1. Competitiveness: The Basque
Country Experience
12th INTERNATIONAL CONFERENCE
ON COMPETITIVENESS
Donostia- San Sebastian 10 July 2008
ALBERTO ALBERDI LARIZGOITIA
Good morning everyone. It is a pleasure for me to participate in this
Conference; and first of all, I would like to take the opportunity, on behalf
of the Government, to welcome you all to the Basque Country.
The Government’s contribution here, with my presentation and this
afternoon’s presentation on clusters, should be understood from the point
of view of practitioners and our cooperation with the Basque Institute of
Competitiveness, who I would like to thank for the organization of this
event.
Why study the experience of The Basque Country? First of all, it is just
another case in the regional sphere and as such, it may be representative.
However, it is also a success story. We are not the only ones to say
this…. it has also been recognised by Michael Porter
1

2. “The Basque Country is one of the
few regions in Europe that has made
significant progress in upgrading
its traditional industrial base”
Michael E. Porter
2
And not only by Porter. International interest in our experience has grown
recently, including that of the OECD, which is reflected in the visits we
receive and surely by the fact that this conference is being held here.
We study experiences in order to learn and apply the knowledge acquired.
For this reason, I believe that there are two key questions in any
experience: one concerns strategy and the other deals with idiosyncrasy.
As far as strategy is concerned, it is relevant to know whether the success
was due to deliberated strategies or whether they simply happened.
Henry Mintzberg, the great debunker of strategy, says that the strategy
implemented is the result of two forces: deliberated strategy and the
emerging strategy. The result is always a combination, because
predominance of the former would imply a lack of learning and
predominance of the latter implies a lack of control.
The second key question, is related to the presence of singular elements -
idiosyncrasies- which are difficult to copy but have a decisive influence on
results.
I do not intend to provide definitive answers to them both. I mention them
because they were in my mind whilst preparing this presentation and I
suggest that you should take them into account.
2

3. A LONG TERM VIEW 1980-2006
Contents 1. Macroeconomic Context
2. Institutions and Public Policies
3. Industrial Policy
4. Technology Policy
5. Energy Policy
ECONOMIC RESULTS
6. Main Indicators
7. Exports: Share and Sophistication
8. Productivity and Labour Costs in the Industrial
Sector
9. European Innovation Scoreboard
10. The Second Great Economic Transformation
NEW STRATEGY FOR COMPETITIVENESS 2015
11. Competitiveness Model
12. Open Innovation
13. Technological Strategy
14. Size and Groups for the Global Economy
15. Strategic Objectives and Results
16. Internationalization of Basque Groups
FINAL REMARKS
3
Therefore, I wish to commence my presentation with an initial section that
talks about context, institutions and policies, which I feel reflects the
influence of these two key questions.
In the second section, I will present some economic results that have also
been used as a diagnosis to tackle the New Strategy which is described in
the third part.
3

4. 1 A long term view
1980-2006
4
Let´s take a look at a long term view from the eigthies to the present
4

5. 1.1 Macroeconomic Context
GDP per capita market prices 1980-2006
MACROECONOMIC FRAME: Institutions and Economic Integration
Source: Eustat, Eurostat and ow n 2002. The Basque C
euro
EU 27
1998: Set up of
28000 1989-91 Strong BCE and
apreciation of the definitive rates
rate of exchange of exchange
(peseta)
1994 Second phase
23000 Monetary Union
1986 Integration
in the European 1996-2006 Creation
Economic of 270,000 new
18000 Comunity jobs (38%
increase)
1980 New Convergence in GDP per capita
Institutional at market prices
Framework
13000 Statute of
Autonomy 1992-1993 Deep Recession:
65.000 jobs lost
8000 1982-1986 Sharp Increase of Public
Spending and public policies
1980-85 Industrial restructuring
3000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Basque C 3132 3545 3980 4371 4890 5448 6132 6969 7952 9046 9993 10700 11383 11754 12600 13635 14573 15653 17108 18537 20030 20968 21870 23246 25090 26835
EU 27 14600 15400 16200 16900 17800 19000 19700 20400 20700 21600 22400
5
Competitiveness is a micro question, provided that the macro
fundamentals are good and the same for everyone. However, as we can
see here, the macro context is rarely the same for everyone, even within
the same monetary area.
Here you can see some historic events, institutional changes and related
economic results and actions. In general it can be said that the process of
economic integration has been an extraordinary catalyst for the growth of
the Basque economy.
But macro-economic policies had highly visible effects on the growth
trend for the good and for the bad. An example of the second: the poor
policies of the 1980’s worsened the crisis at the beginning of the 1990’s;
contributing to a deep recession in which employment fell by 8%.
Conversely, the favourable peseta/euro exchange rate to access the final
phase of the monetary Union had a positive impact on the foreign sector,
which tripled exports in eight years and led to the decade of employment,
which increased by 38%.
5

6. 1.2 Institutions and Public Policies
BASQUE GOVERNMENT PUBLIC POLICIES
Statute of Autonomy 1979- Spending as % of GDP 1981-2002
Institutional wealth. 1981-1989 1989-1998
1998- Fiscal consolidation
Preparing for the EMU.
Own treasury, collecting most 16
Econom ic restructuring, Infrastructures,
New technology policy
new policies and social policy and 18. Public Debt
of the taxes and strong increasing expenditure increased debt
15 17. Tourism and C ommerce
spending capacity
14 16. Business Promotion
New welfare net: Universal 13 15. Agriculture and
Fisheries
Health, Education, Housing,
14. Economic Regulation
Basic Income and social services 12
13. Research
11
“Europe 93” “Euskadi XXI” and 12. Other Infrastructures
10
“Euskadi 2000Tres” three Plans 11. Transports and
communications.
for Infrastructures and social 9
10. Basque language
cohesion
8
9. C ulture
7
Strategies and plans on Cities, 8. Housing, Territory and
Enviroment
Territory and environment: the 6
7. Justice
success of Bilbao
5 6. Education
4 5. Health
Industrial Policy: Restructuring,
3 4. Social
promotion, land, energy,
clusters, technology, 2
3. Welfare and Social
Assistance
internationalization and 2. Security
1
information society
1. Administration
0
6
Apart from macroeconomic context, institutions and policies as a consequence of the
process of devolution is the other key question I was referring to.
A public sector with enormous institutional wealth, (Government+ Councils+ Town
Halls), high tax independence and expenditure capacity was created with the
Statute. Actually current income rose from 4% of GDP to 24% and investment
reached 6% of GDP.
Besides, an advanced social welfare network was built with subjective universal
rights for individuals in essential public services, (health, education, social
services…) and pioneering initiatives such as the set up of a universal basic income.
Important initiatives were launched, such as the three plans for infrastructures and
cohesion: Europe 93, with 1,076 million euros, Euskadi XXI, with investment of
1,436 million euros and Euskadi 2000Tres with 1,045 million euros and which took
public spending capital to 6% of GDP.
The entire territory was planned and revitalization strategies for cities and regions
were launched, among which the success of the modernization of Bilbao stands out,
based on cultural infrastructures like the Guggenheim Museum.
There was a commitment to industry and for building on the existing fabric,
maintaining in a sustainable way a series of industrial policy actions ranging from
restructuring, promotion, industrial land, technology, energy and the information
society.
6

7. 1.3 Industrial Policy
www.politicaindustrialvasca.net
7
Competitiveness essentially depends on all of these policies deployed over 25 years;
but it is obviously necessary to pay special attention to the industrial policy, in which
two periods can be differentiated
RESTRUCTURING in the 1980’s–
In light of the serious industrial crisis and high unemployment, both the State and
Basque Governments established instruments and subsidies for the restructuring of
companies and social adjustment (in addition to unemployment benefit, recycling and
relocation of workers, etc.)
Special aid plans for the re-launch of viable activities were also introduced.
COMPETITIVENESS AND DIVERSIFICATION: End of the 1980’s
Once the worst part of the crisis was overcome and with growth brought about from
European integration, policies were deployed with full intensity and diversity of lines:
-Development of venture capital for the diversification of production.
- Support for investment in job creation through subsidies and industrial land policy.
-Priority Clusters Policy: towards competitiveness through cooperation
-Fostering of total quality EFQM in the industrial sector, with the Euskalit
Foundation, which has led to significant positions in Europe.
--Commitment to endogenous development: support for technological and
development projects in new sectors such as biotechnology.
-Promotion of internationalization in the broadest sense, from initiating exports to
overseas plants.
7

8. 1.4 Technology Policy
www.politicaindustrialvasca.net
1980‐1996 1997‐2005 2006‐ 2010
ORIENTATION
OFFER POLICY OFFER AND DEMAND
TOWARDS RESULTS
COMBINATION POLICY
POLICY
The basis for the actual Science and Technology Consolidation and orientation of Business diversification,
network were established the Basque S&T towards the social competitiveness
social and business needs
SCIENCE,
TECHNOLOGY
AND
INNOVATION
PLAN
2010
bio BASQUE
nanoBASQUE 2015
1982 1990 8 1997 2005 2010
However, there is a line of industrial policy which has been decisive in the case of the
Basque Country, namely the technological policy, which to a large extent is a
logical consequence of a competitive strategy focused on industry.
We can also identify different stages here. We can define the first one as a SUPPLY
policy, in which the priority was to consolidate the bases of the Basque Science
and Technology Network. Technological Centres aimed at industry, R&D
business units and the three Technology Parks were promoted. Actually ,the
Technology Park of Bizkaia was the first to be built in Spain. In this period, public
policy management capacities were also created with a specific unit for
technology.
From 1997, and following the experience of the previous two plans, there was a
move towards a second stage which integrates supply and demand, so that
technological development is led by production requirements. Supply capacities
were consolidated but the demand of clusters and sectors were promoted and
research into emerging scientific-technological areas was initiated.
The development of the information society is incorporated into the public agenda,
and extraordinary progress was made despite a low initial position.
We are currently in the third stage in which it is necessary to consolidate and perfect
the aforementioned and advance along new lines, which I will mention later.
8

9. 1.5 Energy Policy
1982-1990 1991-1995 1996-2005 2006- 2010
SHOCK POLICY DEEPENING THE CONSOLIDATION PREPARING FOR A NEW ERA
STRATEGY AND BROADENING
Saving and efficiency Security of supply,
Development of
1st Diversification: natural gas and renewables Towards electric self- development of technology,
infrastructure for gas
sufficiency and Wind energy maturing renewables, and
and electricity
contributing to Kyoto aims
Wind Energy Plan Bahía de Bizkaia
2000 LNG Import Terminal and Combined Cycle
1st Landfill biogas plant 2003
CADEM EVE NATURGA 1993 Plant
ENERGY AND ENVIRONMENTAL
1981 1982 1987
S 1st Wind Farm Santurtzi IV
Gaviota field 2000 Combined Cycle Plant
Off-shore natural gas 2004 CIC EnergiGune
1986-1994 1st Buildings Certificate 1st Bio-fuel Plant Energy Research Centre
SGE SHE 1993
1982 1983 2003 2007
Gasification Plan in tertiary sector Privatization of Bizkaia Energy
1st CHP Plan 1988 2003
Naturcorp Combined Cycle Plant
1982-1987 Design of Energy Infrastructures 2005
Zabalgarbi Plant
POLICY
1995
Plan RSW Combined Cycle Euskadour
2005 Cross-border natural gas interconnection
2005
1st Energy Policy Plan Strategy 3E 2000
1982-1990 1991-2000 Mutriku OWC Plant
Marine Energy
Strategy 3E 2005 2009 (P)
1996-2005
Strategy 3E 2010
2001-2010
Actions Directed to Industrial Waste Management & Environmental Protection Basque Environmental Strategy
IHOBE Sustainable Development 2002-2020
1983
Environmental Environmental
Programme 2002-2006
Framework Programme 2007-2010
Framework
1982 = Index 100
1990 = Index 76 1995 = Index 72 1990 = Index 60
Energy Intensity
2006 = Index 66
INDICATORS
ENERGY
11%
16%
2% 9%
14% 5% 6%
25%
1%
Coal 4%
Energy Mix
Oil
Natural gas
Renewables 41%
Electricity Import
16%
61% 50% 39%
1982 1990 1995 2005 2010
9
As in the case of technology policy a special mention to energy policy is necessary
ENERGY POLICY:
• The Basque industrial crisis at the beginning of the 1980’s can not be separated from the
energy crisis due to several factors: the impact of energy prices, the high energy consumption
of our key industrial sectors and the high dependence on fossil fuels (coal and oil represented
86% of the energy mix).
• 1982-1990: beginning of a Basque energy policy based on improving efficiency,
diversification and renewable energies.A reduction in primary energy consumption of 13% was
achieved compared to 1980, significantly improving the industrial and global energy intensity.
• 1991-1995: consolidation of the strategy promoting cogeneration, technological development
in renewable energy, improving gas networks. The energy intensity had improved 28 points
compared with 1982, and natural gas represented 16% of energy demands compared to 1% in
1982.
• 1996-2005: intensification of efficiency programmes, incorporation of renewable installations,
increased electric self-sufficiency and environmental contribution of the Basque energy policy.
The energy demand was reduced by 10% over 10 years and energy intensity improved by a
further 14 points.
• 2006-2010. At present, the Basque mix has changed significantly: natural gas represents
39%, oil 41%, coal 6% and renewable energy 5%. Industry (46% of total energy consumption
in 2007) must continue to reduce its energy consumption and improve its competitiveness.
The remaining consumers must move towards more responsible energy consumption,
particularly as far as a more rational use of transport is concerned. In addition to intensifying
savings and efficiency, a new era has arrived in which it is necessary to develop new and
advanced energy technologies, increase renewable energy (wind and biomass), and
contribute to the fight against climate change.
9

10. 2 Economic Results
10
After this brief review to industrial policy let´s go to the second section and
examine some economic results
10

11. 2.1 Main indicators
BASQUE COUNTRY
THE FIRST GREAT ECONOMIC TRANSFORMATION
1986 1995 2006
1. GDP per capita (current prices) 6,132 13,635 23,600
2. GDP ppp Europe 15 =100 90 94 116
3. Labour market
Workforce 870,368 935,610 994,700
Employment 687,454 712,673 954,175
Rate 48.4 66.5
Unemployment
Number of people 182,914 222,937 40,525
Rate 21.0 23.8 4.1
4. Productivity Europe 15= 100 110.7 110.4
5. R&D expenditure % PIB 0.5 1.16 1.47
6. Energy intensity 100 72 66
7. Energy mix: oil % 61 50 41
8. Quality certificates 468 (1996) 4600
9. Internet access % population 2.5 (1997) 44.9
10. Visitors 986,021 2,007,548
11
I began my presentation by saying that the Basque Country was a success story. I
believe that the combination of indicators that are presented here justify this
statement.
The GDP in ppp has increased by 26 points over the EU 15.
According to the last figure de GDP per capita is 40% above EU27, after
Luxembourg and Ireland.
Employment has increased by 39% with a reduction in the unemployment rate from
over 20% to figures of almost full employment.
Productivity is 10% higher than that of the EU 15.
R&D efforts that were very low, have tripled
The energy intensity of the economy has been reduced by 34% and the importance
of oil has fallen by 20 points.
Finally, a new phenomenon of tourism has emerged, which has doubled the number
of visitors.
11

12. 2.2 Exports: Share and Sophistication
1200
EVOLUTION OF BASQUE EXPORTS COMPARED WITH OTHER Wo rld
COUNTRIES AND THE WORLD ECONOMY
1993-2006
1000 1993= 100
United States Export growth has been well
C HINA B razil above that of European countries
800
Euro pe and only surpassed by emerging
Germany countries like India and China
France
600
India United
Kingdo m
Basque C ountry
Italy
400
China
Japan Denmark
200 Sophistication of Basque Exports International
India Comparison Finland
26000
1993 2003 2006
Source: OMC , Eustat and own elaboration B asque
0 Co untry
France
24000
Germany
22000 Ireland
Italy
20000
Mexico
The sophistication index of 18000
Poland
Basque exports has converged
16000 Rep. of
with that of the European Union Korea
Spain
14000
Sweden
12000
Source: Minondo 2007 Turkey
(Ork estra)
10000 Basque
1996 2004 Country
UE
muestra
12
Besides to complete the table of indicators
To sum up, all these indicators justifies what has been called the First Great
Economic Transformation of the Basque Country.
12

13. 2.3 Productivity and Labour Costs in the Industrial Sector
60
PRODUCTIVITY AND LABOUR COSTS IN THE INDUSTRIAL SECTOR (143
European Regions) Stockkol
1995-2004 m
50
High labour
costs
Denmark
40 Ireland
Low Productivity
High Productivity
30
-10 10 30 50 70 90 110 130
BASQUE COUNTRY
20 77 de 143
10
Gross Value Added and Labour C ost at currente prices
Source: Eurostat and own elaboration
Low labour Costs
0
13
The evolution of the Basque economy has been extraordinary, but like everything in
life, there is always good news and bad news.
The good news is that we have become wealthy; the bad news is that we have done
so by working. Jokes apart, the real truth is that convergence has been supported by
employment rather than productivity, which in spite of being 10% above of EU 15 has
hardly moved in relative terms in recent years, and therefore there is a long way to
go especially if we look at European regions as a whole.
Industry, the true driving force of the economy, because its productivity is almost
20% higher than services, maintains a balanced position in unitary labour costs, but
occupies an intermediate position in the European productivity ranking estimated at
current prices.
With the extension of the European Union to the East and the appearance of
emerging countries, the are a lot of economies that are beginning a rapid learning
process based on the investment competitive phase, which we have just completed.
13

14. 2.4 European Innovation Scoreboard
300
GDPppp: UE 27= 100
Luxemburg
250
The Basque Country
occupies a higher position in
GDP than in the innovation 200
index
Basque USA
Country 150 Ireland
Sweden
Denmark
Austria
France Finland EIS: UE 27=0,45= 100
100
0,00 0,10 0,20 0,30 0,40 0,50 0,60 0,70 0,80
Check
Republic
50
Rumania
0
0,80
0,70
BASQUE UEU27
0,60
COUNTRY 0 45
0,50
0 37
0,40
0,30
0,20
0,10
0,00
RO LV BG PL SK PT EL HU LT MT ES CH EUS IT SI CZ EUS EE EU27 BE FR NL AT IE LU UK DE DK FI SE
05 07
14
We have already seen that expenditure on R&D of 1.47 was below the European
average of 2%. The same occurs with the European Innovation Scoreboard, which in
spite of having risen from 0.33 to 0.37 is below that of the EU 27 (0.45).
Even some emerging countries such as the Czech Republic and Latvia already enjoy
innovation indicators similar to those of the Basque Country.
The Basque Country occupies a higher position in terms of GDP per capita than in
Innovation, which means that competitive advantages from investment and
experience-based improvement processes (learning by doing, by Using, by
Interacting) have been fully exploited.
To continue moving up the competitive advantage ladder, the Basque Country must
move towards a new competitive phase based on innovation and linked to science
and technology.
Awareness of this need to change models was recognised by the President of the
Basque Government in 2001 in the following statement
14

15. 2.5 The Second Great Economic Transformation
LEHENDAKARI (President) Juan Jose Ibarretxe, July 2001
A society that has achieved the level of development that The
Basque Country enjoys today can no longer approach the future in
terms of the adoption of foreign technologies and cost advantages.
What it must do is tackle the challenge of innovation, quality and
knowledge creation head on.
•Following on immediately from this, he put forward the aim of what
became called the second great economic transformation of The
Basque Country, based on three factors:
1 2 3
Building the
Making The Broadening
Information
Basque Country Total quality
and
a European for managing
Knowledge
reference in organizations
Society
science and
technology
INNOVATION & KNOWLEDGE
15
15

16. 3 New Strategy for
Competitiveness 2015
16
From here, the Competitiveness Forum Euskadi 2015 was created, as a
participation instrument for all of the agents involved in industrial policy,
which aims to develop and update the new competitiveness strategy.
The Bases of the Strategy were developed in an initial stage and then the
Business Competitiveness and Social Innovation Plan was drawn up. A
little later, this was developed in greater detail, including technological
strategy with a new Science, Technology and Innovation Plan.
These two plans considered together represent the Competitive Strategy
of the Basque Country, which I am going to describe in general terms.
16

17. 3.1 Competitiveness Model
17
First of all, referring to the “competitiveness model”, as you can see, the model is
based on three axes: trained PEOPLE with new values, INNOVATION in business
and society and DIMENSION and GROUPS to compete in the global economy.
The People Axis has important implications on the whole area of Training, but is also
reflected in the other two axes and in the set of strategic lines.
The base of the triangle, also reflects other more indirect factors, but which are also
important for the competitiveness policy. As seen in the analysis of the previous
period, all of these policies are crucial. However, I am only going to refer to some of
the keys of the two central axes of the industrial policy, beginning with Innovation and
followed by Dimension.
17

18. 3.2 Open Innovation
•Broad concept: Innovation is about creating value not necessarily
creating things; it must include not only technological innovation (product
and process), but also organisational and marketing innovation
Principles
•Results orientation: the aim is to transform knowledge into market value
•Cooperation: External R&D is an important source of innovation
•Driven by demand: following the needs of companies
• Innova Enterprise: an Innovation agenda for every business no matter
what size or sector ( objective of 2.000 companies)
• Aldatu (Change): program for implementing non technological
innovation
New Tools and
programs •Innova Cooperation for defining and driving the R&D needs of clusters
and sectors.
•Etorgai: program for developing strategic innovation in cooperation
•New institutions (Innobasque, Ikerbasque, Basque Council) for
intensifying cooperation, attracting talent and defining policy
18
On the INNOVATION Axis the most important change is the idea of Open
Innovation
18

19. 3.3 Technological Strategy
TRADITIONAL SECTORS
NEW SECTORS BASED ON SCIENCE AND
Transforming sectors in which our TECHNOLOGY
economy is specialized Development of Scientific and Technological
capabilities for the creation of new sectors
SUPPORTING THE PRESENT SOCIAL
BUILDING THE FUTURE ECOINNOVATION
INNOVATION
ELECTRONICS ENVIRONMENT
NEW INDUSTRY HUMANITIES, SOCIAL
ALTERNATIVE FOR SCIENCES,
FABRICATION SERVICES BIOSCIENCES NANOSCIENCES
ENERGIES INTELLIGENT BIODIVERSITY
SYSTEMS ECONOMY
TRANSPORT METEOROLOGY
INTELLIGENT
HIGH i- TOURGUNE
EFFICIENCY ENVIRONMENT
MANUFACTURING BIOBASQUE NANOBASQUE ENERGYGUNE ISTGUNE ENVIROBASQUE
LANGUAGE
INDUSTRY SOCIAL
RESEARCH
NEW
MATERIALS COMMERCE
METEOROLOGY
FOOD SECURITY BUSINESS
AND TRANSFORMATION
ICTs CLIMATOLOGY
ENERGY
19
The technology policy has been also renewed, with two main strategies.
A strategy to identify the capacities of the innovation system, indicating the scientific
and technological areas that should be developed because they have a direct impact
on the competitiveness of the current economic base. In the case of the Basque
Country, the selection focuses on manufacturing and new materials, in food safety
and ICTs, as well as in the service sector ( commerce and tourism)
Another strategy is not only to support the present but to also build the future
diversifying towards new sectors committed to what is known as the science push.
Well developed examples are the cases of a bioscience sector (a knowledge
community with 300 researchers based around two Cooperative Research Centres
with business participation) and nanotechnologies (another community with 400
researchers).
Other Cooperative and Research Centres are being built in Manufacturing,
Alternative Energies and Tourism.
19

20. 3.4 Size and Groups for competing in the Global Economy
Cultural change and training for nurturing
entrepreneurship
Better support: BICs:, finance, seed capital
Entrepreneurship Developing a model to foster entrepreneurship
Program for entrepreneurial technological activities
with Global Presence
An integral Strengthen financing mechanisms
Fostering growth
approach to and Size
New Capital Development Fund ( 400 Million Euro)
business
creation and
Encourage the creation of Groups and Develop
growth existing ones
Raise companies awareness and accompany
them in international expansion
Internationalization
Broadening the foreign network of agencies
Creation of Basque Business Platforms in priority
countries
Training people and promoting cooperation
20
Moving on to the second AXIS defined in terms of Dimension and Groups, but in
reality what we are talking about is the Creation of Companies and their Growth and
internationalization.
(Text on the slide)
The change in the markets offers enormous opportunities to gain productivity, but on
the other hand, requires minimum capacity to make use of these advantages: to face
the internationalization of the activity and also for innovation. Innovation activities
change the cost structure of companies : in the end sectoral concentration is directly
related to innovative efforts.
The potential disadvantages are expressed in the different areas, and although it is
true that dimension is always a relative concept to the sector, our studies into
competitiveness factors reveal that the figure of 50 jobs is a critical threshold which
must be overcome in the industrial sector.
In the Basque Country, there are 800 industrial companies with more than 50
employees and 3000 with between 10 and 50. The former have double the jobs than
the latter.
On the other hand, although a company with around 100 employees can defend itself
in a global world, the existence of business groups with traction capacity on the local
fabric and with greater international projection is undoubtedly important for a country.
20

21. 3.5 Internationalization of Basque Groups
• 61 Basque groups producing overseas: around 230 plants
Main Countries:
Main Countries:
Brazil, Mexico
Brazil, Mexico
and China
and China
Main countries
Brazil 26
Mexico 26
China 22
Portugal 17
France 16
Germany 16
U.S.A. 15
Italy 13
Argentina 12
UK 11
Poland 9
Czech Republic 8
>20 10-20 5-10
Morocco 7 <5
India 6
Venezuela 5
21
21

22. 3.6 Strategic Objectives and Results
EU 27=100 EU 27=100
2006: 131.3 2009: 131.4
Employment GDP 2004 R&D and EIS
• Basque: 1.44 0.33
2004: 246,000 2004: 29.6
• EU 27 1.84 0.45
2006: 251,000 2006: 29.8
• 2007
• Euskadi: 1.47 0.35
• EU 27 1.84 0.45
22
Our competitiveness model is based on people, innovation and business development. I
remember that the Vision of the Forum talks about productivity based on people and
shared projects and therefore we are trying to achieve a creative, business and global
society. In accordance with this, we set productivity, innovation and the importance
of industry as strategic objectives. Namely, to achieve 131 level of productivity above
EU 27, reach convergence on innovation index and to maintain the size of industry in
terms of GDP and its level of employment.
We are clearly advancing towards the proposed objectives. The new productivity series
indicates that in 2006 we fulfilled the objective of improving on the European Union by
almost five points. Industry, which has made an enormous contribution to this
productivity, has not only maintained the absolute level of employment but also its
nominal weight in the GDP, due to intense deployment into foreign markets, through
exports, setting up abroad and group consolidation.
R&D efforts have finally risen from 1.44 to 1.47 in spite of the enormous growth of the
GDP, and we have also improved in the European Innovation Scoreboard, although
with imbalances and the need of speeding the rate of convergence to reach the
proposed objective for the year 2009.
We are now faced with a period of downwards movement, but we still believe that it is
possible to move towards the fulfilment of the strategic objectives, although with less
growth.
22

23. FINAL REMARKS
1. The importance of Self-government and economic capacity of
institutions
2. Globalization (economic integration) is good provided that the
macroeconomic context is stable and sound
3. It is important to build on your own real capacities: people,
industry and technology were, and still are, crucial for us.
4. An entrepreneurial Vision for the country is also needed: definition
and deployment of a lot of strategies and plans with a broad
participation of stakeholders is necessary for building a deep
concept of competitiveness (social, sustainable competitiveness)
5. Institutional Wealth, accountability, public private collaboration
and cooperation within the clusters and sectors
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I must wind up and I would like to do so from where I started. What lessons, if any,
can be learnt from the Basque Experience?
In my opinion the following five points are important lessons that can be learned from
our experience:
(Text on the slide)
I would like to conclude by highlighting that there is a high idiosyncratic component
and that in spite of the numerous plans and programmes that have appeared in the
slides, not everything was strategic choice.
Remember what we said about deliberated and emerging strategy.
And do not forget that “Life is what happens while we are busy making plans”.
Thank you very much for your attention
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24. REFERENCES
www.politicaindustrialvasca.net
www.euskadi2015.net
www.euskadinnova.net
www.euskadi.net
www.spri.es
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