<B>Welcome, Mr Marshall</B>

Rafael Pampillón. Director. Economy Area. Instituto de Empresa

17 February 2005

Many Spaniards dislike politics, especially the defence policy of U.S. President George W. Bush. But that doesn’t mean Spaniards are anti-American.

Many American citizens are also against Bush’s policies. In Spain, U.S. nationals and companies have always received a warm welcome, but that doesn’t imply agreement with presidential politics. The United States has a long history of business presence in Spain; in particular, direct North American investment began in the mid-1950s, together with the reception of official subsidies from the U.S.

At present, U.S. transnational companies in Spain are well distributed across different sectors. Although it can be said that the highest participation is in industry (the auto industry and components, pharmaceutical and chemical products, capital goods and industrial supplies), their presence in the services sector has increased in recent years, especially in IT and consultancy activities.

The initial results of a research project being carried out at Instituto de Empresa for the American Business Council indicate that participation of U.S. companies in gross industrial produce (measured through gross value added) totals 8.2 percent (the figure reflects the low presence of American investors in farming and in certain branches of the services sector). However, presence of American industrial companies in the Spanish industrial sector is less significant. American industrial firms represent only 3.9 percent here. The difference between the figures for industrial produce and employment point to higher worker productivity in companies with U.S. share capital.

Technology is another contribution of key importance provided by companies of American origin to Spain’s industrial fabric. This can be seen at a macroeconomic level in the numbers for expenditure on research and development (R&D) by North American companies in comparison with Spanish companies. As a percentage of total Spanish spend on R&D, North American firms represent an average 4.8 percent of the total between 1989 and 2002, a proportion that is four times greater than their participation in the country's GDP (1.8 percent). In other words, U.S. R&D in Spain has been much more intense than R&D carried out by the Spanish economy. If we compare R&D spending by American firms with the private spending on R&D by Spanish companies, the difference is even greater: U.S. companies were responsible for more than 9.3 percent of the total R&D outlay in Spain’s private sector, on average, between 1989 and 2002.

As a consequence of this contribution of technology and knowhow, direct U.S. investment tends to increase the productivity of the Spanish economy as a whole. The aforementioned research at the Instituto de Empresa for the American Business Council suggests that in the period 1996-2002, the productivity of U.S. companies in Spain was higher and grew faster than their Spanish counterparts.

The United States is the leading foreign investor in our country. For Spain, U.S. presence means more economic growth, higher employment, greater productivity, and of course increased income per capita. Many years of American investment in Spain have assisted our economic miracle. Keeping and expanding American investments here will let us boost our productivity, which is one of the government's main objectives.


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