ZUR Investments and Industrialization in Spain: Regional Impacts

ZUR Map and Industrialization Metrics

Map of the ZUR. It represents the degree of industrialization in the 83-ZUR from quantitative data (k 90). Map circles are used to locate the degree of development of each province during the reindustrialization. It uses colors to represent the percentage of the map subsidized. Investments provides the number of projects undertaken in each ZUR. Source: Investments is composed by Molinero, N.O. Méndez and scale.

ZUR Creation and Purpose

The ZUR were created before the industrial crisis of 1975 in order to create new activities that generate employment and diversify industry. To be created in 1983, ZUR were implanted in Galicia, Asturias, the Nervión area, Barcelona, Madrid and Cádiz Bay. Businesses established in ZUR could receive tax incentives and financial subsidies for hiring new workers, provided they generated employment and were viable.

Regional Investment and Employment Data

Regional results (selected):

• Barcelona: 10–15% of eligible investments subsidized; total investments of 757 million; enabled the development of 275 projects and 8,054 jobs.
• Madrid: 15–20% subsidized; 490 million in investments; 72 projects and 4,241 jobs.
• Nervión area: 15–20% funded; 322 projects total; 104 million investment and 2,901 jobs.
• Bahía de Cádiz, Asturias, Galicia, etc.: see map for detailed percentages and figures.
• Ferrol: 20–23% subsidized and 72 million in investments.

Although the program created over 20,000 jobs and 800 projects, the figures were lower than expected. Moreover, the main benefited areas were Barcelona and Madrid, while the rest of the development areas performed lower, which accentuated regional differences.

Results and Policy Effects

The results obtained and Spain's entry into the EU modified the endogenous industrialization policy that had been based on potential locational advantages and geographic scope. While investment increased and some industrial diversification occurred in previously highly specialized areas, there were also clear insufficiencies: the ZUR generated less employment than expected, and aid tended to flow to large companies, reinforcing regional imbalances because Madrid and Barcelona attracted most projects due to the weaker attractiveness of other areas.

Conclusions

To conclude, we can say that as a result of the ZUR the investment grew and industrial diversification occurred in formerly highly specialized areas. However, insufficiencies were evident: they generated less employment than expected, and aid concentrated in large firms, which accentuated regional imbalances as Madrid and Barcelona received most of the projects while other areas remained less attractive.