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Thank you very much for the introduction.
I appreciate very much your being here.
I hope we can go deeper into the matter of where we go,
where we are coming from and what we have to do.
Iíd like to begin by giving a brief outline of the crisis,
it isnít what Iím going to talk about;
Iíd like to give a more productive and broader talk.
However, I think we all know where we are
but in order to see a little about the environment weíre faced with,
I would like to talk a little about trends:
Crisis, or no crisis.
What are the long-term trends that companies have to experience?
What structural problems are there?
Given these long-term trends,
what is the situation of the Spanish economy?
Iíll also talk about the reforms being made
and then Iíll end by talking about technology.
I would like to talk a little about the role of new technology
in the changes in the model of production.
So I will talk about that briefly. As you can see,
we have a very complete agenda, so Iíll make sure I have enough time
for questions and to discuss the topics that most interest you.
The crisis, very briefly.
Spain has had a spectacular convergence.
We have grown more than anybody.
We have grown more than the U.S. in recent years.
We have grown more than the rest of the Eurozone.
This is partly
because we have seen falling interest rates for many years now.
For that, everyone is making and taking
outadjustable-rate mortgages
because the historical experience of Spain has been impressive.
There has been very cheap money, getting cheaper all the time,
getting better every year
due to the convergence of our economic policy
and economic policy in the euro option,
positive shocks,
entry to the European Union, euro adherence, etc.
The problem is that this part of our convergence,
which was due to our integration into global capital markets,
has led to increased leverage.
Here we have the financial institutions;
this is its leverage,
what we see is what proportion of loans
they give for the deposits they receive.
In Spain, they never gave more loans than the deposits they had.
In other words, I have 100 pesetas in the bank
so the bank loaned 60 pesetas.
This could be 60 or 80.
As of 2002, what we see is a very fast increase in leverage.
This 50% is not being financed with deposits like before.
It is being financed with their own funds
or the bank going to foreign capital markets and borrowing money.
When the international capital markets do not want to lend to us,
there are huge financing needs to be met.
This shows a little bit of the model there was a lot of indebtedness.
We can see different countriesí debt levels
classified in order of their level of debt.
It seems they arenít in order,
because we have to add the yellow and the blue.
I have separated this a little for us to see
that the debt on average in Spain is not a problem of public debt,
but a problem of private debt.
Basically, private indebtedness is three times the size of GDP.
When these interest rates go down,
we go into debt in a way that we could not do before
and what many households and businesses etc.
have done has been to go spectacularly into debt.
Only the UK has higher private debt than Spain;
three times its GDP. If we use the GDP to pay off debt,
we would have to go without food for three years.
So this is very high indebtedness
that requires continual access to capital markets.
And it all seizes up!
If the capital markets become afraid,
when the government talks about pensions,
financing stops and money has to be found from somewhere
to refinance the debt and to continue going into debt,
when we are still in a situation of recession
with a negative current account balance.
Where did this money go?
This is a graph from Citibank that shows that loans to developers
were increasing at 40, 45, 50% annually
and that the percentage of debt that was loans to the developers
increased until 20% of the debt was accounted for three hundred billion.
This has been a growth model that has relied on extending loans.
Many of these loans went to the promoters
(not all - many companies here have had access to these loans).
So, what happened?
There was a real estate bubble.
This graph, which everybody knows,
that real estate prices have risen.
But let me make a point I think is very important.
Note how many times a home costs compared to a familyís income,
right? See the house price / income...
The ratio of prices to incomes.
In Spain, the UK and the United States,
this began at three to four times.
I have to work four years to buy a home,
four full years meet the price of the home.
All had a housing bubble and this went up.
The U.S. has less here because the U.S. bubble
is very local, itís in Florida, Miami...
It depends on the area.
Spain was where it rose the most.
What Iím trying to show with this graph is that the fall,
which in the UK has almost led them back to where they began
and in the United States has,
in Spain this is not appreciable.
We still have house prices compared to what people can afford
that are much higher
than at the worst moment in the UK and the USA.
So, the loans went on things that were not very sustainable
and perhaps the conclusion from this graph
is that we have not seen the end of the real estate problem,
and this is a significant weak point of the economy.
But there is a structural problem. All of this is...
How do I view what I have just told you?
There has certainly been a growth model
that has largely not been sustainable.
Moreover, in part, this appears in many things,
which I will discuss later, but in part,
where I think it's most important to see this,
is in the change in employment we have had.
In other countries, to see the same drop in employment we've seen...
This shows falling employment.
To have a similar drop in jobs to what we have seen,
Lithuania has had to destroy 20% of its GDP.
For us, destroying 4% is enough to have 4 million unemployed.
So, the same fall in gross domestic product
destroys more jobs in Spain than anywhere else.
This is a problem I want us to keep in mind
when we think from now on.
Well, Iím going to stop here with this.
Iíll come back to it later, but what I want to do is:
Letís take a look at the context we have to work in,
how to make decisions and how does this fit in
with our model of production?
I'll talk about three things:
the problem of demographics, briefly,
the issue of information technology
and the issue of outsourcing locations.
I think the issue of demographics is well known
so I do not want to dwell on it.
Just look, please, at the yellow lines on these charts,
which are the ones that interest me because they refer to me.
These are the ones when we were born...
These are the ones who were born in the late 60's,
at the height of the baby boom in Spain,
which came later than elsewhere.
There are 1,600,000 of us, more or less,
who were between 0 and 4 years old at that time.
If we look 38 years later,
fortunately there are still many of us left.
But, as we can see, the people that have to pay our pension,
so to speak, are not here.
They havenít been born.
They haven't and when people say, "well, these are not certain,"
These people have not been born and are not going to be born.
Letís see these same people,
and I hope that this projection isnít so uncertain
and that many of us will be alive in 2050,
an inverted pyramid.
What does this mean?
It means that the dependency ratio
and the number of people who will be paying
for the pensions drops from four people
of working age to 1.75 people of working age
for every person over 65 years old.
What does this mean? Well it means...
This isnít working.
It means that we are faced with a demographic situation
that is going to change
and that imporant decisions will have to be taken
as regards the welfare state.
Perhaps a vulnerabilty of our institutional system
is that it is not clear
whether politicians have the incentives
to take these decisions,
but we'll discuss this in a moment, later.
This is a part of the context with aging.
Another part of the context is a global context,
the change in information technology,
which many of us here are involved in.
We spend our time thinking about it.
I just want to talk about two very specific things.
One:
There are two different technologies,
We have information technology and communication technology.
Information technology,
Iím not referring to databases.
The two are closely related,
but we will separate them in our head,
the networks on the one hand
and the ability to process information on the other.
The ability to process information decentralizes;
it gives independence, what do I mean?
I mean there are plenty of data in the cloud
or if I have a magnificent computer
at home with all the databases that exist,
I have decision-making and problem-solving capabilities
equivalent to those of a firm
or to someone who had a lot of bureaucracy many years ago.
That is, each person has a lot more information
and ability to take decisions;
this is the information technology side.
Communication technology is a little different.
Communication technology
enables us
to specialize much more.
Think of a medieval village,
one could not communicate,
so each person had to know how to do everything.
There was no doctor for each thing, but someone who cured everything.
When we start increasing,
when we improve the roads, we can start to specialize.
Well, in the same way, networks allow us
to have an expert in radiology,
in special kinds of breast tumors or whatever in Houston
and you can send X-rays there, so each person
specializes more and each one depends more on the others.
Communication technologies in some way
make us more dependent on others
and information technology makes us more independent and more capable.
There is a competition between the two, in my opinion.
So, the consequences...
This is a big part of my research work
or rather several empirical and theoretical works
as regards these matters.
There are several different consequences.
In information technology, we have autonomous individuals;
their information is very important
because each one has to take decisions.
In communications technology,
we have the economy of the superstars;
in other words,
a very good person might receive...
The radiologist in Houston without communication technology
received an easy X-ray,
a very difficult and complicated X-ray,
but specializes in very complicated ones
and can actually become the one in the market
who solves all these difficult problems.
Likewise, a player for Real Madrid in the 50's, who was very good
did not earn much more than the Real Valladolid players,
because he played in larger stadiums, but that was all
whereas in 2010 the great players
play before an audience of 1.5 billion people
while the Real Valladolid players play for a crowd of 15,000.
So, the difference has become enormous.
Communication technology means that people who are better
than the following ones gain much more
and their human capital is more useful.
But the two technologies do have one common effect,
which is that both increase the return
on investment in education, in both cases the person
who is well educated is much more important,
with respect to the one who isnít, than before.
In the first case, because one has to work
with all this information and must be able to solve problems
in a certain way,
with access to much more data than before
and there wasnít this thing Americans call information overload.
As for the superstars, it is because the radiologist
who used to do one thing and another now sees that all the difficult ones
are sent to Houston and he now works on very routine problems.
In the world where this...
The world in which we are going to work and, I believe,
in which we are going to live, this is a world
where talent is increasingly important
because it is more and more necessary to use this information
and to be capable of benefiting
from the fact that others ask you the difficult questions.
So, technological contexts:
changes in information and communication, aging
and the third I'd like to speak is relocation.
Relocating is a rupture in the production process.
Increasingly, different parts of the value chain
go to different places.
For example, Benetton and Nike do not produce any shirts or shoes.
There is no factory, right?
What they do is this:
they tell a man from Thailand, "we have these designs;
if you make them for us at this price, we'll give them to you."
So, each part of the value chain is in a different place
and what we have is a global value chain
where we can separate
the troubleshooters,
the people who do research and development,
the people who produce, etc., in different countries.
What this means is that if we classify the tasks
that are carried out to produce a shoe or a computer,
from the least to the most labor-intensive,
what we see is that the assembly or production of components
are very low in labor costs.
This is the first thing we can relocate
that is not very human capital intensive.
It is the first thing one can relocate whereas the parts
that are higher in the value chain, are made at home.
And when the cost of relocation falls, we start sending
some of the tasks that are, letís say, less labor intensive,
to foreign countries and we are left with the most intensive tasks.
So, the decrease in unskilled labor
seems to create the disadvantage
that many workers will become unemployed,
but on the other hand we also have an increase in labor demanad
that favors everybody.
This is like a technological breakthrough.
If I have a company that can produce shirts in China,
I will gain in global market share,
I could produce more cheaply,
so that I can hire more people at home to do marketing
and other things that may be important
and that may even lead to an increase in demand for labor.
What is the empirical evidence?
Clearly,...
I think the evidence is quite clear
that productivity growth is increasing,
and the consequences for employment are unclear
but they are not negative.
If we achieve this, itís like any other technology.
There are Luddites that say, ìmachines destroy jobs.î
Come on! They destroy jobs in the immediate short term,
they increase productivity and enable the company
to produce a car which,
rather than just selling ten thousand, we can sell ten billion,
so we are going to be able to hire many more workers, right?
So, the effect on employment is ambiguous.
What is certain is that you have a similar result
on the demand for skilled labor, which needs more talent, right?
Para mi, la...
There is a Harvard economist
who said that what is being proposed is a world of craftspeople.
I think this is a pretty metaphor.
Jobs, we might think of expensive restaurants,
but we can think of any job.
Jobs of the kind "I do this job like that,
I just do it, nothing special,"
are going to die out, because they are routine.
We can do them with information technology,
we can automate them or send them to China.
But on all levels, from gardener to cook,
to hotelier, on any level we can think of,
the artisan who is able to use this technology
that gives him or her power, that decentralizes,
that enables them to do many more things, to lend added value,
their demand is going to rise.
In other words, there is no doubt that this is a world where talent,
creativity and innovation will always find a way,
whether this be for construction workers or any service,
including any manufacturing job.
I think this idea is essential
when thinking about what kind of country weíd like to have
and what country weíre heading toward.
How does this fit in the Spanish economy, these three problems?
I'll look at it briefly.
En...
With the production model to which I referred earlier,
whose growth was largely loan-based,
one of the conflicts this has shown us
is that we have not really had growth in productivity.
Why? Because growth...
If you think about growth in bricks and mortar or coffee,
it is clear that in making these things,
construction or tourism,
it is clear that in making these things,
it is not easy to increase productivity
because in bricks and mortar they use a basic technology:
one brick on top of another.
So we see that since ë95,
almost every year we have had negative growth in productivity.
Productivity is the economyís most significant factor
because there is only one way to increase welfare in the medium term:
for each person to produce more, for us to produce more per person.
If we produce less per person, there is no way to make the pie grow
so that we can raise wages and afford to have a welfare state.
There was a time of growth in productivity,
when we were converging with the U.S., which I've shown here,
but this stopped in ë95, Europe also stopped converging
but it didnít drop; Spain dropped off.
Partly due to construction, but not this alone.
Productivity had been falling in the building industry
but also within each industry.
Mind you,
I think my message here is going to be that there is a dual economy.
Perhaps in this room we have one part of the economy.
Because we have not lost market share;
if we look at this line, we are this dark green line,
blue-green,
Spainís market share has not fallen.
If we look at others, like France and most other countries
in the graph such as Italy, which has fallen a lot,
we see they are losing market share.
Spain has not lost market share.
Then, how is it that we are losing productivity?
On the one hand, we are losing in advanced machinery,
but in traditional industries we are gaining market share.
What is happening? I think we are in a dual economy,
where we have an impressive internationalized industry
with people who are undoubtedly
as well trained as anywhere in the world,
with fairly cheap labor.
A Spanish engineer costs far less than a British or American engineer,
but is just as well trained.
This industry is internationalized and we can compete well,
so it it is not losing market share.
Then we have a very unproductive sector,
the SMEs, which have not made the leap to the next level.
And I think this issue is fundamental to Google,
but also to all the technological and economic issues.
Why isnít productivity rising?
There are two key structural problems.
One is training.
There is training in business and training from the standpoint
of the educational system.
Let's think for a moment about companies.
Companies in Spain do not train, okay?
The difference in training with individuals in jobs
receiving any type of training is far lower outside
or within companies in Spain than in any other country.
Not so with the big ones, which I was referring to,
but in small companies
and for workers who are not in any company.
But I think...
But why is this? Thatís not me, right?
No.
But why is this?
I think it has a lot to do with size.
Look at the following information that seems amazing to me.
What is Spainís productivity compared with the U.S.?
The U.S., an important economy, cutting-edge, etc.
Well, big Spanish companies arenít less productive,
they have the same productivity.
In the industrial sector, they are far more productive.
And the medium-sized companies, and the smaller ones, the same.
The smallest ones are less productive.
But this is not this difference in production we see.
What is happening?
We shouldnít make the sum total, the weight of our economy is here,
and theirs is over here.
We have a hell of a lot of small companies
that are very unproductive,
as in anywhere this is nothing out of the ordinary,
but which do not grow, they remain very small,
do not develop and do not create dynamics.
They canít train workers and cannot export.
Notice the propensity for exporting,
which I think is an equally surprising fact,
but once one sees it, one understand perfectly.
What is the propensity for export according to size?
Large companies in Spain...
I'm sorry.
Large companies in Spain have 87-88% propensity for export.
Compared with France, is that worse? Compared with Germany?
No; itís better.
How much do small Spanish firms export?
Well, not too bad either.
51% compared to France.
Whatís happening?
In Spain not all the companies are like that. There are very few.
So, it is the composition.
The companies are not worse because of their size,
they are the same, the problem is
that there is a very high concentration
of this size of companies, which for many reasons
that we can discuss do not grow.
What reasons are there?
For me, one thing that I find very important
is the institutional structure.
There are cultural reasons that we can discuss,
there are reasons of many kinds,
but I think one reason is that there is a maze of legislation.
In Spain it is very difficult to do business.
Creating value is not appreciated
and we find that after years and years
of talking about structural reforms and such,
our ranking in all institutional matters
on how property is protected,
how efficient the legal framework is,
this is the report from Davos
in which we have unfortunately fallen by quite a lot,
how transparent the economic policy is, how much waste there is, etc.
We are below some economies
in the list that it makes you want to cry.
Three days ago,
the World Bank's Doing Business was saying the same thing.
The World Bank measures the number of procedures
and compares them.
And when you see the number of procedures
Spain is stuck at around fiftieth. Colombia, Peru, whatever...
it really seems we should be ahead of some countries on all levels,
but they are way ahead.
I think this is a reason for these sizes
and I think it is a matter to be put on the table
and addressed as a fundamental issue.
Then thereís the structural issue.
The first issue was productivity and this is related to training,
and this has to do with the distribution
and size of Spanish companies.
The second point that I find very important:
the Spanish labor market does not work.
I put together this data last year.
The day I put it on the blog, the Wall Street Journal called me.
They wanted to put it in the newspaper
because they were astonished.
This is the change in Gross Domestic Product from employment
and from real salaries in Spain.
The fall in GDP is quite large,
especially in the second quarter of last year.
Thatís normal.
And if we look at the UK, itís similar.
In the UK, the Gross Domestic Product fell a little more.
This is the United Kingdom,
in their worst quarter they lost 5%.
Now look at what happens to salaries.
Demand for labor is falling like never before in history.
The highest real wage gains over the past fifteen years occurred
in the third quarter of 2009.
We're talking about crises,
that Spain was falling off a cliff...
So what is happening? If demand is falling and the price is rising,
what will happen to the level of employment?
Well, nobody is going to hire anyone.
Itís even more expensive at this time
of a huge drop in employment.
What happened in the UK?
Well, since 2008,
wages fell every year except for two quarters.
Zero is here, okay? So this is decrease, decrease,
decrease, decrease.
All these quarters, apart from two, when they went up.
Whatís happening? Well, the GDP fell a lot, but employment did not fall.
ìBut in the UK they have not had a bubble or financial sector.î
They do, the British economy is a purely financial sector,
where they took the brunt of it.
Well, if wages donít rise, there is no adjustment, right?
Can you please keep it down?
Itís putting me off.
Why?
Because there is a crazy collective bargaining structure.
We have some collective agreements that are inexplicable.
54% of collective agreements are sectoral or provincial;
we have this bureaucracy,
we have some guys deciding how much they are going to raise wages.
What do they know?
I mean, what makes you think that you will know
what this companyís labor demands are going to be next year,
Maybe Google has sold an Internet service that will raise their demand
or not or maybe it will have big problems
and need to negotiate wages,
contracts with the employees etc.
So I believe that this structure,
which requires collective bargaining with a person from the province
sitting with an employer, bureaucracy,
to decide how much to raise wages,
seems to me like the Soviet Union really and I can prove it.
It really is like that.
It is, because we shouldnít have a situation
that is creating these price changes.
In a normal market, if people do not demand oranges,
orange prices fall.
I mean, you donít need to study economics much, right?
Okay.
So the problem with the labor market is:
collective bargaining, which is not difficult to solve;
all that is needed is political willpower,
but honestly the unions haven't got the slightest interest,
because a lot of people make a living out of this.
There is a huge bureaucracy of tens of thousands of people
making a living out of the check they sign a collective agreement.
So, this has scared me a lot,
because we have worked a lot to change this
and the truth is it is not being very productive, really.
Well, the second problem with the Spanish labor market
is its temporary nature.
Young people signing these contracts are in rotatition
and donít become integrated into the labor market.
They told us when we were drewing up a document in the CDA
trying to help to improve labor reform,
and we spent a year working, we had meetings with many people,
and one argument from these unions was:
"Hey, no; the thing is that in the Spanish social model,
dad has a steady job and cares for the children,
who even when they have jobs live at home."
Well, okay, this means there will be a replacement
and that children will become parents, they will not stay
at their parentsí home forever.
I mean. Well, look.
People entering the labor market at the moment,
this is a cohort,
they start finding permanent job contracts,
then this same cohort, when these people are 45 years old,
40% of them are still on a temporary contract.
These are not being trained, they are rotating.
And I have seen resumes like these:
six months in a pizza restaurant, six months unemployed,
in a hotel, laying bricks.
Of course, this doesnít help training.
So, on to the dual labor market,
no access to the market for young people...
It may seem a very pessimistic view, but it is not.
this is very simple to change.
This can be changed by passing an executive order.
We get rid of the muddle of contracts
and make one single contract, with increasing compensation payments,
where when one enters the labor market they can be laid off easily,
but little by little they gain...
Seniority.
When they gain seniority
it becomes more and more permanent.
Education.
So, in this globalized context
it is essential to be flexible,
to have human capital,
to have education in order to adapt.
Out of all the problems I mention, this is the only trully worrying one
because it's really hard to solve.
The other one is a question of political will.
This is the rate of leaving school early, between 18 and 24 years,
the rate of early dropouts in Spain,
meaning the youths who have not completed high school education,
is at 32%. Who is worse than us? Turkey and Malta.
This must be improving, right? Because obviously,
this is no problem for a country like ours;
I believe that this dual country,
I am describings a very advanced country,
Is it getting better?
Well, no.
If you look at 1995,
the proportion of youths in this same age group
who were not in training and had not completed their studies,
had not completed high school nor were they being trained,
this is constant, while in Turkey, Portugal...
It is improving.
The school dropout problem is one that we have been
talking about since I studied in my first economics class
and it seems it hasnít improved, right?
Much has been said of this NiNi generation,
which is one thing that I think is truly a huge waste
of this countryís resources.
And...
Thank you very much.
A huge waste of this country's resources
and note that there are two things here:
the demographic problem, these bars are becoming increasingly smaller,
but it there are these 750,000 youths today,
these 750,000 youths who neither study nor work;
I do not know what they do,
but they are not in training and they are not working.
This is a resource,
it is like having a giant oil well in the country that is closed
and we're not doing anything with it.
This is terrible because they are not finding work activity
or being trained.
So I think education is a problem,
also the labor market.
In this economy, in terms of information
and globalization, it is necessary to innovate and create.
Economic growth will come from innovation and creation.
And innovation comes largely from universities.
In the USA there is Silicon Valley and Massachusetts.
We all know the history.
In the UK thereís Cambridge
and the Germans placing much emphasis on universities.
Look at the ranking of Shanghai.
It is the best one because it is created with data
instead of opinions,
what we see is that Massachusetts,
well, what places have a lot of good universities per population?
Well, see Sweden and Switzerland, which do not have private systems;
it is simply that they are systems in which people are responsible
and receive the benefits of their work, etc.
They have very good university systems.
The UK and Germany come behind
and Spain has no university within the top 100.
When we look at the top 200 there are a few; one, I think.
In the top 500, some more, but really if Spain
has Real Madrid and BarÁa, and it also has the IESE,
the Instituto de Empresa, I mean,
itís not as if we donít know how to teach.
There is a segment where thereís a market
and where people can compete,
and we have one of the top five business schools in the world.
So, it can be done, there is no doubt about it.
What we cannot keep thinking is that we should let bureaucrats
teach us who have no incentive to improve
and research and create and so on,
and that suddenly this works and produces different results.
So, letís say these are the priorities:
for productivity education, training...
for the labor market: regulation, bargaining;
and for the education system, the issue of productive training
and quality. And I'd like to talk about these, but I can't
If you ask me today, Iíll be very grateful.
There have been some reforms.
There is a labor reform
whose preamble I think we have written ourselves,
I mean this group and the FEDEA economists,
because the preamble is fine,
but of course then...
What matters is not the preamble
but the measures and they are partial.
Some reform in real estate,
tax consolidation, the financial system,
the saving banks law has been passed that may actually begin to solve
problems but they haven't.
And if the problem is not solved, soon we will again find ourselves
in a very complicated situation.
I'd like to spend the final three minutes by asking,
and to all of this production model,
what does high technology give to this subject?
Three things:
one is the importance of networks and communication management.
One of the most important things is that there is a huge change
in the cost of managing communications
and that we must take advantage of this.
The second is the issue of training, coming back to this,
from the point of view of I.T.
And the third one is to talk about computing on the cloud.
I tried to translate this but nobody has helped me.
So, itís called "nube",
but obviously weíre referring to a computing cloud
The first matter: next generation networks.
The access to next-generation networks
and fast levels of communication
will be crucial
to the technological advances we have discussed.
But the price in Spain is very high,
the price of Internet access is very high
and the resulting penetration
is lower than the European Union average.
It is very important for next generation networks
to take that leap.
The problem is that the ex-monopoly company,
TelefÛnica,
has a very high market share and one never really wants
to cannibalize investments.
If you have a monopoly, what every monopoly wants, letís say,
is to squeeze everything out of it and move on to the next one.
So, TelefÛnica has no incentives to take the next step
and maybe we should try to find a way
for these networks to make this investment.
There are investments.
This is a map that we are drawing up in FEDEA
in an observatory on next generation networks,
but these are all little things,
perhaps with the exception of investments being made by Ono
which has four million, maybe more,
maybe seven million with access in homes.
But really, still,
there are not enough next generation networks.
This is an investment that must be made.
In Catalonia, there is a little public investment
no accent, sorry.
But, well, blaming the current budgetary situation
is not the solution.
In the U.S., Google announced plans to lay down a fiber optic network
in some communities and will subsidize this
to see how this will change things.
Once these investments are made, then all the business modules,
everything will change.
So they say:
ìwell, let's try investing in a specific town,
a certain city and see how things change.î
Thereís a lot of room here for us to think of a policy
that enables these communications to exist.
Second: training.
Well, in Spain, the percentage of employees
using computers in their jobs is low,
both in non-manual and manual work.
There are only a few less advanced countries there.
Why is this important?
Because in a society with so much unemployment
we have a lot of demand for labor.
If you want to lay bricks,
you are going to be unemployed another ten years,
but if you are able to do things like, for example,
we were saying to people from Google:
"hey, a small businessperson that wants help from an agency
to appear on the Internet canít find these agencies.
Thereís not enough capacity to help them.î
There is a lot of work here and there has to be investment
in training that assumes the employees have been trained
in using I.T., so, I think this is a fundamental aspect of technology.
And the third key aspect I wanted to mention
very briefly is the cloud.
We are moving from a model
of computers with Internet access,
from access to decentralized information,
in which each person has all the computing power
in their office, to one in which there are
huge data processing centers,
located wherever.
I mean, I donít know if the people from Google could answer this now,
but I use G-Mail and I do not know where my messages are.
I mean, I access them from Singapore,
from Spain or from London or from wherever,
but I do not know where that message physically is.
I think that they will be copied in several places,
but maybe there is a copy in Arizona,
one in Scotland and another in Saudi Arabia. I do not know.
So, this is the trend that we are seeing,
there is going to be ubiquitous information,
but all of us will be able to access the cloud through our watch
or through our cell phone, right?
And many know far more about this, but what I would like to say is
that this will lead to a concentration.
Huge economies of scale, because the same computer
that carried out the functions of a store during the day,
at night, it may be carrying out functions in Japan.
If you are in the cloud you can use I.T. much more.
We each use 1% of our computersí processing power,
we have advanced technology that we hardly use.
So the economies of scale are huge and will be concentrated
a lot in specific centers, perhaps there will be 200 centers;
think that maybe 200 centers will account for 99%
of the transactions made in the world,
so you can see what I mean, what those 200 centers mean.
In Spain there is no investment project in the cloud.
We are saying that HP has several, Google has a great many,
Amazon has a great many, but in Scotland...
This is a huge business opportunity. Why?
Because every country will want to have its own.
Each country will not want to depend,
Spain on the French cloud, because they will say,
ì some things are private and we do not want to share."
there will be regulations that do not exist now,
that will force us to have a certain decentralization.
There is a business opportunity, that goes beyond the idea
that we serve in Spain.
Spain has sunshine,
which gives solar energy that will be very cheap.
what is the greatest cost of these investments?
The energy costs, but also the networks
and legislation.
It will be very difficult to compete in the cloud
if we donít have cheap energy,
new generation networks that work
and which are cheap to access and modern legislation,
because todayís legislation now is intended for privacy
as if we were talking about documents
carried in your hand, when we are now used to...
my document is in the cloud and I donít know where, either...
Someone from Microsoft told me a very good analogy,
I do not know where my money is either.
I take the money to the bank, give them 100,000 euros,
they put it in one place there, I mean, there's no piggy bank
where I can see my money, but we are all accustomed
to the document being on my hard drive.
Now it is going to be somewhere else, it's ok.
We have to adapt this legislation.
That's all I have to say.
I think all of this is a world in itself.
I just want to end on a positive note, which is the following:
there are a lot of opportunities;
A world in which India is coming into play, China,
where there are huge costreductions, this cannot be bad news.
Why canít it be bad news?
Because thereís the largest poverty reduction in history,
potential customers everywhere, who will want to travel to Spain
to go sightseeing, buy things, etc.
Information technology is creating huge new opportunities.
So, these are all positive developments,
perhaps the anxiety we are feeling doesnít need to be so great.
Spain has not got its act together, but Spanish firms have.
They have internationalized pools who speak languages,
who have traveled...
But not the Spanish institutions.
Political institutions.
We are not getting our act togeher,
because we live in Neverland,
where the problems sort themselves out,
productivity and education sorts themselves out.
And I believe that the opportunities exist, and if civil society,
letís say puts pressure, then we can exploit these.
Thank you very much.