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Funds for Hidden Excellence

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In a few weeks the long-awaited Next Generation EU funds will start arriving in Spain. Its management is going to be one of the most important challenges that we are going to face as a country, since it will shape the innovation, productivity and efficiency of our economy in the coming years. Specifying the objectives to be achieved with these funds will not be an easy task. It is clear that they are granted to boost the economies damaged by the pandemic by promoting innovative production models. The areas of interest and lines of action have already been defined. And, with great consensus, it is understood that they will be the pillars of the future economy. So far, so good.

If we dig a little deeper, one might wonder whether these funds should remain restricted to the agreed areas or whether they should go a step further and open up to another series of innovations that have yet to be crystallised, but that could be key to the country's future development. When talking about innovation, where do we draw the line?

Innovation is not achieved by following a previously fixed path. Sometimes, there is a tendency to associate innovation with science, maintaining an academic point of view that incorporates the implementation of the scientific method to increase and document the in-depth knowledge of the subject in question. But it is also possible to innovate, for example, through engineering, in a wider sense, which combines various scientific branches to offer products and services oriented both to final consumption and to the production of capital goods.

Apart from the multiple avenues of innovation, it is difficult for me to imagine how a single country can manage to innovate in all the lines of funding envisaged, not even with unlimited funds. More so if that country has to overcome structural deficiencies in its investment in innovation compared to other nations around it, which have been allocating resources for years to the advancement of certain areas. It would be logical to think that a collaboration between all European countries could be more successful in materialising new production models than the sum of multiple local projects. Be that as it may, it seems that the path has already been taken. And in this situation, it would be advisable to consider some points to ensure the maximum success of this initiative:

  • Avoid the designation of funds to certain lines only because of the fiscal effect it will have for the State. A clear example is support for the deployment of 5G networks. It is not that universal access to communications infrastructure and services should not be promoted, but what should be avoided is to finance the acquisition of 5G frequencies by operators so that, in the end, the funds return to the State when the public auctions of these frequencies are held. This is not innovation.
  • Avoid relaunching obsolete production models affected by the pandemic. Rescuing companies is not innovation, although this brings short-term benefits, but the search for more efficient alternative models that enhance the same industry or economic model in a different way.
  • Leave room for the development of models that we cannot yet imagine. Traditional investors are already busy financing companies or projects that are clearly going to grow and produce profits. It is time to allocate part of the funds to innovation that goes a step further, that overlooks the established limits and proposes a model that we are not yet able to picture.
  • Allocate funds to the chosen lines, not to selected companies. The lobbies are now more active than ever, and they will surely take a significant share of the cake. Similarly, rather weak controls of the funds may cause revolving doors to end up causing a storm. Transparency and a strong attention to details are needed in the distribution of the funds, to ensure that they are allocated to projects of general interest, and not to the particular vision of a corporation.
  • Promote specialisation and excellence. Although in each line of innovation there an organisation is leading, the ideal would be that in all projects different sciences and disciplines were mixed in order to incorporate the excellence and specialisation of other companies, favouring, in this way, the capillarity of the funds among a larger number of companies.

Boosting innovation is not easy. Much less so in a country like ours, where excellence is almost always hidden in an SME without the necessary resources to be heard in certain forums. Establishing the mechanisms to give a voice to these companies and facilitate their participation in projects financed by EU funds is not only going to contribute to  a strengthening of the Spanish productive fabric, but also make the most of the capabilities, both technical and intellectual, that are currently working in the shadows.


Miguel Angel Garcia Matatoros

General Manager at Blue Telecom Consulting - BlueTC ®


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Guest 18 Jan 2022