A STUDY says that Alicante province’s population is now over two million people and its economy is growing at a record rate- but the area lags nationally for wealth per head.
The findings come in the annual report of Alicante province’s Institute of Economic Studies(Ineca).
The non-profit group is made up of local entrepreneurs and public-private entities.
It’s findings were presented to over 100 business people and local authorities at the Alicante provincial council’s Concert Hall on Tuesday,
The study said the province has doubled its GDP in a quarter of a century as well as increasing employment, overnight tourist stays and exports.
Nevertheless its income per head is just 74.4% of the national average, putting it in 45th place out of Spain’s 52 provinces.
Ineca president, Alfredo Milla, said: “We are growing in volume, but we are losing relative prominence.”
“Alicante is advancing, but it is not converging”.
Milla pointed out that Alicante companies are, on average, 25% smaller than the national average, which reduces their productivity and investment capacity.
Buying a first home has become harder and now needs nine years of a person’s average gross salary.
Paco Llopis, who was in charge of the Ineca report, said that adding more resources is not enough to boost GDP.
He pointed to diminishing marginal returns where adding more companies, tourists or population without improving the structure creates bottlenecks in housing, infrastructure and talent which means reduced yields despite increasing effort.
Llopis suggested that a region truly grows when activity and well-being increase without structural costs rising at the same rate, making better use of what it already has instead of accumulating more.
“The decisive factor is not only to have work and capital, but to know how to connect them through innovation, cooperation and knowledge transfer,” he explained.
“The leading territories are not those with the most resources, but those that best know how to combine them,” Llopis summarised.
Ineca recommendations include improved productivity in farming, more sustainable tourism, and better access to housing.
Click here to read more Alicante News from The Olive Press.
