This document summarizes José Molero's presentation on how intermediate countries like Spain can take advantage of digitalization opportunities. It finds that while Spain has some technological capabilities, it lags in areas like high-tech industry weight, firm size, ICT use, and public vs private R&D investment. It also has deficits in knowledge flows from abroad in areas like high-tech trade deficits, royalty payments, and international collaboration. The document calls for policies to strengthen education, vocational training, labor markets, public-private coordination, and the credibility of innovation strategies to help Spain upgrade technologically and recoup lost time in digitalization.

1. José Molero
Instituto Complutense de Estudios Internacionales
Universidad Complutense de Madrid

2.  We shall not address digitalisation as a whole, but
industry
 It is not a technological analysis but a reflection
from the Political Economy perspective
 My basic question is: How to take advantage of this
window of opportunity in an intermediate country?
 Suddenly the issue of the System arises, mainly
interactions between actors and institutions
 I wonder whether there is an amount of uncritical
optimism
 An old learning: a key factor is the combination of
new technologies and institutions with already
existing ones

3. Basic-
structural
conditions
Technological
capabilities
Complementary
Assets
Institutions
and Policies
Foreign
International
Context

4.  Industrial decrease
 Little weight of technology intensive
sectors
 Small size of firms
 Critical presence of foreign capital
in determinant sectors
 Heritage of oligopolies linked to
State policies
 Less use of ICTs technologies

5. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Weight of types of sectors according to technological intensity
Spain (%)
Hight technology Medium-Hignt tecnology
Medium-Low tecnology Low Technology

6.  Innovative enterprises in Industry
 Investment in technology by innovatory firms
 International comparison
 Technological advantages and disadvantages
 How to evaluate emerging technologies and give
priorities
 The technological cycle and differences for policies

7. 0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Switzerland
Germany(until1990formerterritory…
Luxembourg
Belgium
Ireland
UnitedKingdom
Austria
Iceland
Norway
France
EuropeanUnion(15countries)
Netherlands
Finland
Sweden
Portugal
Greece
Denmark
EuropeanUnion(28countries)
Italy
Slovenia
Lithuania
CzechRepublic
Cyprus
Malta
Croatia
Spain
Slovakia
Estonia
Bulgaria
Hungary
Latvia
Poland
Romania
Series1
Percentage of innovatory firms (2014)

8. Innovatory
firms. Total
% of
innovatory
firms
Innovation
intensity (%
sales)
Overall
industry 7,061 23.18 1.14
Spanish
Innovation
Survey 2015

9. 0
0,5
1
1,5
2
DK DD DA DN DC DG DG DJ DG DK DB DM DH DI DG DK DE DK DK DM DK DL DL DL DL DL DA DF DL DL DL DL DL DL DL DL DL
RevealedTechnology Advantagein Spain
2008-2012
Intensive advantage Moderate advantaje Moderate disadvantage Intensive disadvantage
DA
Manufacture of food products and
beverages
DB Manufacture of textiles
DC Tanning and dressing of leather
DD
Manufacture of wood and of
products of wood and cork
DE
Manufacture of pulp, paper and
paper products
DF
Manufacture of coke, refined
petroleum products and nuclear
fuel
DG Manufacture of basic chemicals
DH
Manufacture of rubber and
plastic products
DI
Manufacture of other non-
metallic mineral products
DJ Manufacture of basic metals
DK
Manufacture of machinery for the
production and use of
mechanical power
DL
Manufacture of material and
electrical, electronic and optical
equipment
DM Manufacture of motor vehicles
DN Manufacturing n.e.c

10.  The creation of domestic capabilities is not
independent from the capacity to incorporate, learn
and integrate knowledge coming form overseas in
different ways
 Spain growingly integrated in international flows of
knowledge. In the last two decades particular
attention to be pay for: foreign trade (exports) and
outwards FDI.
 However some critical aspects have to be taking
into account. To follow this is useful the “old”
distinction between embodied (trade, FDI
spontaneous cooperation) and disembodied
technology (licenses, patents, technological
agreements, formal cooperation)

11. Foreign trade:
 The most challenging data is the deficit in high
technology products. According to the last figures
(2014), while the Spanish exports cover 90% of the
imports, in HT product, the coverture is much lesser:
57%.
 Particularly important are those related with ICTs. Office
machinery and computers (19.6%); Electronic equipment
(26.5%); Scientific instruments (41.7%) and Electric
Machinery and Materials (37.8%)

12. FDI:
 In the last decades Spain has reached a new
position with outward FDI overcoming inward one.
 The most challenging aspects are the followings:
◦ In 2014 MNEs R&D activity in Spain was 37.04 % of total
business R&D (in practical terms is higher). But this is in a
very asymmetric position because while for Spanish
economy this is a great amount (in a country with low
business R&D), just in few occasions that activity is crucial
for the global MN group.
◦ As has been found in recent studies, that foreign presence
is also important in HT sectors. However, this has not been
enough to upgrade the Spanish international position in
those sectors (Molero & García, 2008; García, Molero and
Rama, 2016)

13.  Spanish deficit in Royalties. In 2015
◦ Receipts.1,457 M€; Payments 4,077 M€ (35,7 % coverage).
◦ Moreover, one of the countries in which the growth of
receipts is slowest
 The weight of domestic patents versus foreign
ones is one of the lowest in OECD area
 International collaboration: bigger in scientific co-
publications smaller in co-patenting

14.  Education and training:
◦ Little attention to secondary education
◦ Necessary radical change in University, including social
sciences (Management, impacts, assessment…)
◦ Deficits in Vocational Training
◦ Deficits in Long Life Training
 Excessive dependence on public resources: the
necessity of more and better financial mechanisms
 Labour market:
◦ Lower active population
◦ Old fashion concept of flexibility. Permanent learning for a
new flexibility framework
 Regulation: Sustainability and credibility

15.  Advances and stagnation in innovation
policies: the necessity of a new State strategy
 The particular case of Public Budgets: 2016,
66% with respect to 2009
 Inter ministries coordination
 Inter territorial coordination (regional
governments)
 Little impact assessment of policies
 Uneven internationalisation: excessive
concentration in Europe

16.  The necessity of moving the Wheel from all axes; not
just from one (eg, size of firms; R&D&I investment,
financial resources, education and training and so on)
 We need a new way of making policies, more
articulated and coordinated
 But above all, credible: We need the topic to be in the
center of the political agenda. Simple declarations or
Power Point presentations are not enough
 If we work hard, it is not impossible to recuperate the
lost time; nevertheless it is not easy either
instantaneous
 Examples: size, HT sectors promotion, ICTs use,
Innovation investment and policies, Labour market,
education

17. THANK YOU!
José Molero
jmolero@icei.ucm.es