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Legal tip 698. Spain attracts R&D foreign companies
09 February 2012 @ 19:47

Spain is the third most attractive European location for foreign companies' R&D centres

In Spain, foreign multinationals account for about one third of expenditure on R&D, which means they can be considered to play an active role in the national innovation system. In this field, Spain is around the European Union average and above the level of France, Italy or Germany, although it is lower than the UK, Sweden and Ireland, according to OECD data from 2011.

According to the FDI Markets database, compiled in the Complutense University report, Spain ranks third in Europe, behind only the UK and France, in the number of R&D centres opened by foreign multinationals in the period between 2003 and 2010, with a weight similar to that of Ireland.

Foreign investment in R&D can contribute to strengthening national technological capabilities and accelerate the paradigm shift of production models towards greater specialisation in industries and knowledge-intensive services. These are some of the conclusions drawn in the report "R&D by foreign companies in Spain: towards a stronger partnership" prepared by a group of researchers from the Complutense University of Madrid.

The study analyses, through statistics, surveys of foreign companies established in Spain, and personal interviews with management, the integration of companies with foreign capital in the national innovation system. The study highlights the positive impact of strengthening this integration, first by the development of domestic technological capabilities and secondly by rooting multinationals in the local area, making the risk of relocation less likely.

In the last decade, to the increasingly open multinationals model, the potential attractiveness of some of the large Spanish companies and the consolidation of certain technology clusters in strategic industries in Spain has been added, in sectors such as renewable energy, rail transport, aeronautics, information technology or biotechnology. The possibility of establishing strategic alliances with these Spanish companies contributes to attracting innovative foreign companies. In particular, the study emphasises the potential for Spain as a business centre for multinationals from emerging countries with expansion plans in Europe and Latin America.

The government as catalyst
 
The study also includes recommendations for the public sector to promote the recruitment of intensive foreign investment in R&D. The authors influence the improvement in quality of human capital, universities, technology centres, public R&D centres and intermediary institutions such as science and technology parks. The report highlights the interaction between the three axes, government, universities and companies, which can generate fruitful results in the system, making it necessary for governments to adopt not only the role of regulators and funders but also to act as catalyst.

It further emphasizes the importance of Spain's participation in transnational research networks. A perspective that could be exploited further is to make Spain known to innovative foreign companies as an efficient platform that enables collaboration with universities within the country, and other European countries, as well as joint participation in projects and research consortia within the European Union.

Another strength showing Spain to be a suitable location for R&D activities of multinational companies, and which could be more intensively exploited, lies in its ability to attract talent from abroad, thanks to EU membership, links with Latin America and the country's high quality of life. In addition to the free movement of people in Europe, the entry of skilled non-EU workers has recently been favoured under the new Immigration Regulations approved in 2011, which provides a new and more flexible admission procedure for researchers.

Moreover, the study points out that Spain is a country that offers greater tax incentives for R&D, thus facilitating the attraction of foreign investment in R&D. There are also numerous lines of financing R&D at both the national and regional levels, which are available not only to domestic companies but also to foreign companies located in Spain.
 
 
 
 

2011 Conil de la Frontera

"2011 Conil de la Frontera", Cadiz, Spain, by jose_gonzalvo, at flickr.com



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