The 40% of the chemical industries and 24% of companies in the trade sector of the Valencian Community are considered highly competitive, which allows them to cope with the post-collect recovery in a better starting position, as reflected in the latest report of the Observatory on Government, Strategy and Competitiveness of Companies (GECE), promoted by CaixaBank and the Valencian Institute for Economic Research (Ivie) and entitled 'Analysis of the most important sectors in the generation value and competitiveness levels.'
The new document analyses the characteristics and levels of competitiveness of the sectors with the greatest weight in the generation of value and employment in the Valencian economy and reflects on the implications that these aspects have on resilience and strategic response to the current situation.
In the field of private services, the sectors with the greatest weight in the Valencian economy are trade, real estate, hospitality and transport. In total, they account for 67.8% of value added (VAB) and 60.6% of employment generated in private services. But trade is the main generator of income and employment, providing 26.1% of the income generated in private services (17.2% of the total value added of the Valencian Community) and 35.3% of private employment (25.0% of total autonomy).
The trade sector, the main generator of income and employment in the region, contributes 17.2% of value added and a quarter of employment. It has a business structure with a strong weight of highly competitive companies, which account for 67.5% of value added and 59.2% of the employment generated in the sector.
Trade, which is so relevant in the Valencian Community, presents a solid business structure, with an important weight of companies of high competitiveness. 24% of companies in the sector are classified as highly competitive, contributing 67.5% of value added and 59.2% of the sector's employment. As for the industry, the ones that contribute the most to the Valencian economy are the agri-food industry, the azulejera, the automotive sector and the chemical industry. Together, they account for 43.1% of value added and 37.8% of the total manufacturing industry employment of the Valencian Community (6.5% of the total Valencian economy in VAB and 4.7% in employment). Although it is the agri-food industry that has the greatest weight in income and employment, companies with modest levels of competitiveness predominate, which together with its low technological intensity, is a brake on its ability to lead the economic recovery.
It is important to highlight the case of the chemical industry, another of the industries with a relevant weight and with a medium-high technological intensity, which is characterized by a business structure with 40% of highly competitive companies. The impact of COVID-19 on the chemical industry has not been one of the most negative. Although many of its subsectors have suffered restrictions on commercial distribution and slowing activity in other client sectors, some of the activities of the chemical industry have increased their demand as a result of the pandemic, especially those related to cleaning and hygiene products.
Among the manufacturing industry, chemistry has the highest levels of competitiveness, with 40% of highly competitive companies contributing 68% of value added and 59.4% of the sector's employment.
In the chemical industry, 68% of value added and 59.4% of employment are generated by highly competitive companies, which puts this sector in a good position to resume growth after overcoming the immediate impact of COVID-19.
The GECE Observatory document also includes information on construction sectors and real estate activities in its analysis. Together, they contribute 23.8% of the added value and 10% of employment to the private sector of the Valencian Community (19.7% of the total Valencian economy in VAB and 8% in employment). While in the case of real estate activities, almost half of the added value comes from highly competitive companies, in construction their contribution stands at 41%. These sectors have been greatly affected by the growth of economic uncertainty, but their position to deal with this new circumstance is much more favourable than they did in the previous economic crisis.
The low weight of high-tech sectors is a disadvantage for the regional economy in the face of COVID's challenges.
For Alejandro Escribá, coordinator of the GECE Observatory, the study of the weight of highly competitive companies in each sector "provides a valuable perspective to understand what the resilience and recovery capacity of companies will be". "With an overview of the different sectors, it is also possible to anticipate the responsiveness of the Valencian economy and identify where the main public and private actions should be located, and the different needs that can be found in each sector," he points out.
Low weight in technology and knowledge
The document also warns of the relatively low weight of the high-intensity sectors in knowledge or technology in the Community, which has implications for the productivity and income of the Valencian economy and is a significant disadvantage in bearing the impact of COVID-19 and relaunching economic activity from the relaxation of measures. The percentage of industrial companies in sectors of high intensity in knowledge in the Valencian Community is 1.2%, compared to 1.9% in Spain. For knowledge-intensive service companies, they account for 23.4% of the total, two points less than 25.7% of the national average.
Thus, high-intensity services in knowledge in the region contribute only 11% of income and 9.4% of private sector employment, and technology-intensive industry generates 4.8% of value added and 3.4% of private employment.
