For years, the dominant economic narrative in Spain has associated growth with success: more population, more consumption, more tourism, more real estate activity and more GDP. But this model hides an uncomfortable reality: growth does not always mean prosperity. The big question is why some European regions generate more wealth with fewer people.

The Fènix Report puts data to this contradiction. Catalonia has increased its GDP over the last twenty-five years above the European average, but GDP per capita —the real wealth per inhabitant— has fallen in relative terms compared with Europe. In other words, the economy has become larger, but not necessarily richer for the people who live in it.

While other European economies have committed to productivity, innovation and added value, a large part of the Spanish economic model continues to be based on quantitative growth: more population, more consumption and more volume. The difference is profound, because it ends up determining wages, savings capacity, the quality of public services and, ultimately, the population’s standard of living.

The great mistake: confusing size with prosperity

An economy can grow in two ways. The first consists of increasing productivity: producing more value with more technology, more innovation and more efficiency. This is the model of the advanced industrial economies of northern Europe. The second consists of increasing volume: more population, more workers, more construction and more consumption.

This second model can make GDP grow quickly for a while, but it does not guarantee better wages or greater well-being. And this is where the great European divergence appears. According to the Report, Catalonia has gone from having GDP per capita six points above the European average to standing six points below it. This is a very significant deterioration for one of the main industrial economies of southern Europe.

The paradox is clear: economic activity increases, but many families have the objective feeling that they are living worse. The cost of living rises faster than wages, savings capacity decreases and access to housing has become one of the main concerns of the middle classes.

Bavaria: industry, innovation and high wages

If there is a region that symbolises the European model based on productivity, it is Bavaria. The German industrial engine concentrates technology companies, advanced industry, engineering, automation and applied research. It is no coincidence that it has some of the highest wages in Europe and one of the highest productivity rates on the continent.

The Fènix Report shows that Upper Bavaria is far ahead of Catalonia in productivity per hour worked. The key is not working more hours. The key is generating more value in each hour worked. Germany has built much of its economic model on export industry, technical training, business innovation and institutional stability. This ecosystem allows high wages to be paid without destroying competitiveness. It is exactly the opposite of a model based exclusively on low labour costs.

The Netherlands: a small country with giant productivity

The Netherlands shows that prosperity does not depend so much on the size of an economy as on the quality of its productive model. With a relatively small population and a small territory, it has managed to become one of the most efficient economies in the world. The port of Rotterdam, advanced logistics, technologised agribusiness and a commitment to technology have created a highly competitive model. According to the Fènix Report, the Netherlands stands well above Catalonia in productivity.

And this is not an abstract matter. It translates directly into higher wages, greater savings capacity, higher disposable income and a better financial situation for families. When an economy generates more value, wealth usually tends to be distributed better and offers greater social stability.

The Basque Country: the great anomaly of Spain

The case of the Basque Country is especially revealing because it shares an institutional framework with Catalonia and the rest of Spain. Even so, its economic performance has been very different.

According to the Report, the Basque Country has managed to improve its GDP per capita with demographic growth far lower than Catalonia’s. It has done so by maintaining a strong industrial fabric, a sustained commitment to industrial vocational training, medium-sized exporting companies and an economic structure less dependent on low-productivity sectors. It is not a perfect economy. But it shows that, even within Spain, it is possible to prioritise productivity, industry and added value over simple quantitative growth.

Catalonia: more activity, less relative income

Catalonia remains a powerful, diversified and entrepreneurial economy. But the data indicate a worrying trend: the growth model of recent years has been unable to translate economic expansion into greater individual prosperity.

The Fènix Report identifies two structural problems: productivity below the European average and a growing dependence on low-productivity sectors. This model creates employment, yes, but it is often employment with low wages, high temporary employment, little added value and limited savings capacity.

Meanwhile, housing, taxes and the cost of living continue to rise. The result is a growing feeling of impoverishment among the middle classes: working more no longer guarantees living better.

The future is not growing more, but growing better

Europe has already accepted that competing with low wages is a lost battle. The continent cannot compete with Asia on labour costs, but it can compete on technology, automation, advanced industry, research and human capital.

That is why many of Europe’s strongest economies are committing to reindustrialisation, attracting qualified talent and increasing productivity. Meanwhile, in much of southern Europe, a model based on volume still predominates: more tourism, more construction, more population and more consumption.

It is a model that can generate rapid growth for a while, but that also tends to cause pressure on infrastructure, higher housing costs, stagnant wages and lower social cohesion. The big question is what economic model Catalonia wants for the coming decades. Because the debate is no longer only how much an economy grows, but how it does so and who benefits from that growth. The most prosperous European economies are not necessarily those that accumulate the most population, but those that generate more value per worker.

And this is probably the great lesson of the Fènix Report: without productivity, there is no sustainable prosperity. At the 11Onze Community, we will continue to analyse these economic transformations to understand how they affect savings, wages and the future of families.

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