Spain’s Economy: Sectors, Challenges, and Solutions

Posted on Mar 23, 2025 in Geography

Spanish Economy: An In-Depth Analysis

Employment Distribution

The tertiary sector employs the highest percentage of workers, at 63%. The other two sectors experienced a decline, with a more significant impact on the primary sector due to the mechanization of agriculture. The secondary sector also saw a decrease, though to a lesser extent, because of the application of new technologies in the industry.

Modernization of Agricultural Activities

There’s a notable contrast between dry and irrigated crops. The deep processing of agricultural activities includes:

  • New techniques and new crops
  • Use of pesticides and fertilizers, and mechanization
  • Decrease in fallow land

Land Ownership

  • Minifundismo (small landholdings) in the north and east.
  • Latifundismo (large estates) in the south.

In the 1970s, a policy of land consolidation was implemented.

Restructuring of the Industry

  • In the early 20th century, there were only two cores for industrial development (Basque Country and Catalonia), with a predominance of small businesses.
  • Productivity was very low, and the bulk of exports were agricultural.
  • The last third of the 20th century began with the oil crisis, leading to increased unemployment.

Policies of Industrial Restructuring

  • Situations requiring rebuilding after an economic crisis.
  • In the early 1980s, the Law of Conversion and Re-industrialization was introduced.
  • The National Energy Plan and a structured plan for the shipbuilding and steel sectors were implemented.
  • All of this aimed to increase productivity and encourage technological development.

Technological Dependence

  • Despite being among the world’s leading industrial powers, Spain still exhibits technological dependence on foreign countries.
  • In the mid-1980s, efforts were made to overcome this deficiency, including the National IT Plan (PEIN).
  • The creation of technology parks (e.g., Boecillo Technology Park in Valladolid) has been promoted.

Spanish Industry: Key Areas

  • Four major areas: Catalonia, Madrid, Basque Country, and Valencia.
  • Various industrial cores: Zaragoza, Gijón, Seville, Vigo, and Valladolid.

Industrial Axes

  • The most dynamic is the Mediterranean axis (Almeria, Murcia, Valencia, and Catalonia).
  • Others include the Ebro axis (Catalonia, Aragón, Navarra, Rioja, Basque Country), and Madrid (extending to the periphery).
  • Isolated nuclei: Valladolid-Burgos, Seville-Huelva-Cadiz.

Tertiary Sector: Foreign Trade

  • Chronic deficit in Spain’s trade balance.

Strategies to Offset the Deficit

  • Tourism revenue.
  • Exports of agricultural products (e.g., citrus fruits).
  • Foreign capital investment in Spain.

Various Forms of Action

  • Tax breaks for exporters.
  • Increased contact with Spanish exporters abroad through sales offices in Europe and the Americas.
  • Promotion of quality control of products.

Currently, the situation is more balanced.

Spanish Tourism: Problems and Solutions

Problems

  • Foreign tour operators offer very cheap tourist packages, with much of the profits remaining abroad.
  • The economic level of tourists is generally low.
  • Spanish tourism is seasonal, except for the Canary Islands, which have a favorable climate year-round.

Attempted Solutions (“Second World Tourist Destination in the 21st Century”)

  • Independence from foreign tour operators.
  • Attracting upmarket tourism with a high economic level.
  • Reducing tourist seasonality.
  • Attracting Spanish tourists within their own country.
  • Avoiding increased environmental degradation.

Primary Sector

Subsistence Agriculture

  • Extension: Large areas of land, underdeveloped agricultural techniques.
  • Characteristics: Production is focused on survival, with products intended for subsistence. Rudimentary techniques are used, relying on manual labor, few tools, and very low yields.
  • Consequences: Very poor and underfed population, with almost no surplus for the market.

Market Agriculture

  • Extension: North America, Western Europe, Japan, Australia, New Zealand.
  • Features: Increasing sales and reducing production costs.

To Achieve These Objectives

  • Mechanization of agriculture.
  • Specialization in agricultural production.
  • Need for modern transportation.