The State reaches a historic level of spending on research: 13.6 billion euros

Spain's public science system is experiencing one of its best moments in history, thanks to Europe. In 2024, the Spanish state public sector spent the highest amount ever on Research, Development, Innovation, and Digitalization ( R&D ): €13.6 billion, almost €2.5 billion more than the previous year. The 2024 budget was the second-largest in history allocated to these areas: €19.9 billion. 64% of this came from European Next Generation funds, according to the annual budget execution report prepared by the Cotec Foundation for Innovation.

The budget execution rate reached 68.3% last year, one of the highest in recent years, according to the report, which is based on data from the General State Intervention . €6.327 billion remained unspent, 54% of which came from Europe. EU regulations allow these unspent funds to be applied in subsequent years.

The spending achieved by the State in 2024 represents a significant contrast to what happened, for example, in 2018, when the Government spent only one of every two euros budgeted for research. Most of the money that never left the State's coffers was loans that had to be repaid, and that no one ever requested. Now the situation has changed.

European funds now represent 63.8% of the total R&D budget, compared to 36.2% from state sources. This structural change has been progressively consolidated since 2021, when European funds began to be incorporated into public budgets. While they represented 38.7% of the total in the first year, their share has steadily increased, clearly surpassing national funding since 2023.

These positive figures are in addition to the historic record of public and private R&D&I spending that Spain reached in 2023, also driven by the boost from EU funds. This funding channel has allowed autonomous communities such as Galicia and Asturias, traditionally distant from the innovation and research hubs of Madrid and Barcelona, ​​to experience the greatest growth in this field.

Available funds from national sources have also increased, but to a lesser extent. Since 2021, the budget has increased by €7.184 billion. The majority of these additional resources come from European sources (€6.291 billion), and a smaller portion comes from national sources (€893 million).

One of the most positive data points is that the execution of both the non-financial budget (the subsidies that fuel the scientific system) and the financial budget ( loans that must be repaid ) is increasing. In 2024, the Government spent 72% of all budgeted subsidies, which represents a significant recovery compared to the previous year, when it only managed to spend 61% of the funds. The unspent portion is money that appears on paper, but does not leave the state coffers. The 2024 figures are only a partial triumph, as they do not reach the execution levels prior to 2020, which were above 90%.

But what is most striking is that in 2024, 64% of the financial budget, on loans, was spent. This represents not only an increase of more than 21 percentage points compared to the 2023 figure (42.7%), but also the best budget execution rate for financial spending since 2010, when it stood at 70.7%. Part of the explanation is that inflation has made loans more attractive. Since mid-2022, interest rates began to rise, rising from around 2% to above 5% for much of 2023 and 2024, according to data from the Bank of Spain. Even after the recent declines, they are at levels not seen since 2013. In a context like this, state financial loans, often offered on more advantageous terms than those on the market, become much more attractive to economic agents.

“In budgetary terms, we're experiencing the best of times, and with all the investment we've made, we'll see significant progress,” summarizes Jorge Barrero, CEO of Cotec. “With NextGen funds, several programs have been launched on very specific topics, such as data spaces, which exceed the general call for projects during the worst years of the crisis. However, in some cases, these funding lines are having difficulty being implemented due to a lack of demand or a lack of experience and management capacity among the entities issuing the calls,” he adds.

Aleix Pons, an economist at Cotec who prepared the report with his colleague Ignacio Gordo, emphasizes that these record figures have been achieved with extended budgets. The fact that the budgets in 2024 were approximately €500 million lower than the previous year has contributed to an upswing in the level of budget execution. Pons adds that the data includes funds dedicated to digitalization. In any case, Pons emphasizes that it has taken 13 years and the availability of new European funds for Spain to be able to surpass the previous maximum levels of budgeted and executed resources for R&D, reached in 2009.

The big question now is what will happen "the day after"; when the European funding tap is turned off, something that will likely happen in 2027, explains Cotec.