A recent report commissioned by the Government recommends diversification as business leaders raise concerns about population growth impacts.
SANTA CRUZ DE TENERIFE, 28th June (EUROPA PRESS) –
Following a meeting in Tenerife, the President’s Advisory Council has decided to establish a working committee – known as the Canary Islands Productivity Council – in an effort to enhance productivity across the islands. Productivity levels in the Canary Islands have been declining, moving further away from the national average in recent years.
President of the Canary Islands, Fernando Clavijo, and Vice President, Manuel Domínguez, announced this decision after discussions with business associations CEOE-Tenerife and CCE alongside unions CCOO and UGT.
This committee, under the coordination of the Ministry of Economy, will comprise representatives from unions, employers, political parties represented in the Canary Islands Parliament, and various stakeholders, with a focus on incorporating successful strategies from other regions and countries.
The Government has initiated this proposal following a report from the Advisory Council, indicating a decline in productivity since 2002. The gap with the Spanish average was -182 euros per worker in 2002, which has now increased to -8,108 euros in 2022, resulting in a 18.5% decrease in convergence.
In addition to the committee, the Canarian Government will establish a Technical Office dedicated to monitoring productivity, analysing the impact of implemented measures in both public and private sectors, identifying factors influencing productivity, addressing gaps in comparison to other regions or countries, suggesting measures to enhance productivity in key sectors of the Canarian economy, and developing tools to promote training, innovation, and technology usage in economic sectors to drive productivity and competitiveness.
LEADING THE WAY IN CONSTRUCTION
The report highlights that in 2022, the construction sector registered the highest apparent labour productivity on the islands, at 94,032 euros per worker, while the services sector recorded the lowest, with 51,734 euros per worker.
The study identifies eleven economic sectors in the Canary Islands that have the potential to significantly increase productivity, surpassing the national average.
The most productive sectors include energy generation, telecommunications services, real estate, financial and insurance services, and rental services.
Other promising sectors are water treatment and distribution services, entertainment industry, food products, research and development, and computer products.
Clavijo stressed that improving productivity is a “challenge” for the upcoming 15 to 20 years, expressing confidence in achieving this goal. He highlighted the significance of enhancing the regulatory framework in the islands and promoting internationalisation of local businesses.
Domínguez supported the Government’s proactive stance in addressing the issue, advocating for diversification rather than a complete economic overhaul. He emphasised the importance of digitalisation, increased investment in R&D, internationalisation of companies, and fostering the creative industry to attract a skilled workforce.
CEOE URGES ACTION
CEOE-Tenerife President, Pedro Alfonso, expressed deep concern over the low productivity levels in the Canary Islands, stating that the archipelago has veered off course over the past two decades and needs to reverse this trend.
Alfonso called for intensified internationalisation efforts among local companies, attracting more foreign investments, and modernising tax incentives to boost productivity.
He also underscored the need to manage the population growth more effectively, as the region continues to witness uncontrolled growth, resulting in the Canary Islands still being one of the poorest regions in Europe despite GDP recovery.
Alfonso further insisted that improving productivity is crucial for increasing wages, debunking claims that low productivity solely rests on workers. He affirmed that entrepreneurs are not to blame for this issue.
UGT’s General Secretary, Manuel Navarro, expressed disappointment in the report, citing its limited focus on comparing regions without delving into underlying factors. Nonetheless, he noted that productivity tends to rise with increased salaries.
Inocencio González from CCOO stressed the necessity to pinpoint the causes of productivity divergence, a process that may span over several legislative terms. He proposed boosting business investments and enhancing research, development, and innovation initiatives as relevant steps.
