Industrial Development Model and Spanish Industry in the EU
The Current Model of Industrial Development
The current model of industrial development represents a departure from the oil crisis of the mid-1970s, ushering in what has been termed the Third Industrial Revolution. This era has fostered new types of companies based on leading-edge technologies in computing, electronics, and related fields. Scientific and technological research and its application are paramount.
Uncompetitive companies often relocate to less developed countries to reduce production costs and increase profits, a phenomenon known as Industrial Deslocation (ID). Location factors for these new companies include proximity to universities and technology centers, efficient communication networks (trains, planes), and robust telecommunications infrastructure.
The application of new technologies, telematics, and improved communications enables companies to transmit information and increase trade in goods and people. This has allowed companies to automate production processes, particularly through robotics, reducing labor needs, fragmenting production processes, and facilitating real-time communication between different company establishments.
This new type of company prefers to reduce labor, increase technological investment, and hire advanced specialists in design and marketing. Many companies now outsource operations, deriving progress and services that were previously performed in-house.
Industrial policy has evolved in recent decades. Many European governments, including Spain, initially believed in protectionism. However, the prevailing view now is that industrial isolation is a flawed strategy, and market liberalization is the general trend. This prompted Spain in the 1990s to implement an industrial policy of selling public companies or parts of industries with public funds and then privatizing them, aiming to encourage development and competitiveness through private capital.
The Spanish Industry and the EU
In 1985, Spain joined the EU and began applying its rules and measures. Spanish industry had to adapt to EU guidelines. The objectives regarding the secondary sector include promoting investments in Research & Development (R&D), increasing productivity, promoting internal market relocation, and facilitating new EU countries to avoid external consequences.
- The elimination of tariffs between EU states meant that industrial products from other countries could be sold in Spain without additional taxes, increasing competition and prompting many companies to improve their technology and adapt to the market.
- The entry of foreign capital allowed the purchase of existing businesses, helping these companies overcome crises and increase their production and profitability. However, Spain’s industrial structure, based on the predominance of Spanish SMEs, sometimes made them uncompetitive and vulnerable.
- The possibility of receiving financial aid from the EU provided support for development.