SWOT Analysis of Spain: Threatening Brexit and Catalonia

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SWOT analysis is an incredibly useful business analysis and strategic planning tool that can be applied to both businesses and entire countries, such as Spain. Today, we’ll use SWOT analysis to identify the Strengths, Weaknesses, Opportunities, and Threats that are impacting or will impact that nation: Spain.

Spain has been a lagging economy for decades, especially against the backdrop of other European nations like France, Germany, and the UK. While this SWOT analysis is designed primarily as an example for educational purposes, it contains valuable analysis that could truly be used to improve Spain’s economy.


Attractive tourist destination

One of Spain’s biggest strengths is its popularity as a European tourist destination. With rich culture, beautiful beaches, and a warm climate, Spain is an attractive tourist destination for travellers from all corners of the world. While other hot destinations such as Greece and Malta boast equally lovely weather, some say that Spanish cities such as Seville receive the most hours of sunshine of anywhere in Europe. In any case, Spain is the destination of choice for many British tourists, given its close proximity.

Good infrastructure

As with many other European countries, Spain boasts a relatively high-quality infrastructure in terms of transportation, energy, and telecommunications. There are high-speed train systems in parts of the country, well-built roads, good energy coverage, and plenty of cell towers to ensure strong mobile signals across the nation. Naturally, a strong infrastructure can only be a good thing. It results in a high quality of living and opens Spain up to new development.


High levels of debt

Unfortunately, Spain’s economy is one of the weakest in the European union. Notably, the Spanish economy has extremely high levels of debt. This includes both public debt — for which the country itself (on a governmental level) is liable — and private debt — for which Spanish individuals and businesses are liable. This presents a significant hindrance in the country’s development, since very few people are able to invest in moving forward.

High unemployment rate

As a secondary consequence of its poor economy, Spain has high levels of unemployment. These previously peaked at 25%, meaning that one quarter of the working population was unemployed, but is currently closer to 15%. This means that approximately one in six of the working force is unemployed. Compare this to the 4% unemployment rate of the UK or the relatively high 9% unemployment rate of France, and you’ll see just how badly Spain is struggling — they have two to four times greater unemployment.

Low investment in R&D

Perhaps as a consequence of its struggling economy, the Spanish government as well as privately-held companies make little investment into research and development. As such, there is little innovation in the country, and very few sectors in which Spain is truly at the “cutting edge” of the industry. Instead, Spain’s economy has to rely on scaling existing industries.

Read also: PESTLE analysis of Spain


Corruption and tax evasion

Weaknesses can often give way to new opportunities, when they are tackled. Two weaknesses that we didn’t mention previously — Spain’s high levels of corruption and tax evasion — could be opportunities for the country moving forward. Tackling corruption would ensure that government funds are spent on furthering the country’s development, while reducing tax evasion would simply give the government more to spend.

Renewable energy

With long coastlines, strong ocean breezes, and plenty of sunshine, Spain appears to be an ideal candidate for adopting various sources of renewable energy. Large portions of currently unused coastlines could become tidal power stations, while windmills and solar panels could be used across the country for a cheap and sustainable source of energy. While this would be extremely beneficial from an environmental perspective, it would also allow Spain to gradually reduce its dependence on fossil fuels, leaving future generations in a powerful place.


Reduced exports to the UK

With the United Kingdom’s upcoming departure from the European Union — dubbed “Brexit” — Spain could see serious consequences. It’s still very unclear how Brexit will unfold, but if it were to limit the travel of British citizens in the European Union, that could have a serious impact on Spain’s tourism industry and expatriate communities. Also of note: the United Kingdom is Spain’s fifth largest export destination. A change in trade regulations could reduce Spain’s income from these exports.

Catalonia independence struggle

Catalonia is a northeastern province of Spain, which contains the bustling, highly-regarded metropolis that is Barcelona. Generally speaking, Catalonia is a slightly more-developed area in Spain, with its own culture and even language. There has long been political instability surrounding Catalonia, with a portion of the region’s inhabitants constantly calling for independence. If Catalonia were to break away from Spain, it could have serious consequences for the Spanish economy.

Growing social tension

In addition to the divide between Catalonia and the remaining regions of Spain, there is growing social tension in the country for several other reasons. For starters, income equality in the country is continuing to grow — leading to a stark difference in quality of life between the rich and poor — while there are growing numbers of immigrants. Both of these factors are leading to more unrest, disagreement, and conflict. Ultimately, this could have serious economic and political consequences, as well as social ones.

Final Thoughts

As you can see, Spain isn’t in the ideal socioeconomic standing. Despite a strong infrastructure and considerable attractiveness as a tourist destination, Spain’s poor historical economic history has left a lasting scar on the economy of today. With high levels of debt, large numbers of unemployed individuals, and low investment into research and development, Spain is in something of a vicious circle.

Looking to the future, there are serious concerns for Spain’s economy, associated with both Brexit and Catalonia’s calls for independence. Meanwhile, societal unrest is growing in a number of ways. With all that said, Spain still has a chance to capitalize on fixing corruption and tax evasion, and make a powerful entrance to the world of renewables.

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