In recent years, the business landscape of small and medium-scale innovation in Spain has been dominated by Catalonia and Madrid, according to the registry of innovative SMEs from the Ministry of Science and Innovation. However, a closer look at the data reveals that the Canary Islands have experienced significant growth in this area.
Since 2019, the number of companies recognized as innovative SMEs has increased by 50 in the Canary Islands, representing a whopping 294% increase compared to Spain’s own growth rate of 43.91%. This surge in innovation is largely attributed to tax incentives offered by the local government, such as a 45% deduction on expenses related to research and development (R&D) compared to 25% on the Peninsula.
The Canary Islands also benefit from being part of the Canary Special Zone (ZEC), a low-tax area authorized by the European Commission. This community has unique characteristics when it comes to tax matters, making it an attractive location for businesses looking to innovate and grow.
The Innovative SME seal has been around for a decade now, granted by the Ministry of Science and Innovation to SMEs that meet certain criteria such as demonstrating an innovative character through patents or reports supporting it or having official certifications recognizing their capacity for innovation. The seal offers various benefits to these companies, including express aid for innovative SMEs, Social Security contribution bonuses for research personnel compatible with tax deductions for R&D and I, and advantages in public contracting processes through Innovative Public Procurement.
From 2019 to 2024, over 991 companies in Spain have been recognized as innovative SMEs, resulting in a growth rate of 43.91% within five years. By 2024, there were a total of 3,248 companies registered as innovative SMEs in Spain. This trend shows no signs of slowing down anytime soon.
According to recent analyses, Navarra leads the way when it comes to proportions of innovative companies followed closely by Catalonia and Madrid before rounding out with Valencia Community completing the top four spots. In 2023 alone, Catalonia maintained its position atop all other regions with its highest weightage towards innovation while Madrid followed closely behind with Valencia Community joining them at third place. Lastly, Balearics made notable strides last year with many new innovations added under their belt.
In conclusion, small and medium-scale innovation continues to thrive across Spain with each region offering its unique advantages for businesses looking to innovate and grow. With continued support from both public institutions like ministries and private sector incentives like tax breaks or certifications; this trend is likely set
