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Valencian Community closes gap with Spain in innovation intensity

Investment in R&D and Innovation is a key variable for a country or region’s economic growth and thus also for achieving a higher level of well-being. Since the start of the economic crisis in 2008, the Spanish economy’s investment in innovation has declined, causing Spain to fall further behind the euro area in terms of its ratio of R&D and Innovation expenditure to GDP (“innovation intensity”). Although the Valencia region’s innovation intensity has also declined, the decline has been less pronounced, with the result that the gap with the rest of Spain has been reduced from 0.7 to 0.4 percentage points.

The lower investment in innovation is part of the reason why the productivity of the Valencian economy remains 4.3% below that of Spain as a whole. To become more competitive, the Valencia region will, therefore, need to invest a larger percentage of its GDP in R&D and Innovation. Both the public and the private sector must play their part in this effort, as the evidence shows that the most productive countries and regions are precisely the ones whose companies invest most in innovation.