Spain | The country faces the challenge of the intangible economy

Summary

Investment in intangible assets — software, talent, branding, R&D — increasingly defines business competitiveness. Although investing in them is key to gaining productivity, their development in Spain presents an uneven picture.

Key points

• Key points:
• Between 1995 and 2015, investment in intangibles grew at a significantly faster rate than that of physical assets. According to data from the INE's Quarterly National Accounts, in that period the cumulative investment in these assets tripled. Meanwhile, the amount allocated to tangible assets barely increased by 26% (in real terms and seasonally adjusted).
• This dynamism allowed Spain to position itself in the European average in terms of intangible investment as a percentage of GDP in the first two decades of the 21st century: 3.2% compared to the 3.8% recorded in the European Union as a whole between 2009 and 2019. The momentum, however, has weakened in recent years.
• A new study by BBVA Research, based on more than 250,000 anonymized business-to-business banking transactions within Spain, offers a valuable lens to understand some of the causes behind this stagnation and identifies two gaps.
• The first is sectoral. On the supply side, companies offering software, architecture and engineering or R&D services are the clear drivers of this investment. But their demand is not homogeneous.
• The second gap is territorial. More than 70% of total innovation expenditure is concentrated in four autonomous communities: Madrid, Catalonia, the Basque Country and the Valencian Community.

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