Spain’s new Foresight Office Completes its First Big Assignment: a Strategy for Remaking the Country by 2050
In January 2020, the Government of Spain established a strategic foresight office at the center of government. The Oficina Nacional de Prospectiva y Estrategia (National Office of Foresight and Strategy) was set up within the cabinet of the Presidencia del Gobierno (Prime Minister’s Office).
The rationale for creating the office was to counter the short-term thinking prevalent in government, and to ensure the future interests of Spain. The office is charged with analyzing empirical evidence to identify possible demographic, economic, geopolitical, environmental, social, educational and other challenges and opportunities that Spain will confront in the medium and long term, and help the country prepare for them.
Since its creation, the office has been primarily focused on the preparation of long-term national strategy, España 2050, which was publicly announced on 20 May 2021 by Spanish Prime Minister Pedro Sánchez.
The strategy is presented in a hefty 676 -page report. Its purpose is to improve understanding of major issues issues that Spain will face in the coming decades, and generate a national dialogue on priorities and coordinating efforts needed to ensure future prosperity and well-being.
España 2050 identifies nine major challenges that Spain must address over the next three decades in areas such as climate change, shortcomings in the education system, aging, a shrinking labor force, inequality and depopulation of the countryside.
The report includes 200 proposals for action, as well as some 50 targets and quantitative indicators, to guide Spain toward becoming one of the EU’s most advanced countries, and to track progress along the way. More than 100 experts from various domains contributed to the report’s elaboration.
Following are selected highlights of España 2050.
Shrinking Workforce Threatens Growth
Between now and 2050, the number of people in Spain between the ages of 16 and 64 could fall by 3.7 million, to below 27 million (1996 levels),
even if the birth rate rises and hundreds of thousands of immigrants are integrated every year.
In the absence of productivity improvements, a decline in the working age population could cause Spain’s economy to stagnate between 2023 and 2050. Annual GDP growth could slow to between 0.3% and 1.1%, much lower than the 2% annual GDP growth enjoyed by the country between 1996 and 2019.
To avoid this scenario, Spain will have to invest heavily in life-long learning, multiply its R&D efforts, modernize its productive fabric (taking advantage of the opportunities of digitization and ecological transition), encourage the growth of small and medium-sized enterprises, reduce distortions caused by administrative obstacles, and successfully tackle the problem of the black economy.
The report recommends that Spain take steps to increase the number of women, youth and people over 55 in the job market. It also advocates measures to better integrate immigrants in the labor market. A target is proposed to increase the overall employment rate by 15 percentage points over the next 30 years.
Increasing Educational Attainment
Compared to other EU countries, Spain has high repetition and drop out rates in its schooling. Learning outcomes are lower than the average of OECD member countries. In this context, the country will have to substantially reform its education system, taking into account both digitization and demographic change. In particular, Spain will have to transform teaching careers, modernize curriculum, expand the autonomy of educational centers, create an effective evaluation system, reinforce mechanisms to support the most disadvantaged groups, and promote education during the first three years of life.
The basic competences of Spain’s adult population are considerably lower than those of its peers. This situation will become a more significant liability for the country as the knowledge economy advances, technology transforms
productivity, the workforce shrinks, and global competition increases.
Consequently, Spain will have to reduce the share of the population with only a 10th grade education or less from the current 40% to 15%, considerably increase the proportion of people with a tertiary degree, and put in place a comprehensive re-qualification system that allows the country to update the competencies of at least one million workers (employed and unemployed) annually. Training programs will have to make more extensive use of digital technologies and hybrid teaching formats. These changes will be critical to the successful implementation of a green transition, and to ensure the sustainability of Spain’s welfare state over the long term.
Developing a Climate Friendly Economy
By 2050, Spain’s climate will be warmer, arid and more unpredictable than today. Without timely, forceful action, droughts will affect 70% more of Spain’s territory, fires and floods will be occur more frequently, the sea level and temperature will rise, and important economic sectors, such as agriculture and tourism, will suffer severe damage. Millions of people will live in water-scarce areas, and 20,000 will die each year from hotter weather.
To stave off a climate crisis, Spain will have to become a net-zero, circular economy by 2050. The country will have to make the most of its wealth in
renewable energy sources and electrify transport, reinvent value chains, rethink the use of water, reduce waste, develop organic agriculture, and promote green taxation.
(Spain announced its decarbonization strategy late last year. The government aims to go carbon neutral by 2050 and is now overseeing one of the fastest shifts away from coal the world has seen. Over the coming three years, Spain has committed €27 billion to green energy spending — a downpayment on the €750 billion investment it forecasts will be needed to fund the move away from fossil fuels.
By 2050, the decarbonization strategy envisages a 90% reduction in emissions, the reforestation of 20,000 hectares, and the recovery of 50,000 hectares of wetlands. Renewable power, meanwhile, will rise from 20% of the energy mix to 97%. A recently approved climate change law also seeks a 23% reduction in emissions by 2030).
Adapting to an Aging Population
During the next three decades, the life expectancy of the Spanish population
is expected to increase from 83 to 86. In 2050, one in three Spaniards will be 65 years or older, and for each person in this age group there will be only 1.7 people between 16 and 64 years old (today, there are 3.4). A somewhat higher birth rate and sustained immigration will not substantially alter this scenario. The trend threatens the sustainability of the welfare state.
To ensure continued support to the elderly, Spain will have to make use of technology, redesign part of its National Health System, ensure the sustainability and sufficiency of its public health system pensions, and enable the active participation of older persons in the economic and social life of the country.
The report states that way that Spaniards think about old age, and the division between work and retirement, will have to change. The old age of future will not be the old age of the past. It will start much later, it will be more dynamic, and it will not be so associated with phenomena such as inactivity or dependency.
Increased labor force participation, together with reforms in the health and tax systems, could limit the increase in public spending on pensions, health and care services to 25% of GDP, a level corresponding to current spending in Austria and France.
Promoting Balanced Territorial Development
By 2050, an estimated 88% of the country’s people will live in cities, and rural Spain will have lost almost half of its population. Unless action is taken, large cities and their metropolitan areas will become larger and less sustainable, and problems like urban housing shortages and social segregation will become aggravated.
In response, Spain will have to recover the compact city model and
proximity of the Mediterranean culture, promoting the creation of public and social housing, promote building rehabilitation, and nurture public or shared transport, as well as the pedestrianization of urban space.
In 2050, fewer people will live in rural Spain, but those who do could live better than now. Rural Spain (and medium-sized cities) will have to be revitalized through technological integration, public transport, teleworking, and economic diversification, taking advantage of the green transition, digitization and development of the “silver economy” (that associated with the needs of people over 50 years of age). Decarbonization of the economy will provide clean energy and new job opportunities even to the most remote locations of Spain’s geography.
Tackling the Rise in Inequality
Spain has been experiencing an increasing concentration of wealth in recent years. Aging, technological transformation and other trends will drive an increase in inequality. To prevent this, Spain will have to promote access to affordable housing, improve tax collection, make the tax system more progressive, strengthen social protection, and make educational, employment and productivity improvements.
España 2050 asserts that reducing inequality in Spain to the levels of the most advanced countries in Europe, and cutting the poverty rate in half, is fully feasible by 2050.
Boosting Participation in the Labor Force
The report proposes shortening the work week to 35 hours, and increasing the presence of currently under-represented groups in the workplace. In particular, steps should be taken to increase the number of women, youth and people over 55 in the job market. Efforts will also be needed to better integrate immigrants in the labor market.
The overall goal should be to increase the employment rate by 15 percentage points over the next 30 years to counter the impacts of population aging on the size of the labor force.
Increasing the Tax Take
The report proposes an increase in tax revenues from 35% of GDP in 2019 to 37% by 2030, 40% by 2040 and 43% by 2050, thereby reducing the current seven-point difference between Spain and the eurozone.
To do this, the government could expand taxable income, reduce some tax benefits, and eliminate the módulos system for the self-employed.
The report notes that different regions of Spain have widely varying rates of inheritance and gift taxes, and advocates that these be harmonized to avoid what is viewed as undesirable competition.
Higher taxes on alcoholic beverages, tobacco products and petroleum-derived fuels, as well as incentives to encourage a greener economy, are also proposed. The report advocates taxes to discourage vehicle emissions, a frequent flyer tax, and a distance-adjusted tax on plane fares.
España 2050 also addresses corporate tax reform, which includes action at the international level. Spain is urged to push the EU to harmonize categories of taxable income, a minimum tax rate, and a solution for taxing technology companies.
The underground economy is also targeted through greater coordination among tax agencies, improved information exchange, and a ban on tax amnesties.
Improving Public Administration
España 2050 sets out a series of measures to improve public sector efficiency, such as creating a culture of evaluation and accountability at all public agencies and departments. It also calls for digitalization of the public sector so that citizens can conduct most of their services online.
The report adds that, in the long term, artificial intelligence could be used to analyze information, design policies and evaluate services. Examples of useful applications include generation of real-time data on changes in the job market, the cost of medical procedures, and use of social services.
Other proposals include revamping civil servant examinations, and the introduction of continual training to ensure that government employees possess the skills required for the job at all times. The report also recommends a system of evaluation and incentives to promote and retain talent in the public sector.
To achieve convergence with the most advanced countries in Europe, España 2050 proposes more than 200 initiatives, grouped into 12 areas:
- Determined commitment to improve the training of the population, from birth and throughout life.
- Robust, ambitious support for innovation on all fronts.
- Substantial modernization of the country’s productive fabric and business culture.
- Transition towards a sustainable and environmentally friendly development model.
- Major expansion of opportunities for the young population, especially in areas such as education, employment and access to housing.
- Achievement of full gender equality.
- Promotion of legal immigration and recruitment of foreign talent to energize the economy and boost state well-being.
- Strengthened public services, with a special focus on education, health and care.
- Redesign of social benefits to progressively move towards a model that
protects citizens based on their needs and not just on their employment history.
- Improved tax collection and a more progressive tax system to enable financing of a strengthened social welfare system without threatening the sustainability of public finance.
- Modernized public administration to generate efficiency gains, and
design public policies to give greater attention to evidence
empirical, experimentation, evaluation, social collaboration, and
the trade offs involved with each measure.
- Cross-cutting commitment to the rights and interests of future generations.
What’s Next for the Strategy and Spain’s new Foresight Office
According to Iván Redondo, director of the Prime Minister’s cabinet, “España 2050 is a vision, an exercise, a reflection, a horizon, a commitment, a territory and a space for dialogue to measure, analyze and act.”
In the coming months, the report will be discussed in meetings and at round tables organized with representatives of local and regional authorities, businesses, labor unions, universities, think tanks, foundations, NGOs, and political parties.
Preparation of the voluminous long-term strategy has kept the National Office of Foresight and Strategy very busy. But the newly created entity has other ongoing responsibilities. For example, it prepares forward-looking analytical reports for the prime minister’s office, and provides technical assistance to government ministries in the design of long-term policies and the development of anticipatory governance.
Shortly after its creation, the office elaborated epidemiological, economic and social scenarios that could emerge during the COVID-19 pandemic.
The National Office of Foresight and Strategy — and the Spanish government more generally — have quickly integrated into Europe-based networks on foresight. In November 2020, Spain became a founding member of the European Government Foresight Network, an initiative launched by the European Commission to coordinate work among strategic foresight offices of EU member states, and to facilitate their contribution to strategic thinking within the EU. It also participated in the ministerial-level launch of this network on 17 May 2021 in Coimbra, Portugal. Spain is also participating in foresight-related forums organized by the Paris-based Organization for Economic Cooperation and Development.