In Spain, the communities of Catalonia and Madrid are leading the way in innovation among small and medium-sized enterprises (SMEs), according to the Ministry of Science and Innovation. Over time, the number of companies recognized as innovative SMEs has grown in the Canary Islands, with an increase of 50 new companies receiving this seal since 2019, representing a growth rate of 294% compared to the national average of 43.91%.
The growth in innovative SMEs in the Canary Islands can be attributed to various factors, including tax incentives offered by the local government. The islands benefit from special tax features as part of the Canary Special Zone (ZEC), a low-tax area approved by the European Commission. Activities involving research and development (R&D) are eligible for a 45% deduction on costs compared to 25% on the mainland, among other reductions available on the official regional portal.
The Innovative SME seal has been awarded by the Ministry of Science and Innovation for over a decade to small and medium-sized enterprises that demonstrate innovative characteristics through patents, reports or official certificates recognizing their capacity for innovation. This seal provides access to financial assistance, social security contribution bonuses for research staff, tax credits for research and development, and public procurement opportunities through innovative public procurement processes.
From 2019 to 2024, a total of 991 companies received this seal in Spain, with an increase of 43.91% over five years. By 2024, there are now officially registered innovative SMEs across all regions in Spain, representing a business innovation coefficient of 2.93 companies per 1,000 active companies. Navarre leads in terms of innovative companies followed by Catalonia, Madrid and Valencia Community while Balearic Islands showed a significant increase in innovation adding more than fifteen innovation awards in 2023 alone.
Trends in Spanish innovation continue to develop with Catalonia remaining at the forefront followed closely by Madrid and Valencia community while Balearic Islands have shown significant growth recently with an addition of fifteen innovation awards.
Overall it is clear that Spain is becoming increasingly important as a hub for innovation within Europe due to its supportive environment for businesses looking to grow through R&D activities.
