European Commission

The population of Valencian Community (5,117,190 people) represents 10.84% of the Spanish total population, making it the fourth most populated Spanish region. The Gross Domestic Product in Valencian Community is 9.7% of the Spanish GDP. Regarding the structure of the GDP, the service sector has the highest contribution to the regional GDP (72.02%), followed by the industry (16.07%) and construction (9.93%). The primary sector represents only 1.99% of the regional GDP. The distribution of regional GDP among these sectors is quite similar to the national distribution of GDP, as 69% of Spanish GDP comes from the service sector, 14.3% from industry, 11.4% from construction, and 2.6% from agriculture.

The strategic sectors in Valencian Community, those that have an important weight or importance in the overall economy in Spain, are:

• ceramics and tiles (68.4%)
• shoe industry and leather goods (56.3%)
• games and toys (47.8%)
• wood and furniture (19.8%)
• textile and clothing industry (17%)
• automotive industry
• biotechnology

The first ones have a great importance because there is a lot of companies in those sectors and all these companies mean a large percentage of the overall sector in Spain. The automobile industry is a strategic sector because a multinational company has a plant in this region, supported by a large number of medium and small auxiliary companies. There are also a large number of medium biotechnology companies working in Valencian region.

As a result of the economic crisis that has made an impact on the global economy, some of these sectors such as ceramics and furniture (related very directly to construction), the textile and automotive industries have been particularly affected.

Regarding employment, the distribution by sectors is similar to the GDP distribution with services having the highest percentage of regional employment (71.80%), followed by industry (15.93%), construction (9.60%) and agriculture (2.67%). However, the total employment figures have been deeply influenced by the economic crisis, resulting in an important increase in the unemployment rate between year 2008 and 2011, reaching in the first period of 2012 the percentage of 27.32%. The specific rates within the three regions is the following: Valencia (25.28%), Castellón (28.19%), Alicante (29.94%).

Regional expenditure on R&D against GDP is 1.06% compared with the Spanish average of 1.39% (2010). The regional expenses in R&D represents 7.41% of Spanish total R&D expenditure. Valencia region has 19,488.7 staff in R&D (full time equivalent) which represents 9% of the Spanish R&D personnel. There are 12,076 researchers (full time equivalent) which represents 9.21% of the country's total.

The distribution of regional expenditure on R&D is the following: higher education institutions account for 44.43% of R&D expenditure, followed by companies (43.49%), public sector (12.04%) and non-profit private institutions (0.03%). It's important to underline that there is a big deviation among the shares of R&D expenditure in Spain.

Regarding business R&D expenditure, Valencian Community is below the Spainish average (54.91%) by approximately 10%. However the average of R&D expenditure by higher education institutions is bigger than the value of Spain (26.75%) by approximatley 18%.

The deviations can be explained by the strong education system in this region with seven universities and a big network of research centres. However, the industrial fabric consists mainly of SMEs with limited resources to invest in R&D activities.

The Valencian innovation system is made up of five distinct types of agents: the valencian society as a consumer of innovation and technology, the public sector, the science, technology and innovation offer together with support infrastructure for innovation, companies and financial agents.

Regarding the technological centres, REDIT is the network of technological institutes from Valencian Community and comprise 14 associated centres that offer a broad range of advanced services of R&D&I addressed to companies. Its mission is to contribute to recognition of the research institutes as an effective organisation model within science, technology and business system.  

Support structures for innovation are integrated by OTRIs (Transfer Office of Research Results), University-Enterprise Foundations, BICs, Network of Technological Institutes of the Valencia Community (REDIT) and Network of Valencian Universities for the Advancement of Research, Development and Innovation (RUVID), together with technology and science parks

The regional policy of innovation in Valencian Community is managed by regional public administration. The aim is to foster interaction between different stakeholders (companies, research centres and also public administration) to ensure a higher competitiveness of the region through access and application of new technologies and the development of associated knowledge. It tries to improve technological capabilities of Valencian Community supporting the generation of scientific or technical knowledge that allow to obtain products, processes or services with a higher added value. 

The main regional agent in charge of management, funding and evaluation of different policies is IMPIVA (Institute of Small and Medium Valencian Industry). It is an autonomic body in charge of innovation promotion assigned by the Valencian Government and subordinated to the Regional Ministry of Economy, Industry and Trade. In spite of being the main entity managing innovation, there are also other Regional Ministries (in the regional Government of Valencia) directly involved in many aspects or measures that promote innovation policies, e.g. the Regional Ministry of Education, Regional Ministry of Health, Regional Ministry of Economics, Treasury, and Employment, etc.

IMPIVA has programmes in support of SMEs and public entities and non-profit private entities that render their services to SMEs in the following areas

• Technology and R&D
• Creation and development of enterprises
• Design
• Quality and environment
• Organisation and management
• Training
• Technological cooperation.

The Regional Ministry of Industry, Trade and Innovation has a specific General Directorate of Industry and Innovation with two key programs:

• Industrial policy: supports activities of Sectoral Competiveness Plans and programmes in support of R&D Institutes
• Enterprise innovation creation and development of enterprise: supports strategic actions for sectoral diversification.

In 2009 it had a budget of more than €195 million.

The main objectives and trends of innovation policy developed in Valencian Community during the last years have been:

• actively promote innovation in enterprises as a way to improve competitiveness and wealth creation within a global environment of competition and cooperation
• promote the development of innovative companies to encourage the diversification of the industrial fabric of Valencian Community
• promote cooperation between scientific and technological innovation suppliers, connecting with the needs of Valencian companies as a way of raising the technological content of the business fabric of Valencia
• improve the training of human resources to suit the needs of business and the new knowledge society in general
• increase coordination in implementing innovative public policy applying an integrated approach to the various actuations that are designed.

The tools to fulfil these objectives are gathered in the following measures:

• Incentives for Technological Institutes and Entities
• Competitiveness Plan of the Valencian Company
• Aid for the implementation of strategic industrial diversification actions for the Valencian Community
• Incentives to companies for research and development
• INNOEMPRESA: programme to support innovation in SMEs
• Incentives for the promotion of the sanitary research in the Valencian Community

The main objectives of those priorities have not changed with the new policies that are being developed now for the region. The new strategy proposes to continue the shift in the Valencian industrial base fostering sectors and processes, which involve high technology.

To improve productivity and competitiveness of the companies, five ambitious objectives are underlined:

• business investment in innovation and technology must reach 2.3% of GDP in 2015
• more skilled human resources
• incorporation of innovative companies - 800 per year
• industrial diversification - more than 25% of employees in high-tech sectors
• high-tech exports must reach 45% of total exports.