Spanish productivity improved by 1% between 2022 and 2025, coinciding with a strong period of employment growth. This simple fact contained in the first report of the Productivity Council of Spain reveals the alchemy of the economy. The body of experts, to comply, made public this Wednesday its initial study on an indicator that was talked about a lot, but very little was known. And for the first time it gives a unified view of how to calibrate it.
Productivity measures the goods and services produced with certain resources (capital, technology, labor). , that is, with fewer resources. The 115 pages of the report outline the first Spanish-style roadmap of how to achieve this, complementing other leading recipes such as the report made by former ECB president Mario Draghi for the European Union.
The main recommendations are the same: boost private investment; generate more instruments to facilitate financing for companies; accelerate the adoption of artificial intelligence tools and unify the Spanish internal market, with emphasis on the adoption of the so-called Regime 20—a virtual autonomy that would allow a company to operate throughout Spanish territory without having to adapt to each legislation.
The experts, who have taken a year to write this first report, measure historical productivity in Spain and also salaries, which reflects the loss of labor participation over the last 25 years. That is to say, salaries increasingly weigh less in the economy. Since 1999, wages have increased below productivity, which means that the effort in companies was focused on generating profits instead of raising workers’ compensation. Productivity also grew by destroying employment, hence the importance of the recent improvement in a context of massive incorporations into the labor market.
However, since 2018, the accumulated growth in real compensation per hour worked rose by 7.7%, outpacing productivity per hour, which improved by 3.6%. This points to a distribution of economic benefits in favor of workers. Minimum wage improvements and the 2021 labor reform could have contributed to this rebalancing.
But to maintain the per capita wealth of the country, which is absorbing a large population while the native population ages, experts say that we must increase the pace of the increase in productivity and advocate using technology as one of the accelerators, as has happened in the United States. To this end, they urge expanding incentives for investment in technology and R&D&I by companies, as well as betting on human knowledge with measures to qualify workers in these areas.
The report calls for the generation of a national productivity strategy at the state level and with the participation of social agents. And that the impact on productivity of each public policy that is approved be evaluated (something similar to what is done with the gender or climate impact). Furthermore, it recognizes the role of European recovery funds to boost investment, especially those channeled through PERTE (strategic plans), and calls for their continuation. The sovereign fund announced a few weeks ago by the Executive will take that baton.
In this first diagnosis of the state of productivity in Spain, some black points that were already known are confirmed: the sectors that most drive productivity in leading economies – telecommunications, electronics, chemical and pharmaceutical industries – have less weight in Spanish employment. And an atomized business fabric also lowers productivity. Thus, large companies are 64% more productive, but this also leads to them having a lower labor force due to their greater capital intensity (as in the case of banks).
