SMEs: a key agent for industrial development in Spain

David Martinez, CEO of Proequity.

Madrid, 11 September 2023 Currently, the industrial sector in Spain is in a slowdown situation. This is mainly due to high energy prices, inflation and economic uncertainty that continue to seriously affect the economic outlook, as well as its development and growth prospects. In 2021, Spanish industry accounted for only 15.31 % of Spanish GDP, far from the 20 % forecast by the European Union.

Judging by the evidence, the loss of prominence of industrial policy in Europe has damaged the development and emergence of manufacturing in Spain, slowing its growth and contributing to its declining importance in GDP. Despite the fact that European industrial policy is of a "horizontal" nature and aims to establish framework conditions that favour the competitiveness of the sector, the measures that comprise it have been understood and applied, on numerous occasions, from a notable distance by companies and social agents. This has meant that their efficiency has been considerably reduced, making it difficult to select the most necessary and appropriate aid instruments.

Something similar happened in our country with the creation of the state of the autonomous regions in Spain. This began in 1979 and ended in 1995 and also led to a considerable decentralisation of public intervention aimed at promoting and developing the restructuring of Spanish industry. As the autonomous regions lacked experienced governments, few of them were able to adopt specific industrial policies, which contributed significantly to the decline of these measures. According to the Industrial Barometer 2022, only 12% of Spanish industrial SMEs reported having received aid from the Next Generation Funds, highlighting the lack of efficiency in this type of procedure. European funds are a unique opportunity for the transformation of SMEs towards a value proposition in line with technology and sustainability, adapting them to the current panorama and taking advantage, in short, of the potential they may have for the growth of industrial activity.

All these examples lead us to wonder about possible solutions for adapting both national and European measures to the needs of Spanish small and medium-sized enterprises, with the aim of boosting their growth and ensuring their viability.

Given that small and medium-sized enterprises make up 99.8% of nationally based organisations, it may be that SMEs are the key to a real recovery of the industrial sector. This not only comes down to increased funding, but also to a commitment to specialised training, talent, employment and promoting entrepreneurship in order to ensure their proper development. On the other hand, innovation and the incorporation of new ICTs that promote the implementation of new and modern business techniques should be even more important, as technological transition is a key aspect for business growth.

Along these lines, it is also necessary to promote an energy policy that guarantees an affordable and sustainable supply. To achieve this, it is important to have a logistics and transport infrastructure programme that will speed up the access of organisations established in Spain to international markets, increasing their export capacity. Furthermore, it is essential to develop industrial sustainability, promoting projects committed to safety and environmental protection through strategies to improve energy efficiency and the fight against climate change.

In other words, aware of the importance of industry in Spain, we must point to SMEs, another strategic asset in the national economy, as the most effective solution to reverse the figures and achieve growth in industry in our country. Although we have a lot of work ahead of us, thanks to a national strategy that is committed to SMEs in the industrial sector, we could succeed in harnessing their full potential so that they occupy a leading role in an increasingly changing and competitive market. As a result, we would achieve a reactivation of the sector, restore its downward trend, and reopen the possibility of positioning ourselves as a benchmark in industry at the international level.