Exports of non-tourism services have doubled over the past decade and currently exceed those of tourist services, which constitutes a “very positive” aspect for the economy. Indeed, these are “knowledge-intensive” activities, which promote qualified employment and contribute to improving productivity.
This is one of the conclusions of the report entitled “The performance of Spanish exports: the keys to success”prepared by Fedea and published this Monday, which explains that these non-tourist services cover areas such as business services, IT and telecommunications.
Over the past three decades, Spain has managed to almost double its participation in the global economy thanks to its exports, already overtaking countries like France and Italy in terms of trade openness, although it remains behind Germany.. During this period, Spain has maintained its share of the global market for goods and business services, which is considered a notable success, especially when taking into account the rise of China. This country, which thirty years ago had a moderate presence in international trade, has become the main exporter of goods and one of the largest exporters of services in the world.
Multiply exports by two
Fedea highlights that over the last 30 years, Spain has almost doubled its integration into the global economy thanks to its exports. So, even if it is still far from Germany’s export opening rate, it already exceeds that of countries like France or Italy.
Concerning non-tourist services, the report highlights that business services dominate the sectorrepresenting 36% of the total, followed by telecommunications and transport, each with 21%. This is followed by repair and financial services, both with 6%, and those related to intellectual property, which cover 4%.
Between 2013 and 2023, telecommunications and IT services grew by 138%while business services increased by 131%. On the other hand, transport experienced more moderate growth, of 82%, according to the Fedea report.
In terms of destination of merchandise exportsFrance is Spain’s main trading partner, with 16% of the total, followed by Germany (11%), Italy and Portugal (both with 9%), and the United Kingdom (6%). . The report states that during the period 2014-2016, exports to the United States and China were expected to increase by 122% and 48%, respectively.
Exports of semi-manufactured products occupy a prominent place in Spain’s foreign trade, with 27% of total goods exported in 2023. Within this sector, chemicals represent 17%, capital goods 20%. %, the industrial food industry 18% and the automotive sector 14%.
On the other hand, in terms of digital transition, smartphones dominated Spanish exports of digital products in 2022, reaching $707 million, which is equivalent to 13% of these exports. This is followed by video game consoles (572 million, 11%), communications devices (421 million, 8%) and personal computers (325 million, 6%). It should be noted that Spain does not necessarily manufacture these products, but in many cases plays an intermediary role. In 2022, digital products accounted for just 1.5% of the country’s total exports, a figure that contrasts with 12% globally, 5.1% in Germany and 3.6% in the UK. According to the report, this suggests that Spain is not well placed to benefit from the growing demand arising from the digital transition.
The report also analyzes Spain’s position in exports linked to the ecological and digital transitions. As part of the ecological transition, Spain exported 277 of the 292 products classified as “green” in 2022, electric vehicles are the main product, with exports worth $4,027 million. However, the report warns that green products represent a lower percentage of Spanish exports compared to other European countries, such as Germany, Italy or the United Kingdom, which shows a loss of competitiveness compared to the China in certain clean technologies.
Where does this success come from?
The report analyzes the key factors that led to the success of merchandise exports in Spain. According to empirical analyses, export growth has been promoted by the creation of new export companies, diversification into new markets and products by already established companies and the strengthening of already existing trade relations. Likewise, the author highlights a change in the approach of Spanish companies towards international markets: If previously they only turned abroad during periods of national recession, since the financial crisis of 2009, we have observed a more regular presence on global markets. This indicates that international expansion has become a strategic pillar for many of these companies.
Another notable factor is Spain’s growing participation in global value chains, an important aspect of the hyperglobalization that took place between 1990 and 2008. Regarding competitive strategy, the report shows that the main exporting companies Spanish companies generally adopt a cost-based approach. According to the analysis, differences in export value between companies depend more on the choice of appropriate markets and products than on the number of destinations and goods to which they are exported.
The author Asier Minondo underlines that the export of this type of services “benefited from advances in information technology and communication”, which made it possible to “reduce barriers to entry into foreign markets”.
Regarding competitive strategies, Fedea indicates that the most successful Spanish companies in terms of exports generally opt for a strategy based on cost reduction. It also highlights that in terms of exported value, what is essential is not so much the number of markets and products addressed, but rather the correct selection of destinations and products in which a company can be more competitive and attractive.
Challenges and opportunities
The Fedea report analyzes both the challenges and opportunities that Spanish exports will face in the years to come. Although geopolitical tensions suggest a less favorable environment for continued export growth, Fedea believes that Spain’s specialization in the European market could be an advantage if global trade tends to be concentrated between politically aligned countries.
The automotive sector, key to Spanish exports, is impacted by the green and digital transition. The conversion to the export of electric vehicles will be essential for Spain to maintain its competitiveness in this sector. Furthermore, Spain’s strong presence in agri-food and pharmaceutical products offers stability in a context of less dependence on foreign countries.
On the other hand, the think tank warns against risk represented by the concentration of service exports in the tourism sectordue to growing concerns about the negative externalities of this activity.
Despite these challenges, the report is moderately optimistic about the future of Spanish exports. The factors that have led to its success over the past three decades, such as the growth of knowledge-intensive services, engagement in international markets, improvement in business management and the ability to compete in various sectors, should continue to favor the performance of Spanish exports.
