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Countries using the Euro de jure Countries and territories using the Euro de facto Countries in the EU not using the Euro (Photo credit: Wikipedia)

Miguel de Unamuno, a Spanish Philosopher of the first half of the twentieth century introduced in a polemic discussion with Europeanist Spanish philosophers about the scientific development in Spain the sentence: What do they invent!

Things have changed a lot from those days, but in some sectors of the Spanish society this show of anti-Europeanist and anti-scientific thinking remains. Spain has done during the second half of the previous century a hard effort to improve his technological development and of course it has demonstrated a strong Europeanist conviction in the construction of the European Union and the Euro. It is now one of the four main economies of the Euro, and it is well-known because of the current economic situation when the final influence of the Spanish economy in the whole European economy has shown, affecting even the economies all over the world.

This way has not been a rose garden. Spaniards developed a public innovation system centered in University Education and public research centers. Public expenses in research were increasing but their effect on the national economy did not get the expected results during General Franco’s political regime and later with democratic socialist governments, until with the arrival of a more liberal party to the government, new focuses to improve the technological level of the country were adopted.

Aznar’s Government in collaboration with other social agents studied the problem, and they realized that the efforts of technological development should be nearer the society and markets with practical applications instead of generating knowledge only, and they devised a way to promote innovation at the private sector through the mechanism of tax reductions linked to the private expenses on research and innovation. The mechanism helps innovative companies in front of non-innovative ones. The objective of the action was to improve the technological development, and that is the reason because non-technological innovations were not deductible. The action impulse the concept of R &  D & I instead of R & D searching for giving more importance to innovation in front of R & D.

This mechanism was a success but there was a need of control it well in order to avoid the possibility of tax fraud by the government, and there was a need to assure that the activity would be accepted as deductible. In order to get it, it was developed a set of procedures that let to certify a priori those activities as technological innovation, based on an analysis and audit of the activity by recognized professionals with a lot of experience in the field of research and development. I had the honor of being one of the first professionals qualified in order to do this task.

As the reason of this qualification of activities is related to taxes, the procedures were very strict and a lot of activities required by an innovation project were not included as deductible, but this does not limit the capability of the action in order to support better the innovation activity. Companies felt satisfied with this mechanism but for different political reasons other political parties and countries do not accept it. Socialist governments, all over Europe not only Spanish, usually prefer to preserve the old scheme of funding directly only public research centers probably by reasons related to ideology instead of following a practical development of the society.

In order to finish, I want to explain why organizational innovations was not considered. The reason is the level of risk. The tax law distinguished between activities considered research and development and activities considered innovation with different tax deductions, because it was decided that the support would be linked to the risk of the activity in order that the action was just for all the businesses. Organizational innovations have market risk (risk related to the acceptance by the clients of other stakeholders of the changes), but they do not have any technical risk (risk that the company cannot accomplish the project with success). In the same way an activity that requires research and development has higher technical risk than an activity that does not requires that kind of work.

This kind of action could be replicated in other countries in order to promote a culture of innovation at the private sector and to facilitate that business can develop his innovative ideas based on technology properly.

Spaniards decided at the end of the last century to abandon the old proverb “What do they invent!”, but in the innovation market the world seems to be upside down, even in countries traditionally defenders of research and innovation as the USA we can see every day a lot of people who want to transform innovation in something very far from invention. Perhaps they should learn something from the Spaniards of the end of the twentieth century.

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