The Balearic Islands and the challenge of getting off the tail in R+D investment

PalmaThe Balearic Islands face the challenge of moving out of the tail end of research and development (R&D) investment. The archipelago continues to occupy the last position among the autonomous communities in terms of the percentage of Gross Domestic Product (GDP) allocated to these activities, at 0.4%, compared to the 1.5% Spanish average. In other words, the Islands proportionally dedicate almost four times fewer resources to this than the state as a whole. A difference that highlights the path that still remains to be traveled, but which also puts on the table an opportunity to promote a more diversified, competitive economic model that is less dependent on tourism.

The latest final data from the National Statistics Institute (INE), corresponding to 2024, place the Balearic Islands' R&D expenditure at 176.35 million euros, 12.3% less than the previous year. The decline contrasts with the performance of Spain as a whole, where investment grew by 6.9%, reaching 23.931 billion euros. The gap is significant compared to communities such as Navarre, which allocates 2.34% of its GDP; the Basque Country, with 2.3%; and Madrid, with 2.18%. Catalonia also exceeds the national average, with 1.82%.

A challenge for the business fabric

The 2025 Report of the Economic and Social Council (CES) of the Balearic Islands delves into this situation and highlights the differences between the sectors participating in the research system. During 2024, R&D expenditure by companies decreased by 15.77%, while that of higher education was reduced by 33.65%. Conversely, the investment executed by public administration research centers increased by 33.4%. Despite this uneven development, the business sector continues to account for 40% of the R&D expenditure in the Islands, a figure that highlights the role that private initiative can play in the transformation of the production model.

The weight of tourism and services in the Balearic economy is one of the elements that must be kept in mind when analyzing these figures. But this specialization does not prevent the development of activities with higher added value. In fact, the challenge does not necessarily involve replacing tourism, but rather taking advantage of the economic strength of the Islands to boost new sectors, generate knowledge, and reduce dependence on a single activity.

The general figures contrast with the existence of companies that have managed to develop their own technology from the Balearic Islands and compete internationally. One of the most recent examples is Robot, the Mallorcan company specialized in building automation systems, especially hotels, which is currently immersed in a sale operation to the Swedish multinational HMS Networks for an enterprise value of 21 million euros. Founded in 1983, Robot has developed systems to control facilities, manage climate control, and optimize the energy consumption of buildings. Its trajectory demonstrates that the tourism sector itself can serve as a platform to create its own technological industry. The company has taken advantage of the needs of hotel establishments to develop products that can be marketed beyond the Islands.

Another prominent case is that of Sanifit, the biotechnology company that emerged from the environment of the University of the Balearic Islands (UIB), which developed pharmaceutical research on vascular calcification. In 2021, the Swiss company Vifor Pharma announced its acquisition for an initial payment of 205 million euros, with additional amounts conditioned on certain milestones.

These are two experiences from different sectors, but they share the same characteristic: the ability to transform knowledge into business projects with international projection.

More innovative companies

The CES data also offer some positive indicators. The number of innovative companies in the Islands went from 762 in the 2022 data to 1,160 in the 2024 data. Of the latter, 489 introduced innovations in products and 1,084 in business processes.

Business innovation is a broader concept than strict R&D investment, but these figures demonstrate that there is a productive fabric with a capacity for transformation. The question is to ensure that this dynamism also translates into more research, technological development, and qualified employment.