The new economy in Spain: a regional analysis

Paper submitted to the 44th European Congress of the European Regional Science Association, Porto, 25-29 August 2004.

There is no enough evidence about the effects of the new information and communication technologies (ICT) in Spain and how these ICT cause differences between regions. So, the aim of this work is to analyze the regional disparities relative to the new economy in Spain. In the first part of this work, we will review the literature about the concept and measure of the new economy and the problems derived from the high number of definitions about it that difficult an homogeneous analysis. Despite of the several definitions, new economy refers, basically, to an economic development based in Internet and the technologic knowledge as the main inputs. Secondly, we review the empirical evidence about the location factors associated with the new economy. As we highlight in this section, the main conclusion is the complexity of the location dynamic related with the new economy because the results of the empirical studies range from the spatial concentration to the spatial dispersion. In the third section, we analyze the methodology and the empirical results. We collect regional indicators of the new economy in Spain trying to establish if the growth of the new economy in Spain has generated a high spatial concentration. But measuring the new economy at the regional level is even more difficult than it is at the national level because many of the most useful data tend to be nationally oriented. Therefore, it will be used a statistical database with the 28 regional indicators. The 28 indicators in this database are divided into 4 categories about the new economy: ICT industry, ICT services, the knowledge society and the information society. Firstly, we analyse the spatial concentration of the new economy variables in the Spanish territory with the aim of comparing the spatial concentration of the new economy with the spatial concentration of the economic activity. Next, we will construct a composite indicator that will give us the information about the relative position of a region in the new economy in order to find a variable that reflects the regional development of the new economy. Also, to compare the new economy indicator with the conventional economy it will be used the GDP per capita. As a preliminary result we find that the regional disparities in economic growth are more reduced than the regional disparities in the development of the new economy. So, the spatial concentration of the new economy is higher than the spatial concentration of the conventional economic activity. Also, a second preliminary conclusion is the relationship between a high economic development and a high level of the new economy. Finally, we conclude with an exposition of the main conclusions highlighting that the Internet and the ICT are an important progress instruments but can generate a growing of the regional disparities. Therefore, the role of the public sector promoting the introduction and development of the information and knowledge society, specially, in the regions with a low position in the new economy characteristics is essential.