Key Economic and Industrial Terms Explained
Key Economic and Industrial Terms
Agribusiness: Sector of economic activity that includes the various processes of transformation of agricultural products, irrespective of the industrial branch they fall under: food, textiles, energy, etc.
Multinational Company: A term used to refer to companies with factories in several countries. These factories are legally separate but linked to the decisions of the headquarters, which is located in another country. Eg. Ford.
ERDF (European Regional Development Fund): Structural Funds established to eliminate or mitigate the EU’s spatial inequalities in the most significant aspects. This funding allows the construction of reservoirs, dams, roads, and infrastructure.
R & D (Research and Development): A set of productive activities aimed at improving production processes following the introduction of new technologies. It is applied to the research industry.
INI (Instituto Nacional de Industria): Spanish state agency dedicated to propelling the creation of industries, or to revive those that, by their vital interest, are necessary to maintain capital. It was a state holding company that sought to industrialize the country with public capital. It was created in 1941.
Technology Park: A site occupied by industries and public and private companies engaged in scientific and technological research. The 3rd Industrial Revolution has forced the creation of these parks to attract firms with high technologies and support state, regional, and local initiatives, in order to attract foreign companies mainly in sectors that generate innovation. They have small plots, with quality buildings, and are well connected with telecommunications and computer networks. Highlights include del Vallés (Barcelona) and Tres Cantos (Madrid).
Industrial Estates: A space created to accommodate industry. The sites are located mainly on the outskirts of cities, along main roads and access to them, because the soil is abundant and cheap, and its activities do not disturb the inhabitants of the city. Proximity to the city benefits the industry because it provides manpower, a market, transport, training, research, and so on.
Productivity: Production capacity per unit of labor, cultivated land area, etc. The relationship between production and the quantities of each factor used to obtain it.
SME (Small and Medium Enterprises): Small (0 to 50 employees) and medium (51 to 250), which generates 81.5% of employment. This group includes most private companies. They have the advantages of greater agility to react to changes and submit to minor labor disputes. Instead, their products are more expensive and less competitive, not because their small size allows for economies of scale.
ZID (Declining Industrial Areas): Replaces the ZUR. They are repayable grants to support business investment exceeding 15 million pesetas, now also including utilities.
ZUR (Areas of Urgent Reindustrialization): They are framed within a policy of restructuring and re-industrialization that began in 1983. It aims to promote the investment needed to revitalize the industrial base and generate alternative jobs in those areas hard hit by job losses.
Hinterland: Area of influence.