Friday, March 25, 2011

Twenty-Twenty: Mallorca's innovation boundary

A contactless bank card that is just waved over a terminal. A fixed solar heating system that will warm water to up to 200 degrees. Mini wind turbines for generating electricity.

None of these are revolutionary, but they are all innovative. La Caixa has introduced, with the help of Visa, a card that doesn't require swiping; it is said to be the first of its type in a European region. Engineers and scientists from the Universitat de les Illes Balears in Palma have developed a solar energy system, ideal for hotels and being trialled at one in Montuïri, that remains fixed and doesn't require movable machinery to incline panels towards the sun. The wind turbines of Vent Illes in Inca, specifically designed with limited land resource and also limited wind in mind, are in production.

These are examples of innovation that are coming out of Mallorca. They are examples of what you all too rarely hear about; the tapping of local engineering, scientific and technological wherewithal that will, it should be hoped, lead the island towards a more diverse industrial economy.

At the start of his administration, President Antich made much of two plans going forward to 2020. One was the "Plan Turismo", under which were envisaged fewer tourists but greater revenues. The other was for innovation and development (I&D). The two go hand in hand. As the island becomes less dependent upon tourism, so it increases its reliance upon new technologies.

This, at least, is the theory. We still hear murmurs about I&D, but very little, if anything, about the tourism plan.

While there are examples of technological innovation, and tangible benefits being produced, the actual investment in I&D paints a rather different picture. In 2009, the amount invested in the Balearics fell to around 55 million euros. In 2005, before the Antich administration, the figure had been 183 million. The slump may well be attributable to economic circumstances, but a fall in investment to the tune of a third between 2008 and 2009 alone was not mirrored in many other regions of Spain where there were in fact healthy increases: 25% in Madrid, 12% in Aragon as examples.

The total level of I&D investment has thus fallen to under 1% of total GDP in the Balearics; the highest level in Spain is in fact in Navarre at 2.13%. The difference may not sound great, but it is troubling, nonetheless. What is also troubling is the fact that even the poorest regions of the Spain, the two African autonomous cities of Ceuta and Melilla, have managed a major increase in I&D intensity.

Most of the innovation spend is coming from smaller businesses, those with fewer than 250 employees. This may indicate an entrepreneurial spirit, so is to be welcomed, but larger businesses have all but stopped their investments.

If one contrasts the percentage of local GDP devoted to I&D with that derived from tourism (80%, give or take the odd percentage point), one gets some perspective as to the gap which exists between the present of tourism and the future of greater technology. The contrast doesn't give an exact picture of the relative sizes of particular industrial sectors, but it does give an indication as to the difference between the hope for technology and the reality. As Mallorca is, effectively, a one-product island, the need for more intense development is pressing, and 2020 is now an awful lot closer than it was when Antich came into government in 2007.

The political agenda, overshadowed as it is by issues not central to the economic future of Mallorca, needs to sharpen up. The discourse ahead of coming local elections will doubtless be dragged down by discussions of corruption, language and other such side-shows when it should be one in which the parties engage in clear visions of the future. A party that is willing to establish the right framework, in terms of incentives and funding, that can facilitate a more diverse economy would be one well worth listening to.

Mallorca has shown that it has the skills, the people and the appetite for innovation. All it needs is a real political will and not just the spin that was spun in 2007. If it gets it, then 2020 may yet become a reality.

Any comments to please.

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