Research in Spain: the attitudes of companies, Governments and citizens

Luis Sanz Menéndez and Laura Cruz Castro, Institute of Public Goods and Policies (IPP) of the Spanish National Research Council (CSIC)

On average, Spain invests less in R&D than its European partners, while its public-private distribution is not ideal for increasing the impact of knowledge on the economy and wellbeing. Meanwhile, Spanish society has a positive perception of science and nearly 20% of people attach priority to increasing public investment in R&D. This means that a discrepancy arises between the attitudes and opinions of citizens regarding science and the significance that Spanish companies and governments attach to it.

1. Introduction

What is popularly known as “science” is a concept that, for the purposes of this article, encompasses scientific research and technological development (R&D). The measuring of these activities has been carried out, since 1963, in accordance with the regulations and directives contained in the proposal of the Organisation for Economic Cooperation and Development known as the Frascati Manual. This proposal defines them as “the creative work systematically undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge” (OECD, 2015a).

The objective of this study is a comparative analysis of the research situation in Spain. The aim is to present the results of the actions taken by the most important actors, companies and governments, from the angle of R&D funding, and to compare these realities with the attitudes and expectations that citizens have towards science and technology. 

The increase in R&D has a positive relationship with economic growth and the expansion of wealth.

Science is very much a relevant activity in economic terms (Sanz Menéndez and Cruz Castro, 2010). On a worldwide level, estimated investment in R&D in 2016 reached nearly two billion dollars in purchasing power parity: of these some 20,000 million correspond to Spain (IRI, 2016), which represents 1%.

The current standard of living of our societies is largely a result of investment in R&D and advances in knowledge. Economic historians have confirmed a positive relationship between increased R&D on the one hand and economic growth and expansion of wealth on the other. In addition, many empirical studies quantify the effects that investment in research has on the economy, with some concluding that between 1995 and 2007, two thirds of economic growth in Europe stemmed from R&D understood in its broadest sense (EC, 2017); greater investment in R&D is also associated with gains in productivity (Donselaar and Koopmans, 2016). In the long term, a “co-evolution” exists between the real growth of a country’s gross domestic product (GDP) and its internal gross spending on R&D. In short, there can be little doubt regarding the multiplying effects produced by investment in R&D, along with investment in education and the training of human capital.

Graph 1 presents, for 2015, the relationship between countries’ income per capita and R&D effort (measured in spend on R&D per inhabitant) of countries, and includes the correlation coefficient (0.7), which is quite high for the set of countries selected. 

2. The general situation of R&D in Spain

The relative R&D effort of countries is usually measured through the proportion of the gross domestic product (GDP) represented by spending on R&D. In Spain, a process of economic and monetary convergence with the European Union has been underway since 1986, but convergence in terms of R&D has been weaker. Thus, in 1986 Spanish income per capita stood at around 70% of the average of the EU-15 and spending on R&D as a proportion of GDP was 50% of the EU average, while in 2015 Spanish GDP per capita had reached 90% of the EU average, whereas investment in R&D stood at 60%.

Graph 2 presents the evolution of this indicator for Spain and the G7 countries (United States, Japan, Canada, Germany, France, Italy and the United Kingdom), as well as other countries similar to Spain in demographic, economic or R&D system size (South Korea, Australia, Netherlands) and our neighbour Portugal. In 2015, Spain invested 1.22% of its GDP in R&D, while the average for the EU-28 was 2.02. In the lower part of the graph, the differences are presented (with negative values) between the level of spending on R&D in Spain and the average of the EU-28 and of the OECD. If in 2008 this difference with the European average represented 0.44% of GDP, by 2015 it had increased to 0.73%.

3. Role played by the private sector in research

Low investment in R&D concerns society as a whole along with businesses and the public sector, and neglects the commitments of the Spanish and European Union governments, according to which, in addition to increasing general investment in R&D (to 3% in the EU or 2% in Spain), the role of principal funder of R&D corresponds to businesses, which should increase their participation in total to at least 66%; in Spain it stands at only 46% of the total investment in R&D.

Graph 3 represents R&D that is funded by companies (in terms of % of GDP). In 2014, Spanish companies invested 0.57% of the GDP in R&D, while the average in the EU-28 stood at 1.07%. Thus, Spanish companies should be investing nearly double in order to reach the European average, and nearly triple to reach the average values of the OECD; if in 2015, companies financed R&D activities worth over 6,000 million euros, in order to reach the European average they should be investing around 11,500 million euros per year.

One pertinent question is: why do Spanish companies invest so little in R&D? Among the main factors are the greater predominance of small- and medium-sized companies (SME) and, especially, of micro-companies, combined with the lower contribution of large Spanish companies in terms of business investment in R&D in comparison with those of other countries. The second factor is related with the production model and the sectoral specialisation of the Spanish economy. With the current production structure we will not be able to reach the levels of spending on R&D of countries whose knowledge-intensive manufacturing sectors, high technology sectors or emerging sectors (ICT, biotechnology, nanotechnology, new materials, new manufacturing, etc.) have a greater weight. 

Graph 4 presents the real value of company spending on R&D in relation to gross value added (GVA) in %, and the value that this spending on R&D would have if the country’s economy had the average composition of production sectors of the OECD. The expenditure of Spanish companies would increase slightly, but would still lag far behind the average of the OECD countries (2.46%); therefore the Spanish problem is not only one of production structure. Even taking into account the effects of sectoral composition, investment in R&D with respect to GVA is very low, if compared with the average of the OECD or with other countries. 

Additional factors exist that explain this situation, such as an insufficient level of qualifications among senior management, a limited innovation culture and a fear of business risk-taking. The good news is that these are factors that can be improved by raising the educational level of business owners, or by encouraging a cultural change so that companies give more impetus to creating competitive advantages.

In summary, Spain invests less than its European partners in R&D. Furthermore, its public-private distribution is not ideal for increasing the impact of knowledge on the economy and on wellbeing.

4. Role of the public sector in R&D

In Spain, the funding of R&D by the public sector (government bodies and higher education) represented, in 2015, some 45.2% of the spending on R&D. The difference with the European Union average is smaller than in the case of the business sector. However, although in 2008 it stood at a value close to the EU average, in 2014 the governmental sector funded R&D to a value of 0.51% of GDP, against the 0.64% of the EU-28; in other words, in relation to GDP, it financed some 80% of the average for the EU-28. This reduction in the Spanish public effort is connected, undoubtedly, to the financial and economic crisis.

Although not all R&D funded by the public sector is accounted for in the public budgets for R&D (a significant part is included in the budgets for higher education or health), the evolution of the system is observed through those budgets. In Spain, budget spending on R&D traditionally increases at times of economic prosperity and falls at times of economic crisis, a pro-cyclical pattern to which most of the private sector has also adapted. This conduct, however, is not in tune with the recommendations by international bodies (OECD, 2009), which sustain that investment in R&D prepares countries to better overcome the crisis and therefore they should follow a counter-cyclical pattern; nor with the evidence that countries that historically invested more in R&D have weathered the crisis better.

Graph 5 presents the evolution of public R&D budgets during the years of the crisis. In it we see that, following a process of expansion between 2005 and 2008, a significant fall then took place. Public R&D budgets in Spain are among the most volatile; in addition, Spain has been the EU country that has cut them most (Izsak et al., 2013). It is interesting to note that, despite a crisis as acute as Spain’s, Portugal has been better at maintaining its Government’s commitment to R&D. 

In Spain, R&D policy and its funding are the shared responsibility of the state government and the autonomous communities, and the state government’s R&D budgets and those of the autonomous communities have been falling since 2009 for the former and since 2010 for the latter, with a slight upturn from 2014 onwards (Cruz-Castro and Sanz-Menéndez, 2016). 

More public resources for R&D are undoubtedly needed, but it is also important to improve the use of such resources and transform certain practices at universities and public research centres; this means that not only should there be a change in the attitudes of governments and the R&D investment conduct of companies, but also in those of researchers and research institutions, towards them being more sensitive and acting more responsibly towards society (Parellada and Sanz Menéndez, 2017).

The attitudes and opinions of Spanish society regarding science are at odds with the conduct of Spanish companies and governments and the relevance that they attach to it

Up to this point we have analysed the behaviour of companies and governments in relation to R&D. From here on we will present some aspects of the general public’s opinions and attitudes towards science: what do the Spanish people think of and expect of science and technology?

5. Attitudes of Spanish people towards science

The attitudes and expectations of Spanish people towards science are positive, especially among the more dynamic segments of society. Data from the Eurobarometer (EC, 2013) showed that 89% of Spanish people believed that R&D had a positive influence on society, a value in line with the EU average. As an indicator of this favourable attitude towards science and its effects, graph 6 shows the results of the degree of agreement or disagreement with the idea that “science and technology make our lives healthier, easier and more comfortable”: over 80% of Spaniards were in agreement, against an average value of 68% for the entire EU-27. Spain has the highest value, contrasting with countries where a more sceptical or ambivalent attitude predominates, such as Germany or France.

Spanish society has a very favourable perception of science. The survey on the Social Perception of Science and Technology carried out by the Spanish Foundation for Science and Technology (FECYT) enables deeper investigation of citizens’ attitudes and expectations towards science and its institutions, and the confirmation of this dissonance with the conduct of companies and governments. For example, when the prestige of various professions in Spain is compared, scientists are consistently shown to have the greatest prestige and social recognition after doctors, and in the context of the crisis this social evaluation has increased (Lobera and Torres, 2015). 

Furthermore, as observed in graph 7, when citizens express their confidence in different institutions with regard to issues related with science and technology, universities and hospitals are found high on the scale, whereas the confidence of citizens is lower with respect to governments and authorities, and to companies. On a scale of 0 to 100, universities and hospitals obtain an average score of 80.3, while confidence in companies stands at 56.8, and in governments and authorities, at 44.6.

Moreover, the majority of Spanish citizens believe that the central state and autonomous governments invest few resources in scientific and technological research; in 2016, with all the areas of public spending as a reference, over half of Spanish people thought that little was spent on R&D; this perception increased according to level of education. 

For a better knowledge of citizens’ attitudes towards science and technology, it is interesting to know what they would do if they had to choose between different priorities in public spending; among their predominant preferences are those related with the services of the welfare state (health, education, pensions and unemployment protection). Therefore it is notable that nearly 20% of citizens preferred to increase public investment in R&D as a priority, even against other priorities associated with the welfare state concept: let’s not forget that only 0.9% of the population was undertaking R&D activities. Thus, a relevant segment of Spanish society exists that approaches R&D in an “altruistic” way and probably takes into account the future benefits of investment in R&D. For this reason, it is interesting to characterise these segments of the Spanish population. A recent analysis (Sanz-Menéndez et al., 2014) has identified some characteristics of citizens that attach priority to increasing R&D budgets: they have the highest education levels, the most scientific training and knowledge, and are mainly young people and those that live in the cities. Support for R&D, and for increasing investment in R&D, is greater among the most dynamic sectors of society. 

Finally, it is important to point out that Spain’s citizens are aware of the role played by R&D in the change in the production model and in preparing for the future, because when they were asked in 2014 regarding their opinion and preference on the three most productive and growth-oriented sectors for the Spanish economy of the future, nearly one in every four Spaniards selected R&D as their first option and preferred sector (Pereira and Sanz Menéndez, 2015), as opposed to tourism, agriculture and others.

Improving the R&D system and increasing its impact on the economy and on Spanish society is a task for all of the actors involved

In summary, it can be said that a discrepancy exists between the attitudes and opinions of citizens regarding science and the conduct and relevance attached to it by Spanish companies and governmental bodies when considering investment required in preparation for the future.

6. Conclusions

In Spain, the conduct of companies and governments overlooks, firstly, the evidence of economic studies on the significance of R&D for growth and, secondly, the positive experience of countries that have followed counter-cyclical patterns of public spending on R&D (such as Germany Sweden or Denmark).

It should also be a cause of concern that companies and governments are displaying behaviour that is far removed from the expectations of the most dynamic sector in Spanish society, represented by those with the highest education levels and who are youngest. It could be supposed, at least, that fulfilling citizens’ expectations regarding science would improve the evaluation, prestige and confidence of citizens in government and companies, as well as serving to prepare for the country’s future and improve its production model.

The additional resources needed to change course in the short term are not excessive; for example, in the public budget, regular annual increases, in the order of tens of millions, would enable the start of the recovery of the R&D sector (Parellada and Sanz Menéndez, 2017). These actions could also serve to highlight efforts to change the production model.

Some of the sectors involved in R&D have been demanding a Science Agreement, which has been interpreted as a request for more budgetary resources for R&D; viewed thus, the agreement is not sufficient. It is more a case of promoting a new “social contract” between science and Spanish society by improving the R&D system and increasing its impact on the economy and on Spanish society, as a task for all the actors involved. Larger budgets should be accompanied by reforms in governance and changes in the practices of public research institutions and universities, in order to improve efficiency in the use of public resources, as well as an extraordinary increase in the business sector’s responsibility for investment in R&D.

We conclude our analysis by insisting on the contradiction between, firstly, the reality of the limited commitment made by companies and governments, and, secondly, citizens’ demands for greater relevance and support to be given to science. Companies, governments and R&D institutions will need to do more and do better in R&D matters if they are to measure up to these demands and meet the expectations of citizens.

7. References

Cruz-Castro, L., and L. Sanz-Menéndez (2016): “The effects of the economic crisis on public research: Spanish budgetary policies and research organizations”, Technological Forecasting and Social Change, 113

Donselaar, P., and C. Koopmans (2016): “The fruits of R&D: meta-analyses of the effects of Research and Development on productivity”, Research Memorandum 2016-1, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam 

European Commission (2017): The economic rationale for public R&I funding and its impact, Policy Brief Series, March 2017 .

European Commission (2013): Eurobarometer79.2: Internal Market, Cultural Activities, NonUrban Road Use, Science and Technology, and Undeclared Work and Tax Fraud

FECYT (2017): Encuesta de Percepción Social de la Ciencia y la Tecnología 2016.  Informe de Resultados.

Industrial Research Institute (2016): 2016 Global R&D Funding Forecast, R&D Magazine Supplement 

Izsak, K., P. Markianidou, R. Lukach and A. Wastyn (2013): Impact of the crisis on research and innovation policies, Study for the European Commission DG Research by Technopolis Group Belgium and Idea Consult 

Lobera, J., and C. Torres Albero (2015): “El prestigio social de las profesiones tecnocientíficas”, in Percepción social de la ciencia y la tecnología 2014, Madrid: FECYT 

OECD (2017): Main Science and Technology Indicators. 2016-2.

OECD (2015a): Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development, París: OECD.

OECD (2015b): OECD Science, Technology and Industry Scoreboard.

Parellada, M., y L. Sanz Menéndez (2017): «El porqué y el cómo de la política de I+D+I. La situación en España», Policy Brief 10, Barcelona: EuropeG.

Pereira, M., y L. Sanz Menéndez (2015): «La I+D como sector de futuro en la economía española: ¿quién la apoya? y ¿quién debe financiarla?», en Percepción social de la ciencia y la tecnología 2014, Madrid: FECYT.

Sanz Menéndez, L., y L. Cruz Castro (eds.) (2010): Análisis sobre ciencia e innovación en España, Madrid: FECYT.

Sanz-Menéndez, L., G.G. Van Ryzin y E. del Pino (2014): «Citizens’ support for government spending on science and technology», Science and Public Policy, 41(5).

Classification

Authors

Luis Sanz Menéndez and Laura Cruz Castro, Institute of Public Goods and Policies (IPP) of the Spanish National Research Council (CSIC)

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Thematics

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