98% OF COMPANIES ARE SMES

Spain 2020 | INDUSTRY | VIP INTERVIEW

TBY talks to Reyes Maroto, Minister of Industry, Trade, and Tourism, on illegal trade, Industry 4.0, and the effects of external factors on the Spanish economy.

How would you evaluate these past twelve months, and what would you highlight as the main achievements that the ministry has made this year?

The balance is quite positive, as President Pedro Sanchez has put industry at the forefront. My job has been to put the industry on the public agenda in order to talk about industry and the challenges that it is facing in this country. Today, it makes up 16.1% of our GDP. The seven year absence of a Ministry of Industry has meant Spain has lost an opportunity to make industry a national project. It is my job to fix this and to activate the industrial agenda in this country in order to overcome challenges such as Industry 4.0 and digitalization, which includes the development of blockchain and AI. In commerce, we have launched two important projects. One has to do with the approach of intrusion in trade. There is a lot of illegal trade on the internet, and it now represents a 9% loss in turnover in the Spanish commercial sector. This has been, and still is, a priority for the Spanish office of trademarks and patents. We have transposed the trademark law, we have created a discussion that we have called "Against the Intrusiveness in Trade" where different public administrations participate with the private sector. The second is Commerce 4.0. This represents a huge opportunity to modernize trade. It is important not to see digitalization as a threat. We created the Observatorio de Comercio 4.0 in October to start working on a private-public forum. This government has built bridges to talk to companies and sectors because to us it is the most efficient way to work. To know the concerns they have is fundamental in defining the country's future project. I believe we have succeeded in that and we have defined what we call "La agenda del cambio,'' which is an agenda for a Spain 2030 that is aligned with the objectives of sustainable development. Another priority is the ecological transition in the fight against climate change, which this government has also put on its agenda. The results from the macro point of view, such as the creation of employment, GDP growth, the competitiveness indicator, all show that we have maintained our commitment.

Spain has advanced with the implementation of Industry 4.0 in many sectors, but SMEs still lag behind. What steps is the ministry taking to support SMEs in this regard?

98% of our companies are SMEs, and, in fact, 54% of those are micro SMEs meaning they have fewer than 10 employees. We needed to bring the programs we have closer to them so that the SMEs can benefit, and there are two important elements to consider here. One that we have effectively configured is the SME policy for 2030, which is important because it gives us some guidelines of what each of us should do. It does not only depend on what the ministry does but what we do with the autonomous communities and municipalities, as well as partners in the private sector. In terms of the strategy, we have already defined where we have to act. This gives us parameters to act, according to the SME policy in Spain, and these actions are related to innovation and internationalization, but also with sustainability as a way to improve the production models of SMEs and elements that have to do with delinquency. It is an issue that affects the SMEs in particular because they support invoices and therefore have a tax system. Without the charged bill, they don't comply with the law. It is the debate we have worked on in parliament. It must be reactivated in the next term. For the SMEs, it is a priority that such delinquency is reduced. We are also measured by the Ministry of Finance in terms of payment periods, but the inter-company trade has many gaps in terms of time. That reduces competitiveness. The SMEs have no money to address the changes. Regarding Industry 4.0, we are also bringing the programs closer to SMEs through the network of chambers of commerce. The Chamber of Spain has a whole territorial network, and we are meeting with businesses at a local level. Providing this information in this way is effective because many were unaware that we had the Industry Connected 4.0 program, which we started in 2015. The fact that in 2019 there are companies that do not know about it means that we have a communication problem. We hold an annual event called the Congress of Connected Industry 4.0 where we present to companies what technological changes are taking place, what the accompanying programs that we have are, while also coordinating with other ministries. In terms of digitalization, the industry cannot work alone, so we are working with Red.es, the Center for the Development of Industrial Technology, and the education sector, both on a university and professional level, which is a key issue. We favor the processes and products to ensure the transfer of new technologies to the company but we lack the human capital to really make the transition that our industry and our SMEs need. We are working with professional training centers to acquire digital talent and boost the skills of our workers. In the DESI 2018, we are ranked 13th, so we have a long way to go, and without adequate training for people this will be a transition where many people will be left out. The first step in addressing this is to make sure companies effectively incorporate digitalization as a value to their business model, while also educating human capital on how to use these new technologies in hospitals, for example. New machines are bought, but they are not used for a year because they lack the trained professionals to operate them. At this moment, increasing human capital is a priority for the government. Industry 4.0 is the responsibility of many ministries and it is a country project that has to be driven by the government to help the leading companies.

We have met with many companies in the automotive sector and many complain about the fall in production. I wanted to know the opinion of the Ministry on the cause of the fall and what are you doing to ensure growth moving forward?

The fall in production is due to many factors. I want to start with the international context. We export 84% of the vehicles that are manufactured in Spain. What is happening in the markets where we export? Germany's growth has slowed and Brexit has generated a lot of uncertainty in a sector where value chains are global. We have the US threatening us with tariffs for cars, and that threat generates more uncertainty. It does not have as much to do with what is produced, because most of what is produced is sold for export, but with registrations. We have an electric car still project just starting in Spain and in Europe, but with small penetration. Technologies such as hydrogen, LPG, or gas have not yet made it to the consumer and therefore we must explain what the ranges of products that can be purchased are. Explaining the value of the industry here in Spain, because eight out of 10 cars produced here are sold outside. The decisions that are made in the markets where we export affect us in our production. I think that we have defined a model according to the European one, which has been a model of success. The European automotive sector has achieved the status that the US used to have. We are currently the leaders in global production but if we want to keep it, we have to make a transition that we have not made yet similarly to countries such as China, Korea or Japan. The decisions we make are long term investment decisions.