity of the crisis.

These companies are the seeds of the new, modern production system that our country needs. However, at the moment this system comprises a mere drop in the ocean that is the Spanish economy and is barely visible to the public eye. According to the latest data collected in the 2014 Cotec Report on Technology and Innovation in Spain, there are less than 12,000 companies investing in R&D of which only 4,500 have R&D departments. And, although between them they generate a turnover equivalent to half of the Spanish GDP, their spending on R&D only amounts to 0.69% of the GDP, compared to the average of 1.22% in EU-28, 1.51% in China and 1.95% by companies in both Germany and the US.

For the last 15 years, a huge amount of material and human resources have been dedicated to helping this new production system take root and grow. It is a system that has certainly moved on from the one which made the growth of our economy possible, with cumulative annual rates of more than 10% in both the public and private sectors. The main challenge we face now is to foster the necessary conditions to sustain it and make it grow as fast as possible.

One of the most important activities that we have started at Cotec this year, and in which I have become involved with great enthusiasm since I was elected to chair the foundation last June, has been the development of “Spanish Innovation in 2020” report. This document, which is currently under discussion with the main agents of the Spanish innovation system, identifies the qualities that Spanish innovation needs to have in order to become the driving force behind our economy by 2020.

In the paper, we point out that Spain needs to adopt the same objectives as the rest of the European Union by allocating 3% of the GDP to R&D by 2020 and achieving two thirds of spending by companies and the remaining third by the Administration. This means that Spanish companies would have to dedicate 24.8 billion euros to R&D in 2020, while in 2012 they spent little more than 7 billion. To make up this difference, an annual growth of 17% is necessary — a titanic effort that may seem unattainable now, but that should nonetheless spur us on to accelerate our rate of improvement.

In the document we emphasize that research must be more orientated towards business needs: one of the main challenges facing the new innovation system. We also identified some core weakness of the public R&D system, which suffers from a fundamental lack of management and professionalism in the transfer of technology, a lack of awareness by companies concerning the capability of the public R&D system to solve their problems, the small size of research groups, and a scarce number of senior researchers dedicated to transfer activities.

With regards to companies, we aim to boost their growth. A huge part of the success of our medium and large-sized enterprises resides in their ability to innovate in a systematic way. Our smaller companies need to be able to grow in order to compete in a globalized world, and to do so we need to move forward with a financial system that understands innovation and allows companies to flourish. We also need to improve training and to incorporate more qualified profiles to increase their technological capacity; to promote the creation of technology-based companies; to place more emphasis on becoming international; to devise financing formats that lower financial risk and facilitate private investment in innovative projects; and to reduce administrative obstacles.

These are complex challenges that require a long term and truly collective commitment from the public administration, the scientific community, universities and businesses. A commitment that enables us to clearly establish the objectives and time frames of the public and private actions necessary to strengthen our innovation system and correct its weaknesses. Only then will innovation become the true driving force in our economic and social development.

Cotec Foundation

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