Spanish Industry (1855-1975): Evolution, Structure, and Policy
Spanish Industry (1855-1975)
1. Historical Evolution
a) The Start of Spanish Industrialization (1855-1900)
Spanish industrialization began with a delay. Several factors contributed to this, leading to discussions about the failure of the 1st Industrial Revolution in Spain:
- Poor endowment of basic raw materials and energy products.
- Limited entrepreneurial spirit.
- Scarce capital: individuals invested in land, and the state was indebted.
- Remarkable technological backwardness.
- Limited demand for industrial products.
- Unfavorable external situation due to the War of Independence and the loss of American colonies.
- Inadequate policies.
During the Restoration period, mining concessions were allowed in perpetuity, and protectionism was imposed.
b) Industrial Growth in the First Third of the 20th Century
Industrial growth was driven by:
- The rise of coal mining and the high cost of coal in other countries.
- The decline in mineral exports.
- Progress of the 2nd Industrial Revolution.
- Increased investment.
- Boosting national works.
- Protectionist policies.
c) The Civil War and its Aftermath (1936-1959)
Industrial growth was interrupted during the Civil War and its aftermath. The war caused the destruction of industries, and the autarkic policies of the postwar period, based on self-sufficiency and restrictions on imports, deprived the industry of necessary resources.
d) Industrial Development (1960-1975)
Enormous growth took place, driven by:
- The liberalization of imports.
- Expansion of the capitalist world economy.
- Spain’s advantageous location and low energy prices.
- State-encouraged industries through development plans.
2. Industry
Technical innovations from the 1st and 2nd Industrial Revolutions were adopted. These innovations spurred the growth of certain sectors:
a) Second Half of the 19th Century
The iron and steel industry (located in Andalusia and northern Spain) and the cotton textile industry were boosted.
b) First Third of the 20th Century
- Basic sectors were boosted by the Franco regime through the National Institute of Industry. Organized as a public company, it promoted strategic sectors requiring large investments and providing poor returns, which were not attractive for private investment.
- The consumer goods industry grew alongside the population’s standard of living, including the manufacture of durable consumer goods with higher added value.
- The equipment industry had less development, reflecting Spain’s technological backwardness.
3. Industrial Structure
a) Production System
Mass production was adopted, although small factories used traditional production systems.
b) Labor
Labor was abundant and unskilled.
c) Company Size
Small and large companies coexisted. Small companies had low investment, simple technology, and low competitiveness. Large companies were scarce during the 1st Industrial Revolution and were related to heavy industry. The 2nd Industrial Revolution saw the creation of large national companies and the establishment of subsidiaries of multinational companies.
d) Technological Backwardness and Dependence
Despite industrialization, Spain remained in a peripheral position in the global context due to technological, financial, and energy dependence.
4. Factors and Trends in Industrial Location
Industries located in areas with the greatest advantages to maximize profit by reducing costs. Location factors vary for different industries and over time.
a) Classical Factors
- Proximity to raw materials and consumer markets.
- Abundant and cheap energy.
- Ample and skilled labor.
- Good transport systems.
- Availability of capital.
- Infrastructure and industrial equipment.
- Government incentives.
b) Industrial Concentration
Industries tended to concentrate in large urban-industrial agglomerations where companies could benefit from external economies of scale: facilities for supply, transportation, and labor procurement.
5. Industrial Areas
a) Early Industrial Areas
- Areas with extraction and transformation industries related to bulky materials were located near the raw material sites.
- Port-based areas were located near ports for supply.
- Urban-industrial areas emerged in cities, within and near train stations, acting as breaking points for goods.
b) Franco Era and Beyond
- Earlier-established industrial regions consolidated their dominance.
- New industrial spaces appeared.
- Industrialization remained scarce in the rest of Spain.
6. Industrial Policy
a) Protectionism
Protectionism was established through tariffs or import restrictions, shielding Spanish industry from external competition.
b) Public Companies
Public companies were created.
c) Regional Development
Efforts were made to correct regional imbalances in the distribution of industry and promote industrial development. Various actions were undertaken:
- Development Poles: Inspired by French industrial planning, these aimed to industrialize backward regions. They were established in cities with an existing industrial base.
- Growth Poles: Implemented in the most deprived areas, requiring greater investment in infrastructure and subsidies.
- Other Measures: Preferential industrial location zones, preferential industrial sites, and large industrial expansion areas were created.
Industrial estates were created to ease congestion in large urban-industrial agglomerations.
The Cause of Industrial Restructuring
1. Causes of the Crisis
a) External Causes
- Rising energy costs.
- Technological change and the exhaustion of the previous technological cycle.
- Emergence of new industrial sectors, production systems, and demand characteristics.
- Globalization of the economy and competition from newly industrialized countries.
b) Internal Causes
- Structural differences in the Spanish industry.
- Historical circumstances (death of Franco, transition to democracy).
2. Policy Towards the Crisis: Industrial Restructuring
a) Industrial Restructuring
Intended as a shock treatment to ensure the medium-term sustainability of industries in crisis. Actions focused on matching supply and demand, and disposing of excess capacity. The affected sectors were mature industries. The results can only be assessed provisionally, as Spain’s integration into the EU led to a second restructuring.
b) Reindustrialization
- Technological modernization.
- Creation of new activities.
- Future Zones (ZUR) were created, resulting in increased investment and industrial diversification of formerly highly specialized areas.