Innovation, digitalisation and a clean and circular economy could be the pillars to face the crisis

José Andrés Faíña, professor emeritus at the University of A Coruña and president of the GCD research group, highlights the importance of digitalisation and innovation as opportunities to deal with the crisis stemming from the Covid-19 global pandemic.

“To adjust teaching and research to the new situation has been a tough task but very positive”

Professor Faíña is a professor emeritus but he is still active at the Chair of Jean Monnet and in the direction of the UDC’s Master of Innovation and Digital Strategy. Teaching in these programs changed to videoconference, a difficult job for all the teachers but, according to him, it was a very positive and successful experience. “We have adapted very well because they are mature students and we have already created a personal relationship of mutual trust and established work habits.”

“In research and transfer activities field, we took advantage of the deployment of online tools (teams and sharepoint) to continue with the activities. We even worked much more, due to the tendency to use the accessibility of online during long hours. In regarding my responsibilities as a member of the Clusaga Innovation Commission and the Technical Committee of the Business Factory Food (the vertical accelerator of the Galician food sector), many activities continued online and we even had telematic work sessions. We must highlight the webinars on the effect of the Covid-19 crisis in electronic commerce, the presentations of innovative projects and the start of the call for the second phase for consolidation projects of this BFF accelerator “.

“The economy paralysis is causing extremely high costs and it will not be easy to recover the growth gap (known as the U-shaped recovery to the economists)”

Despite the fact the situation arising from the pandemic has had positive effects on teaching, the drop in sales and the closure of non-essential activities have caused one of the most important global economic crises in recent years. “The crisis  final effect will depend on three main factors: 1) trends of accelerated change and innovation in an interconnected world where the revolution in information and communication technologies is taking place. 2) The increasing pressure of serious environmental issues about climate change and finally 3) the new economic, social and environmental European and international policies “.

Innovation, technological change and competence as main drivers to rid of crisis

Professor Faíña explains that these are the pillars on which to bet to reactivate the economy and growth. He underlines the archetypal model of innovation and the ecosystem of startups in America, know as GAFA Economy (Google, Apple, Facebook and Amazon, to which we can add the Chinese Alibaba). This model generated and is generating new businesses and companies with disruptive capacity that have radically changed the structure of the current economy. In Europe, by contrast, the archetypes of innovation are based on the support of technology centers and organizations that promote innovation by facilitating the technology  “transfer” between sectors and agents of the economy. The new model that has led Germany to be a leader in innovation, the so-called “Industry 4.0”. “Europe cannot be left behind, it must continue with the effort in research and innovation smart specialization strategies (known as RIS3). They were launched within Horizon 2020 and now they have been strengthened on the innovation and digital transformation agenda in the EU, promoting the Digital Innovation Hubs.

Will Galicia be able to protect growth and maintain employment through innovation and digitization?

“On the one hand Galicia has a map of more than 130 startups, research centers and institutes and a solid network of technology centers. On the other hand, the regional government has the promotion institute (IGAPE) and the capital fund manager (XESGALICA), as well as the new Innovation Agency (GAIN). It promotes a wide Galician network of enterprise incubators and accelerators (Start in Galicia). According to the European innovation model, it also has vertical enterprise incubators and accelerators. Moreover there are interesting initiatives from important companies such as the program “The Hop, Estrella Galicia”, to develop entrepreneurial talent in collaborative open innovation; and the Abanca Innova workspace. So now the most important thing is to continue strengthening the innovation system and take advantage of the digital transformation and innovation agenda momentum of the EU’s within the great Green Deal agreement and the Covid-19 crisis Recovery Plan.

The European Commission “Green Deal”  will help launch a recovery plan and will address serious environmental problems

“This European policy main purpose is to transform our economy for a sustainable future, fighting against climate change and establishing important objectives for 2030 and climate neutrality by 2050. It will promote a supply of clean and safe energy at affordable prices and it will mobilize industry for a circular economy (without waste). It will also drive concrete actions and objectives for health: environments free of toxic and pollution, restoration of ecosystems and biodiversity, and a healthy and environmentally-friendly food system”.

Galicia will have to adjust its energy industry in accordance to decarbonization and efficiency

Despite the fact our community has the necessary resources to face the new situation, it will have to carry out a great transformation of production processes and business models in order to turn into a sustainable system. We know that we must work and strive for it but the great goals of the Green Deal can be achieved. According to Professor Faíña, the most difficult points will be those related to the energy and electro-intensive industries, which will have an impact on employment. The result will also depend on the compensation plans and the European funds planned for these issues.

“We will see how far the cuts go but there will be and they will affect the Galicians”

The UDC professor affirms that this new European policy will mean a reduction in the expenses and aids of the PAC, the agrarian guarantee fund, and perhaps also the incentives for the rural development of the agrarian fund. “An attempt will also be made to reduce the expenses of the regional development funds. We will see if these cuts are compensated by the aids to fight the effects of the economic depression caused by the Covid-19 crisis.”

There is hope for Galicia but the situation is going to be complicated

The situation caused by the pandemic leaves a expensive prospect for employment and Galician economy for the coming years. It will be particularly hard because of the impact on electro-intensive industries and the closure of thermal power plants, in addition to the uncertainties of Brexit and its possible impact on the fishing sector. In any case, J. Andrés Faíña is optimistic and insists that Galicia today has leading companies and a solid business system. It also have an important international opening and a relatively mature entrepreneurial ecosystem. “Of course it will not be easy and we will have to work on it, but with everyone’s effort and sensible policies, there will surely be an ideal solution.”

Moving the economy and industry towards the new paradigms will be the key to recovery

Faíña explains that the recovery basis will be in supporting  young people and unemployed in order to redirect their education and professional training towards the new sectors and occupations. “It will be essential to support economic systems and companies that bet on climate neutrality, circular economy and environmental recovery. In addition, it will also be very important to promote occupations linked to the digital agenda and European innovation. Measures such as the introduction of a minimum income system is, from this perspective, a step forward in this new paradigm that is growing up and that will be implemented more sooner than later “.