Industry 4.0 and game-changing innovation policies

In the Transforming Innovation Policies Conference organized by the Innovating Companies Forum (Foro de Empresas Innovadoras), Luis Fernando Álvarez-Gascón, CEO of GMV Secure e-Solutions, tabled the need for innovation to be dealt with as an affair of state by means of a pact that encourages and drives both innovating public procurement and private innovation demand. He likewise referred to the need for promoting within Spain a reindustrialization agenda to boost the sector above 20% of the country’s GDP, in line with the EU strategy “An integrated industrial policy for the globalisation era”.

In the words of the GMV executive “the science of innovation policies has placed a whole quiver of measures and instruments in the hands of managers, to be applied as seen fit by the government in each case”. He went on, “while some countries, such as Spain, choose to grant more direct aid to innovation policies, others, like Germany, incline rather for taxation incentives”. In his opinion “there is no evidence either way to say that one policy is necessarily better than the other.”

As for the demand side, “industry is eagerly awaiting the advent of many groundbreaking public procurement projects”. But in the case of Industry 4.0, “private innovation procurement plays a crucial role. Although public procurement chalks up figures of 16% of the GDP, private procurement accounts for an even bigger share in terms of volume”.

In relation to Industry 4.0 Álvarez Gascón also pointed out that “OECD recommendations should be borne firmly in mind here. Public demand must be spurred on without overlooking other related aspects such as regulation or bringing technologies to wider notice”. Various institutional initiatives in Spain like Interconnected Industry 4.0 are certainly headed the right way but they need a leg-up to a higher level, as in Italy, where they have gone beyond a ministerial project to study and debate innovation policy in parliament itself”.

The executive argued that Spain’s innovation ranking is “rather modest”. As “Europe’s fifth biggest industrial economy our industrial fabric features an overwhelming majority of micro-SMEs and a dearth of innovation firms”. Although this fabric “is a strong exporter, well integrated in the international economy, the truth is that high-tech exports do not bear their true weight”. In relation to the digital transformation, Spain’s industrial sector suffers from “a comparative lack of revenue investment expectations, exacerbated by a lower appreciation of the positive impact on expenses”. Its current digitalization level is also lower.

In Álvarez Gascón’s opinion, other barriers that are balking the development of Industry 4.0 in Spain are “the lack of digital skills and resistance to change”. In sectors like healthcare, we went on to argue “the potential value of digitalization is better appreciated, but there are other barriers, mainly in terms of regulation”.

The CEO of GMV Secure e-Solutions wound up by advocating that “the construction of public innovation policies should be based on a sector-by-sector analysis, to suit the real needs of Spain’s economy. This would be underpinned by several pillars: its articulation within government structures at all levels, liaison with firms and the various sectors and science”. These policies should be the object of “a state pact and give rise to multilevel R&D governance adapted to the digital transformation and conducive to a strategic approach”. What is at stake here, he concluded forthrightly, “is the country’s economic and social progress”.