Are the Spaniards going to enter in the new century anytime?

Today, reading an article about the Spanish low productivity made me think about the investment in R+D+i (Research, development and innovation) and I realized that in Spain, we almost do not know what that means, and there is no doubt that the relationship between innovation and productivity is inversely proportional, besides, with the current high competition what makes the difference is innovation.

Regardless the current financial crisis that Spain is suffering, the investment in R+D+i has been always very low, much lower than in the EU, EEUU and Japan. The countries which invest more are the Scandinavian, Germany, Austria and EEUU which have known to keep this potential innovation despite of the financial crisis and have connected salaries with productivity.

The main problems to invest in innovation in Spain are that the companies closest to this sector only represent a 1% of the GDP. The economic system, formed by small and medium enterprises with one to ten employees, that is why integrating in innovation for these companies is almost impossible; this task is developed by international subsidiaries in Spain or Spanish firms like Repsol, Acciona or Telefónica.

Another big problem caused by this low investment is this “brain drain”, which is not only the reason of the lack of talents and the economic and development lost, but also the fact that thousands of students are educated at our public universities, investing in materials, laboratories, lecturer’s formation and then we do not provide the option of finding a job related to their studies, so, the emigrate and another country hire then without any education cost. Does it have any sense? I do not understand why an education is provided, all those costs/investments for nothing. Would not it be better if we invest more in R+D+I and get something back and grow, learn and enter in the 21st century?

We should think in something more that construction industry.

Currency war

It is not unknown the great Chinese economic growth, but maybe is not so known the cold war which is being fought between USA and China due to the currency devaluation to increase their exports.

Some specialists do not want to call it war, but the truth is that the “old red phone” is now of the hook

United States has been living above its possibilities, its expenses were much higher than its returns, however, now is trying to save, but the consumption is lower, for that, exporting is so important, to keep the economic growth, that is the reason why USA is trying to devalue the Dollar, to make it cheaper for the other countries and make their purchases in America cheaper.

At the same time, the Dollar devaluation is not in the interest of China, because its currency would be more expensive and its exports will decrease and it will have to increase the intern consumption and save less that is why China is also trying to devaluate the Yuan and buying American debt, and here is another reason why the Americans do not want the dollar to increase its value, because they will have to pay less for its debt.

Summarizing, China wants to devaluate its currency, other Asian countries which do not want to have a disadvantage (including Japan) are doing the same, USA does not stay behind, so, who is losing more in this war is the Euro because countries like Greece, Spain, Portugal, Ireland and Italy do not want a revaluated Euro, because the need to export to avoid their economic problems. If the Euro price increases, they sell less. In this war, nobody wants to lose.

Let’s hope this war to finish, because the history tells us that in the thirties, the consequences of a similar war were not very positive.