The divide between retro-capitalism and turbo-capitalism

The divide between retro-capitalism and turbo-capitalism

Jordi Sevilla and Miguel Marín, economists

Key points
  • 1
       For several decades, the Spanish economy has been experiencing the advance and widening of a divide that reflects two coexisting economic models: turbo-capitalism and retro- capitalism. Largely, this divide is the consequence of structural transformation processes such as globalisation, and the technological and digital revolution in which society finds itself immersed, but it is also a result of the structural problems that have been inherited from the past.
  • 2
       The turbo-capitalism model is subject to parameters such as internationalisation, digitalisation, training and innovation. However, retro-capitalism is characterised by presenting greater protectionism with regard to foreign relations and less intensity in terms of technology and innovation. Furthermore, it contributes less added value to the economy and has to resort to public support to survive in the face of economic crises.
  • 3
       The processes of structural transformation in which society is immersed, specifically globalisation and the digital revolution, have brought with them evident gains in both the economic and social spheres, but they also pose threats and substantial challenges. In general, these are related with questions such as increased inequalities or the polarisation of employment, with highly differentiated working conditions, but they also directly influence the duality of the production structure.
  • 4
       Phenomena such as digitalisation and globalisation intensify business segmentation, to the extent that technological advances are concentrated into groups of companies that are capable of internationalising their services and competing globally. Found at the opposite pole are mainly smaller companies without the capacity to tackle these transformations, for which reason, in relation to the first, they end up falling behind.
  • 5
       The divide is manifested, above all, in a very evident dichotomy. In Spain, an important group of companies that could be termed nomadic function with international logic and are perfectly competitive on a worldwide scale. However, the large part of the business fabric is formed by companies that could be called sedentary, closer to the old logic of protectionist capitalism. Their differences, above all of an economic type, are due largely to the greater weight of this character, to a certain extent retrograde, of the country’s production fabric. However, this characteristic cannot be identified strictly with any specific size or sector, since it is to be found disseminated throughout all of them.
  • 6
       Overcoming the divide between retro-capitalism and turbo-capitalism requires policies of structural reforms such as those that are proposed at the end of this report. However, it is worth knowing where the underlying problem lies, to avoid continuing to insist on seeking solutions in places where it does not make sense.
  • 7
       The information collected in this report that is based on the Bank of Spain Survey on Business Activity (2020) enables confirmation that the 7 impact of the covid-19 crisis has not been evenly spread, but rather it has affected certain sectors with greater intensity. The smallest-sized companies have recorded substantially sharper falls in terms of both invoicing and employment.
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Jordi Sevilla and Miguel Marín , economists

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