The Tertiary and Primary Sectors of the Spanish Economy
The Growth of the Tertiary Sector
The Infrastructure Sector
This activity consists of providing tertiary services to society. The service sector includes many different activities such as transport, trade, etc. The process of outsourcing gained traction in Spain in the 1970s, though not uniformly across the country. The most significant outsourcing occurred in Catalonia, Madrid, the Balearic Islands, Valencia, and Andalusia.
Transport
Transport is a key factor in the spatial, social, and economic organization of a country. Currently, road transport is the most widespread in Spain. To investigate the use made of roads, we should determine the intensity of use. This indicator shows heavily used roads along the Mediterranean coast, much of the Cantabrian coast, and the central core of the peninsula.
Rail Transport
Rail transport is the second most important land transportation in Spain and, lately, is also being further developed. Over 90% of the rail network is owned and operated by ADIF, with RENFE as the operator. Both public companies were born from the division of the old RENFE. The other companies involved are Feve (narrow-gauge railways) and FGC (Ferrocarriles de la Generalitat de Catalunya). The extent of the Spanish network is much lower than that of most European Union countries if we consider the size of the area.
Maritime Transport
Maritime transport plays an important role in foreign trade, especially over long distances because it is remarkably competitive. Sea freight traffic of all kinds has increased, especially containerized freight. This type of transport has the advantage that products can be landed quickly and easily distributed by rail or road. Another growing sector of maritime transport is passenger cruise ships. Currently, the port of Barcelona is the leading port in Europe and the Mediterranean and one of the top ten worldwide regarding this type of traffic.
Air Transport
Air transport has experienced great development in Spain, especially in terms of passenger volume. This growth is due to the spread of low-cost flights.
The Commercial and Financial Sector
Trade has a very significant importance in the economic system as the link between the productive sector and the consuming public.
Domestic Trade
Domestic trade has developed strongly, especially in the most populated and well-connected areas. This trade has evolved in such a way that small traditional shops have lost importance while large supermarkets and shopping centers have gained ground.
Financial Sector
The Spanish financial sector has undergone a very important transformation in recent decades due to the globalization of the economy and the launch of the euro. This, in turn, has forced merger processes to improve competitiveness. Thus, the number of banks and savings banks has been declining due to both the disappearance of smaller entities and the merging of the largest ones.
Basic Social Services
There are some services that, despite not having high added value in terms of economic productivity, are of paramount importance for the welfare and development of society. These include education and health.
Educational Services
Educational services employ 600,000 people, of which nearly three-quarters work for public schools and the rest in privately owned centers.
The Tourism Sector and its Impact
The tourism sector has been, for half a century, one of the engines of the Spanish economy. Tourism generates many jobs in restaurants, hotels, etc. And thanks to the foreign currency that enters the country, it can pay part of its foreign trade deficit. Today, Spain is the world’s second tourist destination after France.
Foreign Tourism
Inbound or foreign tourism accounts for two-thirds of the volume of tourist movement, while Spanish tourism, also called domestic tourism, represents the other third. Foreign tourists come mainly from the EU. The ratio between domestic and foreign tourism varies greatly among autonomous communities.
Challenges of Tourism
Tourism also has economic and environmental problems. Firstly, there are areas, such as the Canary Islands, which depend almost exclusively on tourism, and this dependency is not healthy. Another problem is the excessive seasonality of tourism. Consequently, there are places that are overcrowded and congested in the summer but almost deserted in the winter, which produces many kinds of imbalances, such as temporary and casual employment for people who work there.
The Primary Sector
The Industrialization of Agriculture and Livestock
The primary sector presents some general characteristics:
- Decrease in cultivated area and increase in dry farming.
- Increased surface area occupied by forests due to the loss of importance of pasture use.
- Increase in agricultural surfaces without exploitation and loss of agricultural land as a consequence of the growth of urban land and infrastructure and services.
- Increase in the economic importance of livestock in the final agricultural production and loss of importance of fisheries and forestry.
- Progressive integration between farming and the food industry.
- Loss of working population and aging.
Agriculture
The Iberian Peninsula is located in the Mediterranean climatic zone of influence and has between 300 and 600mm of rainfall. This means that there is a large area of dry crops, representing 79% of the cultivated surface, and irrigated crops that occupy only 21% of the cropland area. In predominantly dry farming, grains, olive trees, and fruit trees are grown. With respect to irrigated crops, we find herbaceous plants such as sunflowers, but the most important economic value of irrigation occurs in horticultural crops and fruit trees.
Farm Ownership
The vast majority of farms, over 90%, correspond to an individual owner, which indicates that there are still predominantly family farms. Family farms occupy two-thirds of the useful agricultural land, and the rest belongs to agrarian societies or cooperatives.
Livestock
Livestock provides more than a third of the economic value of final agricultural production. The industrialization of livestock continues, with confinement, mechanization of growth processes, and high concentrations of animals having been imposed as the dominant model. The most important livestock sector for production and the economy is pork. The beef sector is the fourth in order of importance within the EU. Poultry farming has achieved significant importance for the production of meat and milk. The chicken sector is basically focused on chicken.
Fishing
Despite its local or regional importance, fishing plays a very prominent role from the economic point of view in the final production of the primary sector.
Forestry
The forest area in Spain is 26.3 million hectares, more than half the territory, of which only 14 million can be considered forest. Forest occupies 29% of the state’s surface. The Basque Country is the region with the most forests, and the Balearic Islands have the least. The main forest products are wood and cork. The primary sector activities provide many of the raw materials of the food industry, and in fact, there is increasing integration and continuity between the farm or fishing industry and the agri-food industry that processes its products.
Economic Impact
The agri-food industry employs 14.3% of the workforce in Spain and is one of the leading sectors in terms of value for the employed population. The distribution of products has a major economic impact on the transport sector since many of these products are distributed to many small businesses. Exports of fruit, vegetables, olive oil, wine, and fish are especially important. The Spanish primary sector, despite employing a low percentage of the population, produces about 13% of the total economic value of the primary sector of the European Union and is one of the most important.