New industry 5.0: sustainable, efficient, competitive, digital and international

Industrial activity is a differential feature of the Valencian economy. Focusing the analysis on the market economy, without considering the public sector, while in Spain the industry contributes 24% of the national GDP, in the Valencian Community this percentage increases to 28%. In addition, it is where 12% of industrial employment in Spain is located. The ceramic, agri-food, chemical and automotive industries are the industrial sectors with the greatest presence in the region and together they generate close to 95,000 jobs, which means more than a third of Valencian industrial employment..

For some time, an effort has been made to recover industrial activity as a fundamental pillar of the Valencian economy. The crisis caused by COVID-19 has made it possible to verify the importance of the proximity of companies from different sectors and also of the different tasks of the value chain within the same sector. The objective is that the tasks that provide the greatest added value are located in the Community, that is, that they develop intensive activities in both human and technological capital..

The success of the development of the Parc Sagunt business park located in the center of the Mediterranean Arc and considered the national gateway for freight traffic in southern Europe and Spain, the reinforcement of the value chain in the automotive industry with the implementation of the gigafactory of batteries of the Volskwagen group, the promotion of complementary aeronautical and industrial activities around the Castellón Airport and the international competitiveness of the Valencian agri-food industry are just a few examples that, it is not that there is a reindustrialization, but rather that a new industry 5.0 in the Community: sustainable, efficient, competitive, digital and international.

However, it is also necessary to point out some weak points of the Valencian economy that can slow down this industrial boom and against which action must be taken.. The main problem that drags is its low level of productivity. The Valencian private sectors show a level of labor productivity 8% lower than the national average. In addition, this feature does not affect a small number of branches of activity, but is shared by most sectors. Of the 60 sectors into which the Valencian economy is divided, only in fourteen labor productivity exceeds the national average. These most productive branches contribute 17% of the GVA (gross added value) of the Valencian private sector. Therefore, a worrying fact to highlight is that 83% of the Valencian GVA is generated by sectors with lower productivity levels than their counterparts in Spain..

It can be said that the Valencian business activity is little specialized in those sectors that provide a greater added value per worker, such as telecommunications, the pharmaceutical industry, the metallurgical industry, audiovisual activities or consulting services.. Only in the case of the chemical industry, a sector with high productivity per employee, its weight in the Valencian economy (2.42%) exceeds the national figure (1.37%).

The Valencian economy must aim to be able to compete in the current globalized scenario, and for this its business fabric must be strengthened and gain in productivity and sustainability, both economic and environmental. For this, there are different aspects that must be addressed in the short term, among others: reducing the impacts that economic activity generates on the environment (ecological transition), incorporating knowledge into processes and decision-making (human capital) and promote digitization and investment in R+D+i in companies (technological capital).

The qualification of the human resources used by companies determines the development of the most value-generating activities in today's economy. Currently, of the million people in the Valencian Community who have higher education (university or Higher Vocational Training), 92% are working. Putting professionals capable of defining a good development strategy at the forefront of companies will be essential for the future of the Community.

Another aspect that should be promoted is business investment in intangible assets.. Investing in innovation, both in the process and in the product, in brand design, in software and in the continuous training of workers will allow us to continue improving the levels of competitiveness of the sectors. Currently, investment in R&D in the business sector in the Valencian Community stands at 0.57% of GDP, below the 0.8% of the national average, and far from the 1.8% of the business fabric Basque or 1.1% from Madrid and Catalonia.

In order to close the gap that separates us from the productivity levels of Spain, it is convenient to gradually transform the Valencian productive fabric, directing resources towards those sectors that reach higher levels of productivity (telecommunications, R&D services, audiovisual services, industrial pharmaceutical…). In addition, it is important to continue strengthening those sectors with high levels of productivity, and whose presence is also greater in the Community. This is the case of the automotive, ceramics, chemical industry or electrical material and equipment manufacturing industry..

Additionally, all the activity sectors related to environmental sustainability (manufacture of other means of transport and sectors linked to renewable energies) and to the generation of knowledge (design or treatment of big data) may have significant room for growth in the coming years. next years.

In short, industrial policy must continue to be a priority in the Valencian Community. The attraction of large companies should serve as a drag to incorporate R&D and digitization in Valencian SMEs, and the development of new industrial activities to renew the traditional industry and make it more productive and competitive. All this without forgetting that this greater competitiveness must be linked to corporate responsibility in both the environmental and social spheres.

* Juan Pérez Ballester, technician from the Valencian Institute of Economic Research