Monday, July 4

2022: A key year to invest in digital and sustainable innovation

The year 2021 has been marked by the gradual recovery from the crisis caused by COVID-19, both in the health and economic fields.

Mass vaccination has played a very important role in recovery, by allowing the gradual lifting of the measures to contain the pandemic, and with it the strong recovery of household consumption and, especially, that of the tourism sector, so necessary for our economy. A good indicator of the strength of consumption is the growth in card spending, which for BBVA customers in 2021 has exceeded the 2019 figures by 25%.

Nonetheless Spanish companies still face a complex environment by factors that are being more persistent than expected: the interruption of supply chains, the increase in the price of energy and higher inflation. Too we are faced with the appearance of new variants of covid, like Omicron, whose consequences are still uncertain and affect the confidence of economic agents.

In 2022 we expect continue with the growth of our economy, which BBVA Research places at 5.5% of GDP, and that these uncertainty factors are gradually dissipating. One more time, private investment will be the critical element, the most important to drive the recovery, the generation of employment and the economic and social development of our country.

I believe that all companies have to take advantage of the new environment to invest in its digital and sustainable transformation, especially those of smaller size for whom these investments represent an opportunity for the future. Confinement has accelerated digitization and consumption on purely digital channels. But beyond digital, we are witnessing an unprecedented wave of disruption driven by innovation in practically all activities and sectors.

Among all these trends, without a doubt the most relevant is decarbonization. We have 30 years to ensure that society works without emissions of gases such as CO2 or methane, a huge challenge that requires changes in our habits and behaviors. But it is also a huge source of opportunities, since it takes a lot of innovation, and a lot of investment to deploy new technologies in practically all sectors. We need an unprecedented level of investment for this transition, of around 5% of world GDP until 2050.

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For all that investment to take place it is very important that the right incentives are developed. It would be especially necessary to develop an effective issuance market, with liquidity and integrity, which serves to “put a price” on them. Also that existing subsidies for emission technologies are eliminated, and that the transition is explicitly supported (for example with signals of demand, with regulation, or with guarantees). In Spain, in addition, we must take advantage of European fundss. In 2022, it is a priority to accelerate its execution, eliminating existing bottlenecks and ensuring that they reach everyone, especially SMEs, for their transformation.

Addressing this challenge will once again be one of the priorities on the agendas of governments, including emerging countries. These countries should also decisively join the race towards decarbonisation, for which they must have financial and technological support from developed countries.

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