The Valencian recovery, hampered by a low-tech industry

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The strong weight of trade and the low technological intensity of the industry in the Valencian Community limit the response of the region's economy to Covid-19, according to the latest report from the Observatory on Government, Strategy and Business Competitiveness ( GECE).

This report, promoted by Bankia and the Valencian Institute for Economic Research (Ivie), analyzes and compares the capacity of Spanish regions to resist the economic crisis generated Phone Number List by the coronavirus. The Valencian Community is strongly conditioned by a deficit of highly competitive companies, as it has 1.7% fewer companies considered to be in that category compared to the national average, a gap that shows no signs of closing.

The region's highly competitive companies are also heavily concentrated in the commerce sector, one of the most affected by the restrictions imposed by Covid-19. Nor does the presence of highly competitive companies from Valencia, Alicante and Castellón stand out in technology and knowledge-intensive sectors.

Furthermore, the weight of the wealth generated and the employment produced by these companies, which are the most resilient in the face of difficult economic situations, has fallen 3 percentage points in the last five years at the national level, but in the Valencian Community this decrease has been much more pronounced, with 7.4 points less in added value and 5.5 points less in employment.

For Alejandro Escribá, an Ivie researcher and professor at the University of Valencia who directed the report, "the crisis caused by Covid-19 represents a great challenge that has highlighted the strengths and weaknesses of companies in each region . "

«In the case of the Valencian economy, the relative scarcity of highly competitive companies, the strong weight of trade (partly offset by the strength of agri-food trade), the low technological and knowledge intensity, and the insufficient business size are pending issues. "that hamper the ability to respond ," he commented.




These weaknesses have persisted for years, and this crisis constitutes a new opportunity to decisively face a change in the sector model and to bet on business growth, Escribá stressed.

The report states that the autonomous communities that have a higher percentage of companies with high levels of competitiveness and that, in addition, have a diversified business fabric and companies of larger size and technological intensity, are the ones that can best respond to the crisis of Covid-19.

In Spain, seven regions are above the average in terms of percentage of highly competitive companies. The Canary Islands stand out, with 11.3% more competitive firms, followed by Navarra, the Balearic Islands, the Basque Country, La Rioja, Catalonia and Madrid.

In Spain as a whole, Navarra and the Basque Country are the communities located in a more favorable position to face the current situation, since, on the one hand, they are among the regions with the highest percentage of highly competitive companies (8.3% and 5.9% above the average, respectively), and on the other hand, these highly competitive companies have a diversified sector specialization, with a strong weight of technology and knowledge.

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