The institutional and economic strategies implemented by private and public agents should aim at smart development. How can this be achieved? Combining three elements: (i) a growth based on productive factors of quality —especially human and technological capital— and the continuous improvement of organizations’ productivity; (ii) policies aimed at ensuring equal opportunities of work and access to basic public services; and (3) a concern for welfare gains for present generations but without impacts on the environment that put at risk the welfare of future generations.
The 2014 BBVA Foundation-Ivie annual report has the subtitle The Challenges of Smart Development. This year’s edition reviews Spain’s economic situation in the highly competitive and demanding European and world scenarios, paying special attention to the structural problems of firms, education, employment, public and private finance and to poverty in Spain.
The report shows that the positive signs of economic recovery over the last few quarters, and the correction of imbalances, need to be reinforced by actions that consolidate medium-term growth which in turn generates more value added and more quality employment, and by effective public policies that prevent social exclusion.
The authors argue that Spain’s short-term challenges "have far-reaching effects and therefore need complex solutions". The interrelationship between the firms’ problems and the functioning of the institutions in order to achieve sustainable growth requires, they say, that the firms’ return to competitiveness must be accompanied by measures that favour socially inclusive development. Therefore it is crucial for job creation to continue, for it to be of high quality, and for the public sector to solve its performance problems, because they affect its financial sustainability and the efficiency and equity of its functioning.
They also highlight the need to regain trust, which has been damaged by the lack of opportunities and the corruption. "Without social capital today’s complex economies are more difficult to govern, economic efficiency and social welfare suffer, and growth comes to a halt" says the report.
On the other hand, there are three long-term challenges regarding a more productive, socially inclusive and environmentally sustainable growth. For this purpose, 20 proposals for action are included in the last part of the report.
Some of the main messages of the report are:
- Responsible proposals for a way out of the crisis need to recognize the complexity of the problems: there are no simple solutions.
- Without institutional trust the lack of readiness to collaborate to overcome the crisis and to reach agreements of general interest will continue.
- Without Europe it would be more difficult to design a strategy for Spain in the world scenario; the road that the EU follows will determine our evolution.
- The solution is that firms, families and Governments make decisions to change the exhausted patterns of behaviour and take the necessary risks to be confident about the future.