The Balearic Islands are trying to turn around a slump
Credit: EWN
The Balearic Islands are facing a slump in productivity that is threatening their economic well-being.
This warning comes from Antoni Costa, the Vice President and Economic Minister of the Balearic government.
Costa identifies productivity as the key variable behind the declining GDP per capita, a crucial metric reflecting resident welfare. The islands economy, heavily reliant on tourism, has grown in volume – more tourists are visiting – but this growth hasn t translated into higher quality or value. It s a classic case of quantity over quality.
The solution
Costa s solution is a two-pronged attack: training and specialisation for the workforce, and a major push for technological innovation across all sectors. He points to the success of the hotel industry, which has significantly increased the value it offers.
There are some bright spots. In the first quarter of 2024 the service sector boomed alongside tourist arrivals, and construction is showing signs of recovery despite ongoing industry tensions. However, industry has taken a significant hit that authorities hope is temporary. Agriculture and fishing remain steady.
A focus on the service sector
The path forward is clear: focus on the service sector, the engine of the Balearic economy. By investing in training and technological advancements, the islands can create a more specialised and efficient workforce, ultimately offering experiences that command premium prices. This, in turn, will increase productivity and translate economic growth into tangible improvements in the lives of Balearic residents.
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