Preserve What We Have: The Official State Gazette Is Not Enough To Generate A Business Network

spain business network

J.P. Marín Arrese | In our country, the somewhat simplistic view that the manna from Brussels will by itself work a miracle to rescue us from the pothole has spread. As if the return to a normal life depended only on a massive injection of funds. Having these resources will no doubt contribute decisively to cushioning the deep imbalance in our battered finances. It will also finance projects and investments for the future, such as digitalisation or the transition to a more sustainable productive activity. However, recovering the economic momentum will essentially depend on regaining levels of confidence after the collapse caused by the crisis. The contraction in demand, which has been shaken by a general feeling of insecurity, has caused more damage than the restrictive measures adopted to stop the contagion.

It will not be easy to recover lost ground. To a large extent employment has been saved from the flames in the short term thanks to public mechanisms to sustain workforces. But even if this is so, its future evolution will ultimately depend on the degree to which companies manage to recover from the havoc inflicted by the storm. This is more severe and more widespread than is commonly thought. The crisis has hit the different sectors unevenly, by destroying services such as tourism, leisure and commerce, which are so important for our country. But, in practice, all industries have suffered the shock of this devastating crash. Providing decisive support to companies facing critical situations or significant difficulties in getting back on track after the crisis is a key objective for recovery. However, the efforts deployed fall far short of what is desirable. There is little point in trying to sustain employment with public funds if, in the end, business weakness proves incapable of absorbing this labour force under temporary protection. Even less in generating new jobs.

Much is expected of future projects as a panacea. There are even calls for vast plans for reindustrialization. As if the Official State Gazette were enough to generate a business network. In general, it is good to support innovation as a tool to promote a modernisation of the economy. But, without ignoring current assets. These are the ones that support employment and a whole set of supplier companies. Often, the political leaders tend to bet on what is new, what is fashionable. They forget that preserving the existing productive structure, as long as it is not unfeasible in the long term, is the best strategy for economic development. Europe is now focusing on the objectives of digitalisation and the so-called green economy. These are undoubtedly niches for the future. In the past, it bet on information technologies without managing to bridge the gap separating it from economies such as the United States or China. Europe has witnessed a vast, relentless process of industrial relocation to Asian countries, without demanding respect for a minimum even playing field of trade.

Our country is a good example of this process. By relying on the protection against foreign competition provided by the services sector, we have neglected other productive segments. Trying now to recover lost ground seems to be mere wishful thinking. Especially when we consider the huge investments required to create an industrialisation programme from scratch. Even less so if we intend to lead the process from the governmental institutions, without considering that the leading role must always be played by the business class. For this reason, I have doubts about our capacity to absorb community funds for projects such as digitalisation, which require a solid technological base. It is the same for the ecological transition, whose full use and development requires an industrial infrastructure that we lack. For every euro invested in a solar energy farm, more than half goes to the panels’ manufacturer. At the end of the day, it is more important to preserve what one has than to venture into unknown territories.

About the Author

JP Marin Arrese
Juan Pedro Marín Arrese is a Madrid-based economic analyst and observer. He regularly publishes articles in the Spanish leading financial newspaper 'Expansión'.