More risk and less subsidy

We can only compete with Knowledge. It is clear that we do not compete on price, and Spain is well placed to compete on Knowledge. But not by following the technological model of technology transfer to large companies, typical of Northern Europe; nor by following the North American model of avant-garde research (DARPA), not even with the Asian cluster model. We are a country of industrialists, of industrial SMEs, and there is a good future there.

Subsidies respond to economies of scale, I mean, it costs the Administration similar work to evaluate a subsidy of €100,000 than one of €1,000,000; so they favor large companies, and we are not a country of large companies.

The SME is where Development takes place, especially the industrial SME. Research is done in public centers and innovation in large companies, which have a commercial network capable of packaging the development done in the SME and bringing it to the market.

That SME that develops, the one that can change our economic model, does not seek subsidies. There are SME developers that are born to seek subsidies, but they usually end up distancing themselves from the market, and even become managers of subsidies for third parties.

The SME that develops and lives in the real economy needs two things from the Administration, the first is to be its first client, its first customer. early adopterwho takes risks. But those who manage public funds avoid this type of risk, try not to end up in jail, because, as it happens with soccer referees, getting it right is not valued, but getting it wrong is not allowed. The second thing you need is to help you to receive investment to grow, to develop new products. But back to the economy of scale, it costs more or less the same to evaluate an investment of 100 as one of 1,000, and the investors of low range have hung the sign of come back in 2011.


2 responses to "More risk and less subsidy”

  1. SMEs can benefit from many things, although I see it as complicated for the administration to be their first client and for them to get investment. Some more basic things that would help the creation of SMEs are the elimination of tax payments and self-employment fees until a minimum turnover is achieved, less over-protection of employees (which makes it almost impossible to lay off in times of crisis and rebuild), or even allowing to declare bankruptcy as in the USA (at least in cases where there is no clear mismanagement).

  2. Indeed, Javier.
    There is the paradox of companies that have received subsidies to develop a product. And they apply for a public tender and they are not accepted or they do not buy despite the fact that the product is good and adapts to the conditions.
    In Spain (and other European countries) there is still a fundamental component missing in the chain you describe: that large companies buy or invest in SMEs as a way of accessing this innovation.

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