Innovation system at the crossroads

R&D and innovation indicators in Spain are not advancing at the necessary pace and we are still a long way behind the most advanced countries, according to all the studies carried out in recent years. Although the environment and water sectors are in a better position than other sectors, it is vital for public authorities to make a firmer commitment to the promotion of innovation. European recovery funds represent a key opportunity for the sector due to the fact that they prioritise ecological transition, which will undoubtedly have an impact on the entire Spanish economy. Which projects are prioritised, how the capacities and resources of existing innovation ecosystems are reinforced and essential simplification of administrative procedures for the implementation of these projects will determine the success or failure of this enormous investment in the coming years.

Xavier Amores Bravo, Director CATALAN WATER PARTNERSHIP

Recurring trends that are demoralising in terms of the future of our economy, such as the evolution of investment in R&D&i, have so far not led to changes in budgetary priorities, nor to an in-depth critical review of the innovation and technology policies implemented. Successive governments have carried out intermittent actions, with unambitious budgets and the impression has been that science and technology policy, and support for the most innovative sectors, was not on the political agenda in a way that was proportional to its importance. Now, however, the European recovery funds have emerged as an unparalleled opportunity for a relaunch and, although this is perhaps more complicated, an opportunity to help consolidate an innovation system with too many weaknesses after years in which it has not been given sufficient attention. Since the EU has placed ecological transition at the heart of a great many of the investments planned, the funds represent a two-pronged opportunity for the sectors most closely linked to the environment, including water. It is unquestionably an opportunity we cannot afford to miss.

It is well known that insufficient investment in R&D, and especially in impact innovation, hampers the future development of any country, in both economic and social terms. All the experts and research centres have been warning about this for years, and the publication of annual indicators leads to a certain despair due to their predictability. There is a lack of change in priorities, as well as a lack of consistency and stability in technology policy. Although expenditure on internal Research and Development (R&D) in Spain increased by 4.3% to 15,572 million euros in 2019, this figure accounts for just 1.25% of GDP, far from the average of 2.18% of the leading European countries, and even further-removed from global leaders such as the USA, Israel, Singapore and South Korea. Moreover, the rankings that take account of different indicators on a global level do not leave us in a better position. Spain tends to occupy a mid-table position, but with worrying shortcomings in indicators such as investment in education and innovation, the ease of creating companies or the lack of cooperation between universities and business, as shown, for example, by the Global Innovation Index 2020. The European Regional Innovation Index, published a few weeks ago, ranks Spain 16th out of 27 EU countries, with only two regions (the Basque Country and Madrid) in the top 100. Most Spanish regions appear as moderate innovators or emerging innovators (a polite name for regions at the lower end of the table).

We might think that this situation is far removed from our sector, but it is clear that specific incentives and aid for innovation are lacking in a sector that should be a priority due to water stress in Spain, a country in which not all public authorities consider R&D to be an integral part of the water service. It should be noted that we are one of the sectors with the best returns in all European R&D programmes (LIFE+, H2020, SME instrument, etc.), which is indicative of our internal potential and the great capabilities of companies and research centres in the environmental sector compared to other sectors of the Spanish economy. However, it is no less true that years of poorly funded R&D programmes in Spain have led the Spanish innovation system to specialise in attracting European funds as a survival strategy. Without these funds, how many technology or research centres, universities, clusters and innovative SMEs would not have been able to carry out their R&D projects? And although there should not be a direct correlation, when we compare the innovation support programmes of other European countries in terms of funding, percentage of aid and stability over the years, their motivation to participate in European programmes is not as imperative as ours. Precariousness, instability and loss of talent have been the norm for years in the R&D sector. In combination with insufficient instruments for enhancing the competitiveness of companies, the result has been a fragile innovation system.

In any case, there is no doubt that the R&D capacity of the environment sector is one of our main assets in terms of claiming a leading role in recovery programmes in Spain. Even more so, if we consider the environmental sector in a broader sense, i.e., not just the traditional activities associated with water, energy or waste, but also the technology companies specialising in the circular economy in all productive sectors of our economy. This encompasses engineering companies, environmental consultancy companies, and digital companies specialising in the application of AI, IoT, etc. to ecological transition.

Published in: Nº80 FuturENVIRO May – June 2021