Industrialization in Spain: 1855 to Present
Beginning of Industrialization (1855 – 1890)
Spain joined the first Industrial Revolution later than other European nations. Its poor endowment in some raw materials and energy, scarce entrepreneurship, limited available capital, and technological backwardness hindered its progress. Industrial policy was also inadequate. Despite this, Spain remained primarily an agricultural country but managed to establish some textile and steel industries.
Industrial Growth (1900-1936)
Industrial growth occurred due to several factors:
- Increased mineral exports and the rise of coal mining.
- Increased domestic investment.
- Public works promoted during the dictatorship of Primo de Rivera, which favored the development of industrial sectors.
- Protectionism and incorporation of the advances of the Second Industrial Revolution.
This strengthened the basic industry, diversified production, and improved living standards, encouraging consumer goods industries.
Regression During the Civil War and Postwar (1936-1959)
There was a regression due to the destruction of war and postwar autarky. Strong state intervention and exploitation of domestic resources were implemented. An industrial structure characterized by large state-controlled companies and small, inefficient factories with low production and low-quality-oriented consumption emerged.
As a result, in the late 1940s, Spain was still an agrarian country. In the 1950s, the European industrial boom and the agreement with the United States changed the picture. The possibility of importing raw materials and capital goods intensified, producing a huge increase in the deficit, which forced the abandonment of autarky in 1959.
Time of Development (1960-1975)
From 1960 to 1975, there was enormous industrial development due to the expansion of the capitalist world economy. Multinational corporations invested in new areas, an influx of capital from tourism, low energy costs, and state interest contributed to this growth.
Production of semi-capital goods and durable consumer goods increased, improving the technological level, leading to more production, quality, and competitiveness.
General Characteristics of the Manufacturing Sector
Basic sectors (refineries, petrochemicals, shipbuilding) were driven by the state in the Franco era through the INI (National Institute of Industry). The INI promoted strategic sectors requiring large investments and providing little return.
The consumer goods industries (textiles, footwear) increased production in the era of developmentalism.
The capital goods industries (machinery) developed less due to Spain’s technological backwardness. Their greatest growth occurred during the developmentalist period, thanks to the installation of multinational corporations.
Additionally, there were some advanced industrial structures:
- The production system adopted mass production, and there were many small factories using traditional production systems.
- Labor was plentiful and skilled.
- The size of companies was characterized by the contrast between small firms (low investment and outdated technology) and large firms (sparse, outdated, or linked to major multinational corporations).
- Finally, there was a great dependence on technology, finance, and external energy.
As a result, although Spain industrialized, it held a peripheral position in the global context.
The Impact of the Crisis Produced from 1975
External causes were related to changes in the global economy:
- Higher energy costs (oil) increased production costs.
- Exhaustion of the previous technological cycle and the beginning of a new one (the “Third Industrial Revolution”), based on new technologies and industries.
- Globalization of the economy and competition from Newly Industrialized Countries (NICs) altered the traditional location of industry, emphasizing the international division of labor.
Internal causes that deepened the crisis include:
- Structural deficiencies:
- High dependence on foreign sources (energy, technology, finance, and commerce).
- Insufficient technological modernization.
- Specialization in mature sectors, consuming more energy and labor.
- High indebtedness due to low self-financing.
- The historical juncture (Franco’s death, transition) raised uncertainty, reduced investment, and delayed anti-crisis policies.
As a result of the crisis, many businesses closed, production fell, profits decreased, debt increased, unemployment rose, and the industrial contribution to GDP decreased, consolidating Spain’s peripheral position worldwide.