A walk down the memory lane of our economic success

On the occasion of the 25th anniversary of the Estrategia Empresarial Journal and the celebration of its success, it seems a timely opportunity to recall the trajectory the Basque Region has taken to attaining the levels of competitiveness and welfare that we currently enjoy. The journey has not been an easy one, but it has been exemplary, as a shared project and coherent strategy, where decisive action by both public and private players contributed to assure our competitiveness in the international arena.

It is worth stopping for a moment to look back on what was our point of departure before this transformation took place; a necessary exercise since it has by no means been a straightforward achievement, nor will its ongoing success be easy to achieve. In the early 1990's, Euskadi was going through a tumultuous time; it was inundated with wide ranging challenges and worries. Although it is true that the foundations for economic recovery had already been laid, and the Statutes of Self-Government had been guaranteed by law, the implementation of the latter was far from complete, (and continues to be so today). Furthermore, with a weak European Union and a fragile, fledgling Common Market, meant that the overall outlook here in Euskadi was far from promising.

Finding ourselves in the midst of a serious economic crisis, we were faced with the daunting task of implementing a radical and complicated redirection in terms of industrial strategy, moving from heavy industry to one of manufacturing, modernized and flexible. In that period, unemployment was at crippling levels of around 25%, even reaching 30% in certain areas, and at that time, social tension and political violence were a plague on Basque society. And then, to make matters worse, sadly, business owners were socially stigmatised by many groups, and public and private investment overall were drastically reduced. So, it is no surprise that when looking at the big picture of an outdated industrial network, urgently in need of modernisation, and a scarcely perceptible international presence, it was, quite frankly, a tall order to actually turn things around.

Without cracking open the bubbly (since we still have much work ahead of us!), I believe, nonetheless, that Basque society has progressed leaps and bounds in terms in its road to competitiveness. Nowadays, we have many things to be proud of: We have a highly inclusive society, with amongst the lowest levels of social inequality in Europe, although this figure has risen in recent years due to the grave economic recession. We have achieved notable levels of development in our strategic sectors in addition to our formidable science and technology network. We have also managed to bring Added Value to the products and services we market which has paid dividends beyond our borders, since we have now attained significant competitive positioning internationally. In short, and thanks to many players, we can confidently claim that the industrial and economic ecosystem of our nation is quite healthy.

So, just how was this success achieved? In my opinion, this success is explained by a number of factors such as a consistent and coherent industrial policy which provided our business leaders with direction and stability, as well as striking a fine balance between wealth creation and a reduction in social inequality as a collective strategic approach. Another important ingredient is firmly committing to industry as the backbone of our competitiveness due to its enormous potential for economic development, job creation, and boosting R&D, and the creation of stable frameworks for public-private partnership aimed at developing strategies for transformation. Moreover, the increased involvement of business with society, and the role it plays in improving wealth and welfare overall, along with the transformation of countless individual companies, have without a doubt, all contributed to the success we see and enjoy today.

Despite all these successes, we must not give in to complacency. We still have a long way to go, and we face many obstacles and challenges in future if we wish to continue progressing towards our aim of becoming one of the most cohesive societies in Europe. Currently, we must deal with a turbulent and disoriented world in terms of policies and practices affecting competitiveness, and in terms of demographics, the future presents a series of complicated challenges, as finding the right talent to ensure our competitiveness is by no means guaranteed. We must, therefore, come up with mechanisms which create stable, quality employment, whilst simultaneously reinforcing fair income distribution. Finally, successfully adapting to Industry 4.0 and ensuring that the Basque business network has its place internationally are essential components to our continued economic health in future.

I believe that bolstering our capacity for self-governance is fundamental to consolidating both our policies of wealth creation and our ability to fortify our social cohesion. Indeed, it is essential if we wish to pave the way for a better future for our country.

Article published in the special edition "25 años en positivo" in Estrategia Empresarial.

Sabin Azua

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