Focus on NEX-LABS Best Practices in Spain: investing in Open innovation and competitiveness to ensure future growth of the ecosystem
During the past months, NEX-LABS project partners have worked with an incredible commitment to defining a list of their country-specific best practices which are helpful to build a resilient, sustainable, and inclusive Mediterranean ecosystem for water, energy and food security.
Best practices are a fundamental ingredient to building a catalogue which can be useful for policy building, as well as for improved local entrepreneurship and community resilience.
The survey conducted in Spain, was helpful in defining four features of the country’s sustainable development addressing water, energy and food nexus:
- Open Innovation
- SMEs and Entrepreneurs
- Digital and Sustainable
As mentioned by the Ministry of Industry, Trade and Tourism, Spain stands out in open innovation initiatives, from ICT to energy, finance and retail. Spanish corporations have the ability to combine the university’s educational and scientific efforts with the business ecosystem, since most of them have their own start-up programmes. We are talking of over 50 corporations with an embodied research centres (you may find a list at this link https://www.investinspain.org/en/innovation/R&D-centres), and Ninety of the 100 top companies in R&D have a subsidiary in Spain (Source: Thomson Reuters).
Innovation is gaining strength in the Spanish economy. According to data from the National Institute of Statistics (INE), Spain has recorded three consecutive years of investment growth in RDI, and a higher rate of growth than nominal GDP. The way that Spain attracts investments in its research development and innovation ecosystem is by leveraging on:
- Tax deductions and subsidies for RDI activities.
- Favourable environment for recruiting talent: Social Security contribution discounts.
- Surge in open innovation, led by major corporations.
- Secure environment for intellectual property protection.
- Growing innovation ecosystem: increase in patent registrations.
- Leader in use of open data.
Due to this effort and government support, Spain is regarded as a favourable environment for promoting knowledge and competitiveness. Also, Spain has talent devoted to innovation: 215,713 people participated in R&D activities in Spain in 2017, 133,195 of these being researchers. This represents an increase of 6,500 over the previous year, when R&D investment by companies was up 8.3%.
Surely fostering innovation and above-mentioned economic tools enhance the country’s competitiveness, not only at national level, but also international, through the enlargement of Regional Innovation Clusters and Hubs integrated with the Smart Specialisation Strategies.
The Regional Clusters (RC) seeks to establish an innovation ecosystem in the peninsula effectively open to all water energy, and food businesses, investors, researchers and other stakeholders to align innovation with the sector’s needs. To this end, it identifies and integrates Digital Innovation Hubs (DIHs) and attempts to enhance coordination and collaboration amongst them, Competence Centres (CCs) and Flagship Experiment Initiatives (FIEs) across the Iberian Peninsula and beyond.
The facilitation of the water, energy and food sector’s transition to the digital economy by establishing new projects and laboratories is one of its main goals, as well as ultimately establishing permanent, self-sustaining networks. This is to be achieved through the dissemination of results, the connection of regional agents and the promotion of relevant open calls. In short, the RC aims to establish an ecosystem which helps to participate partners with capacity-building in order to move forward on the digital transformation of the European water, energy and food sectors.
Another important best practice has been to provide capital and financing schemes to support Small Medium Enterprise development. Such schemes open new sustainability opportunities for businesses addressing water, energy and food challenges. The SME Initiative European Regional Development Fund (ERDF) 2014-20 OP run at EU Commission level had as objective to contribute to reduce the financial gap for small and medium-sized enterprises (SMEs). According to the ex-ante assessment by European Investment bank (EIB), the estimated interval for SME loan financing gap (2011-2012) is EUR 6 billion – 26.4 billion. Spain used the EUR 800 million to provide a financial contribution to an EU financial instrument managed indirectly by the European Investment Bank (EIB) group in order to facilitate the following:
- uncapped guarantees providing capital relief to financial intermediaries for new portfolios of debt finance to eligible SMEs and/or
- securitisation of: a) existing portfolios of debt finance to SMEs and other enterprises with less than 500 employees and b) new portfolios of debt finance to SMEs.
ERDF funding has been combined with a small amount of funding from the EU instrument 'Horizon 2020' managed by the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs of the European Commission and with senior risk coverage by the EIB group. The expected mobilized credits amount to a figure between EUR 3.2 billion and EUR 4 billion with a minimum estimated leverage effect of 4 times the EU investment.
According to Guide to do business in Spain there are also other aids to support SMEs addressing water, energy and food challenges, as an example, the following are enacted since 2022:
Empresa Nacional de Innovación, SME, SA (ENISA) Young entrepreneurs: Aimed at stimulating the formation of enterprises backed by young entrepreneurs (not older than 40 years of age), which are provided with the necessary financial resources during the initial phases linked to the formation of SMEs and Startups, so that they are able to make the investments required for the business project at such time, no guarantees require.
ENISA Entrepreneurs: Aimed at providing financial support to recently formed SMEs and Startups, promoted by entrepreneurs (of any age), so that they are able to make the investments required for the business project during its initial phase, no guarantees required.
ENISA Growth: Aimed at financing, no guarantees required, projects promoted by SMEs which envisage making competitive improvements or executing consolidation, growth and internationalization projects.
ENISA AgroInnpulso (ENISA Agro-Food Innovation Line) which is aimed at fostering the digital transformation of enterprises in the agro-food sector and the rural environment, endowed for the purpose with funds from the Ministry of Agriculture, Fisheries and Food and linked to the implementation of the National Recovery, Transformation and Resilience Plan.
Lastly, ENISA Digital Entrepreneurs is a new line aimed specifically at supporting and fostering digital projects undertaken by female entrepreneurs in order to reduce the gender gap in this area, thanks to funds from the Ministry of Economic Affairs and Digital Transformation, which will allocate €51 million to this area over the next three years as part of the National Recovery, Transformation and Resilience Plan.
The government has been promoting Industry 4.0 and digitization strategy to digitizing and ensure the competitiveness of the country’s industrial sector. Despite initial set-up as a public private partnership, Connected Industry (CI) 4.0 is driven by the General Secretary of Industry and SME. Next to the main industrial players, also experts belonging to tech companies, research and civil society are involved in CI 4.0. This Spanish government has allocated significant resources in ensuring that a Spanish model responding to the industry specific challenges is developed. Compared to related policies in Europe, the uniqueness of CI 4.0 concerns its particular focus on supporting the implementation of digital transformation projects by providing support to SMEs and micro enterprises as well as providing a personalized service to guide SMEs in this process. Meanwhile, developing a holistic model with the help of a wide range of stakeholders from different backgrounds has proven to be a key challenge in this policy initiative.
The main objectives of CI 4.0 are threefold:
- to increase the industrial added value and employment in the sector,
- to encourage the Spanish model for the industry of the future and
- develop the local supply of digital solutions and to develop differential competitive levers to promote the Spanish industry and boost exports.
To ensure further sustainability of the digitization initiatives, Spain invested in training programs to improve the competency level requested by markets, companies and society, including technological change and production methods. Other new investments have been published in 2021, with the Single Vocational Training System that Connects Training with Employment which is cumulative, flexible, capitalizable, accreditable and directly linked to the company. The Executive also promotes new anti-doping legislation in sports to adapt it to international standards and approves the State Plan for Science, Technology and Innovation Research 2021-2023.
Another requirement and investment needed is in infrastructure to attract investments and reduce the energy cost.
Such investments have been intensified after the coronavirus pandemic and the EU, to support the recovery and the digital and green transition of Spain. This additional funding under the European Regional Development Fund is added to twelve 2014-2020 operational programmes to help the health system fighting the coronavirus pandemic and to facilitate investments in the green and digital transition.
Finally, as most countries are moving towards circular economy, Spain has adopted a plan which can be further research at the following link: “ESPANA CIRCULAR” for the core sectors Construction, Farming, fishing and forestry, Industry, Consumer goods, Tourism, Textile and garment. The general principles which are the cornerstone of this Strategy, inspired by the European and Spanish legal frameworks, are the following:
- Protection and improvement of the environment.
- Preventive action. - Decarbonisation of economy.
- “Polluter pays” principle. - Health protection.
- Rationalization and efficiency.
- Cooperation and coordination between public entities.
- Public participation. - Sustainable development.
- Solidarity between people and territories.
- Integration of environmental conscience in decision-making .
- Increasingly competitive economy.
- Generation of quality employment.
The Strategy establishes the following goals for year 2030, all of which shall influence water, energy and food NEXUS:
- Reducing by 30% domestic material consumption in relation to national GDP, taking 2010 as a reference.
- Reducing waste by 15% with regard to 2010 waste levels.
- Reducing food waste throughout the entire food chain: 50% reduction per person in retail and households and 20% in production chains and supplies from 2020, thus advancing towards the Sustainable Development Goal (SDG).
- Promoting reuse and reuse enabling activities until reaching 10% of municipal waste.
- Reducing greenhouse gas emissions to under 10 million tonnes of CO2eq.
- Improving water use efficiency by 10%.
A successful example is given to us by the municipalities of Ripollet, Sabadell, and Cerdanyola del Vallès which use innovation hubs and living labs for engaging & activating citizens early in the changing process of building a circular economy. By doing so, municipalities let society feel that innovation programs and initiatives are theirs and ensure social cohesion and hedge against the risk of social rejection of such projects. Successful collaboration between different academia, industry and municipalities in Innovation Hubs motivates other municipalities to follow the same approach and enlarge current Hubs.
“Knowing what people are doing and joining efforts, with the resources available to move forward. Sometimes 1 + 1 is not two; it can be 4, 5, or 6. It is being noticed through different HuB that is generating a call effect to other municipalities who want to join the HuB and enlarge it” - Spain expert declaration during an interview with the NEX-LABS team
For further research, please consult:
Regional Cluster in agribusiness: https://www.smartagrihubs.eu/regional-cluster/iberia
Regional Cluster in Carbon Capture and Storage https://www.sciencedirect.com/science/article/pii/S030626192100814X#s0015
SME Initiative ERDF 2014-20 OP https://ec.europa.eu/regional_policy/in-your-country/programmes/2014-2020/es/2014es16rfsm001_en
Marchese, M. & J. Potter (2010), “Entrepreneurship, SMEs and Local Development in Andalusia, Spain”, LEED Working Paper Series, LEED programme, OECD. https://www.oecd.org/regional/leed/46970408.pdf
Spain: SME Initiative finances small and medium-sized businesses to the tune of EUR 3.2 billion, European Investment Bank (2017) https://www.eib.org/en/press/all/2017-128-sme-initiative-finances-small-and-medium-sized-spanish-businesses-to-the-tune-of-eur-3-2-billion
Spain: Industria Conectada 4.0, EU Commission 2017: https://ati.ec.europa.eu/sites/default/files/2020-06/DTM_Industria%20Connectada_ES%20v1.pdf
Digital Transformation Monitor Web page: https://ec.europa.eu/growth/tools-databases/dem/
Spanish Digital Agenda 2025 https://espanadigital.gob.es/sites/agendadigital/files/2022-01/Digital-Spain-2025-Exec-Summary.pdf
Single Vocational Training System that Connects Training with Employment https://www.lamoncloa.gob.es/lang/en/gobierno/councilministers/Paginas/2021/20210615council.aspx
Survey CEDEFP Adult learning https://www.cedefop.europa.eu/en/press-releases/spanish-adults-believe-investment-their-learning-should-be-priority
Spain's National Recovery and Resilience Plan 2021, EU Parliament https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/698878/EPRS_BRI(2022)698878_EN.pdf
REACT-EU: €382.7 million to help Spain's regions fighting the coronavirus pandemic and supporting a digital and green transition, EU Commission January 2022, https://ec.europa.eu/commission/presscorner/detail/en/IP_22_325
Spain to invest 6.9 bln euros in renewables, green hydrogen, energy storage https://www.reuters.com/markets/commodities/spain-invest-69-bln-euros-renewables-green-hydrogen-energy-storage-2021-12-14/
Living labs in Spain https://enoll.org/network/living-labs/?country=spain