For years, the modest improvement in productivity has slowed down the growth of a good number of countries that base their progress on the contributions of labor and capital. The problem is pressing in the EU, as it distances it from the US and China, undisputed leaders in technology and the current geopolitical scenario. A project by The Productivity Institute – under the direction of Van Ark and Pilat – identifies the most successful pro-productivity policies by reviewing evidence from 17 countries. The Spanish trajectory since 1960, analyzed by the Ivie, offers an example of growth based on the accumulation of factors, whose productivity barely progresses due to the low use of investment effort and an inefficient allocation of resources between assets and sectors. Despite the economic nationalism so in vogue, policies promoting internationalization show clearly positive impacts on productivity in Spain. The Stabilization Plan (1959) took us out of autarky and opened the door to the economic miracle of the sixties and seventies. In the 1980s, entry into the EU boosted competitiveness, providing funding for important infrastructure. In the 1990s, entry into the euro was prioritized and rapid growth during this period came close to achieving convergence in real income with the EU. The increase in immigration has had positive effects on competitiveness in the 21st century, but it has also supported sectors with low costs and low productivity. Three positive results stand out from policies aimed at capital accumulation: incorporation of technical progress through investment in imported machinery and equipment; housing construction, which facilitated the migration of the rural population to more dynamic areas; and development of an ambitious infrastructure network. But weaknesses abound: high concentration in real estate assets; underutilization of installed capacity; low levels of investment in ICT, R&D and other intangible assets, especially organizational capital; poor R&D policy: low spending, little private participation, insufficient coordination between key actors, wide gap between academic research and applied to business. Recently, the manna of the Next Generation Funds has limited its impact on productivity because they are less focused than in other countries on intangible assets and the use of AI. This is largely a consequence of the excessive absorption of funds by traditional sectors and the lack of digital training of employers and workers. Human capital policies drove substantial improvements by expanding free compulsory education and increasing public spending on training. The initial reforms were well planned, as is the recent push for employment-oriented vocational training. On the other hand, since the 1980s, educational reforms have proliferated that do not last long and barely improve the basic skills of workers. And early school leaving rates are reduced, but remain high, with considerable mismatches persisting between workers’ skills and occupational needs. The rigidities of labor regulations and collective bargaining do not contribute to improving productivity either. Reforms since 2012 have increased flexibility, but layoff and unemployment benefit regulations make it difficult to reallocate work within companies and between sectors. Active employment policies prioritize benefits and subsidies instead of training, retraining and job guidance. Finally, policies to improve the functioning of markets and the allocation of resources have had limited results. Since 2000, they have focused on promoting competition, especially in services, promoting business dynamism, supporting internationalization and facilitating financing. But the economy is dual and business dynamism in the creation and closure of companies is limited: there are very powerful and competitive companies, but smaller ones weigh much more. The barriers to business growth are fundamentally legal and administrative, access to financing and derived from the fragmentation of the internal market. The good news is that since the pandemic, the Spanish growth pattern is based more on productivity. The levers for progress are the better use of human capital and greater investment in intangible assets, the same as supported by international evidence. Matilde Mas and Francisco Pérez (Ivie and Universitat de València.
