In Spain, the business landscape of small and medium-scale innovation is dominated by Catalonia and Madrid, with the Canary Islands experiencing a significant growth in innovative SMEs. According to the Ministry of Science and Innovation’s registry, 50 new companies were recognized with this seal in the Canary Islands since 2019, representing a 294% increase compared to the national growth rate of 43.91%.
One reason for this growth could be the tax incentives offered by the government of the Canary Islands to activities involving research and development (R&D), including a 45% deduction on expenses compared to 25% on the mainland. The Canary Islands also benefit from special tax characteristics as part of the Canary Special Zone (ZEC), a low-tax area authorized by the European Commission.
The innovative SME seal has been awarded for a decade now, granted to companies that demonstrate innovative characteristics through patents, reports or official certifications recognizing their capacity for innovation. This recognition provides access to financial aid, Social Security contribution bonuses for research personnel, tax deductions for R&D, and opportunities for public procurement through Innovative Public Procurement processes.
From 2019 to 2024, a total of 991 companies were recognized with this seal in Spain, resulting in an impressive growth rate of 43.91%. By 2024, there are now over 3,000 officially registered innovative SMEs in Spain alone. This represents a business innovation ratio of approximately three companies per thousand active businesses. Navarra leads in terms of proportion of innovative companies followed closely by Catalonia and Madrid while Valencia also performs well.
Innovative Spanish companies continue to evolve with Catalonia maintaining its position as leaders in innovation followed closely by Madrid and Valencia Community. In particular, there was a significant increase in innovations seen among Balearic Islands which added an impressive fifteen recognitions in innovation alone.
Overall, it seems that various factors such as government incentives and favorable business environments are contributing significantly towards promoting innovation among small and medium-scale businesses in Spain.
