Spain aims for Digital Transformation

  • June 24, 2024
  • William Payne

Hard hit by Covid-19, Spain received one of the largest budgets under the European Union’s Recovery and Resilience programme, part of the EU’s NextGenerationEU.

The NextGenerationEU programme is a €807 billion programme to transform the EU through investment in digital technologies, infrastructure, renewable energy and transport modernisation.

The initial spur to NextGenerationEU was the Covid-19 crisis, which caused repeated waves of deaths across Europe, and disrupted the continent’s economy and society.

The outbreak of war with Russia’s invasion of Ukraine in February 2022 brought a further wave of economic and social disruption to Europe, as well as being the largest inter-state conflict to erupt on the continent since the Second World War. A major energy and cost of living crisis was sparked in Europe following the outbreak of the war, and the NextGenerationEU programme was updated and revised to accommodate these changes.

Spain was one of the worst hit European countries by Covid-19. The first confirmed case of Covid-19 in Spain was in January 2020, and mass transmission took hold in February 2020.

Spain suffered at least 121,800 deaths from Covid-19. These figures are believed to be an underestimate. Many deaths are believed to have been unrecorded as due to Covid-19. In particular, there were many deaths in nursing homes and in the community that may have been misattributed.

Against the backdrop of the Covid-19 crisis, Spain was awarded €163 billion by the European Commission. This is just over 20% of the entire Recovery and Resilience budget for a country that represents 10% of the population of the EU.

Spain’s original Recovery and Resilience plan focused heavily on modernisation of healthcare and administrative structures. These were both seen as having suffered failures of capacity and resilience during the crisis. The plan included digital transformation of both healthcare and administrative systems. There is a strong focus not only on centralised and urban facilities, but on remote, local and community healthcare and administration. Spain is one of Europe’s largest country’s, and away from the coastal zones and certain urban centres, has one of the lowest population densities in Europe.

Following the energy and cost of living crisis in Europe arising from Russia’s invasion of Ukraine, countries revised their Recovery and Resilience plans, and Spain increased its focus and investment in energy infrastructure, renewable energy and electricity transmission networks, including a number of mooted energy transmission networks to better connect Spain’s energy grid with central and southern Europe, including Germany and Italy.

Spain’s plan includes €10.2 billion to promote digitalisation of industry, manufacturing and SMEs, investments in AI, digitalisation of tourism and culture systems, and €15.4 billion to support fixed and 5G connectivity, data infrastructure and related ecosystem.

The plan also includes a Digital Spain Agenda 2025, a 5G cybersecurity law, an Artificial Intelligence strategy, a digital skills Plan and a law on telecommunications to upgrade the country’s regulatory framework with new regulatory and enforcement instruments.

Modifications to Spain’s plan following the invasion of Ukraine doubled investment in digital objectives, from €19.7 billion in the original plan to €40.4 billion in the current plan.

Although a sizeable part of the budget addresses issues identified by the crisis, Spain is also using the funds to build for the future. Funding on AI, manufacturing and AI seek to reposition Spain to tackle future business and economic challenges.

As part of its revised plan, Spain has drawn up a ‘National Artificial Intelligence Strategy’, which seeks to position Spain as a leading country in AI, and to position the Spanish language as a major component in LLMs and GenAI.

A separate National Digital Skills Plan aims to train the population in digital skills, with a particular focus on at-risk groups, and to reduce the gender-gap in employment.

Spain also aims to become the audiovisual hub of Europe through its Spain AVS Hub plan. A series of investments from its RRP and tied reforms aim to strengthen the country as a global hub and major global exporter.