Spanish Industry: Characteristics and Challenges

Spanish Industry: General Characteristics

This section outlines the key characteristics and challenges facing Spanish industry.

1.1: Shortage of Raw Materials

Spain is deficient in raw materials of organic origin. Despite a variety of subsurface materials, their scarcity and poor quality necessitate imports. Spain must import most minerals, with only industrial rocks available in surplus for export.

1.2: Energy Deficit

The production and consumption of energy have experienced continued, spectacular growth since the 1960s. To secure the necessary energy for the country's operation, due to limited primary resources and a lack of domestic oil reserves, Spain must import oil, gas, coal, and electricity. The level of supply, therefore, is very precarious and demonstrates fragility and dependence on foreign energy.

1.3: Renewable Energy

Although renewable energy sources are on the rise, they do not even account for 10% of Spanish energy consumption. Spain possesses very favorable conditions for the utilization of solar, wind, and tidal energy.

1.4: Late and Unbalanced Industrialization

Industrialization started late compared to most industrialized countries, concentrating only in certain areas like the Basque Country, Catalonia, and Madrid. Meanwhile, other areas such as Extremadura and Castilla-La Mancha have experienced very weak industrialization. Sectorally, there has been an imbalance, with basic industries and consumer goods always predominating over capital goods.

1.5: Structural Problems

• Inadequate Company Size: Most companies are Small and Medium-sized Enterprises (SMEs). While these react with greater agility and flexibility to changes, their products are often more expensive and less competitive. Large companies are few and lag far behind the European Union.
• Scarce Research and Development (R&D): Investment in R&D is very small. Although investment in R&D has increased in small companies in recent years, overall levels remain low.
• Backward and Dependent Technology: Spain creates low-tech products; it imports a lot and exports little. The consequences are lower productivity and quality, increased product prices, and reduced competitiveness.

1.6: Industrial Policy Subject to the European Union

After joining the European Union, Spain's industrial policy follows EU guidelines. Community policy incorporates measures and actions set out in the Framework Programs. Currently, the main objective is to improve competitiveness, mainly through funding research, technological development, demonstration, and innovation, carried out under transnational cooperation between companies and research institutions of the EU and third countries.

The effects of European integration on Spanish industry include:

• Strengthening of industrial conversion.
• Tariff disarmament.
• Arrival of grants and subsidies to support disadvantaged sectors or areas.
• SME programs that help correct internal imbalances and create new industrial spaces.