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Merck's Warning

Merck's Warning

[Translation of El aviso de Merck, a leader published in La Vanguardia Digital on 23-May-2006.]

Our politicians, both in the central parliament and in the Generalitat in Barcelona, should be blushing with shame at the regular accusations of poor economic management they get from the multinationals. Volkswagen has repeatedly warned that Spain is falling behind in competitiveness. Now it is the turn of the pharmaceutical giant Merck who is complaining about the inadequate Spanish policies for research and innovation, exactly the type of activities that are needed to create the foundations for a new model of production that would assure a future of progress and well-being.

Merck is currently studying the possibility of making an important investment in research and development in Barcelona, but has expressed serious worries about a number of issues. The political climate for Spanish science is very unstable, changing every time the government in power changes and so hindering long term planning by multinationals. There are administrative hurdles in dealing with the government where it is not easy to come to agreements with four different ministries (Health, Education, Industry and Economics) whose interests are often contradictory. There are legal obstacles to performing clinical trials on human subjects in Spain. There are few direct incentives such as low interest rate credit or grants available for research and the recently announced tax reforms seem to be reducing and modifying the tax reductions that are currently available.

The complaints that Merck has recently expressed are the same as those made by the Spanish Confederation of Scientific Societies (Confederación de Sociedades Científicas de España). These are also the same complaints expressed by a number of Spanish industrial sectors who bemoan the excessive miserliness with which the government, and especially the Inland Revenue, regard tax deductions and other incentives for research and innovation.

The authorities would do well to take on board what Merck has said and start to correct their policies, not next year but immediately. The Inland Revenue has already taken a step in the right direction by deciding that the tax deductions for research will not change until 2012. The search for solutions to the problems described above should be made a priority for the political agenda, and the time to act is now. We must not lose the opportunity that Merck's investment will bring, nor those of other similar companies, because they are the key to success for the country and also, in this case, for the Barcelona Science Park.

From the point of view of the captains of industry, Spain and especially Catalonia, are in a very delicate situation. On the one hand, we are losing competitiveness and the capacity for attracting investment compared with other countries such as in Eastern Europe or Asia as a consequence of the high cost of labour. This has already caused companies, such as Braun and many others, to move away. But on the other hand we do not seem to be able to make a jump to a model of production where we manufacture goods with high added value.

It is obvious that we can't improvise a new economic model in two days. However we must take advantage of the current positive economic outlook, thanks to construction and tourism, and to take a giant leap forward before it is too late. Merck has itself proposed a very useful new idea: an agreement with the state to develop the foundations of an ambitious scientific policy for research and development over the long term.

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