Manuel Sánchez Ortega’s speech, Innova Spain Forum

Innovation and Sustainable Development
New Economy Forum
Innova Spain Forum
Madrid, April 17^th, 2013

Manuel Sánchez Ortega’s speech,
Chief Executive Officer of Abengoa

Esteemed Ambassador Mr. Alan Solomont,
Esteemed President of New Economy Forum Mr. José Luis Rodríguez,
Ladies and gentlemen,
Good morning and I thank you all for attending.

If you will allow me, to reciprocate the courtesy of the ambassador of the United States in speaking to us in Spanish, I will say a few words in English.

First of all, I would like to express in the name of Abengoa our warmest condolences to the families of those that were killed at the Boston bomb attacks on April 15^th, express also our wishes for the recovery of those that were wounded, and express our support to the nation of the United States against these acts of terror.

I would like now to sincerely express my deep gratitude to Ambassador Solomont for agreeing to introduce me today. I am fully aware that, independently of the mutual affection we share, the real reason that the ambassador is here today is the long, honest and successful track record of Abengoa in the United States. A history that has been characterized by the seamless commitment to values that we share: passion for innovation, admiration for entrepreneurial spirit and respect of commitments. Thank you again, Ambassador.

I, of course, also wish to thank the sponsors of Innova Spain Forum, namely El Corte Inglés and the Ramón Areces Foundation. And I do so as part of the fondness I have for El Corte Inglés in being the first company where I worked over the summer between the second and third years of pursuing my university degree. I spent two months, July and August, selling goose down comforters. I had hoped they would put me to work selling bathing suits, or towels, or sporting goods, but no; comforters in the middle of August. As you can imagine, my heart sank, and I saw my dream of saving a few pesetas to cover my expenses as a student vanish. Well, the fact is that nothing could have been further from the truth. I discovered that there are a lot of people who get ready for the winter ahead of time, taking advantage of summer sales, and I managed to top the entire department’s sales list. That proved an unforgettable lesson in learning that opportunities sometimes come disguised in ways we least expect; in this case, wrapped in feathers.

Today I have come to speak to you here at the Innova Spain Forum bearing a message: Spain is not innovating enough.

But I would also like to deliver a message of optimism: Change is possible.

And I shall illustrate the latter in two ways. On the one hand, by referring to what is happening in other countries, especially in the United States, and, on the other, by sharing with you what more and more people find to be one of the most incredible business transformation processes of an organization through innovation: Abengoa.

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The idea is simple.

If we want Spain to be able to enjoy the level of development that is characteristic of the most advanced nations, and for this development to be sustainable in every sense of the word, the only way to do so is through knowledge and innovation. Innovation is the only possible path we can take towards achieving the sustainable productivity and competitiveness needed to have conditions for resilient prosperity to ensure the well-being of our nation in the medium and long term.

In short, innovation for sustainable development.

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And what is sustainable development?

I understand sustainable development to be development that is characterized by three fundamental aspects.

1. First of all, it is the kind of development that can be sustained over time in a stable manner, without any major alterations, alterations that are usually linked to a lack of strategy or to different types of speculation.
2. Secondly, sustainable development implies environmental conditions and the use of natural resources in such a way that they may be enjoyed and augmented by future generations.
3. And, finally, it is the kind of development in which all citizens have the opportunity to take part.

These three dimensions–economic, environmental and social–are essential to steady progress in a modern society. We could say with absolute certainty that this has been true at any point in history, and we can undoubtedly also say that this is increasingly more certain with each passing day.

We are on the verge of an estimated world population of 9 billion people. We will reach this figure by 2050, and this incessant population growth of our planet poses significant challenges and requires taking action that I would say cannot be put off.

One of such measures, and among the most important, is that we need a new energy model that is sustainable along the three aforementioned dimensions. The world needs energy, and it is always going to need it, and addressing the energy model we need is therefore a matter of the utmost importance. And this energy model can only be based on renewable energy sources because our current fossil fuel-based model has been worn out as a model due to the inherent limited nature of our resources. This is evident, this is a fact, the days of fossil sources are numbered and with each day that goes by we are getting closer to their end. Some will be more pleased by this and others less so, but nothing is going to change the point at which fossil resources run out. A song by Joan Manuel Serrat from 30 years ago, perhaps some of you may remember it, goes like this: “the truth is never sad, but it has no remedy”. Well, indeed, this is what is happening with the depletion of fossil energy sources; it has no remedy.

But furthermore, in addition to fossil-based energy sources being limited over time, they are causing climate change that we cannot afford from any standpoint. Not from an environmental perspective, not from a social perspective and not from an economic perspective. In this regard, it is fitting for us to recall the statement issued by prestigious economist Sir Nicholas Stern in January during an interview at the World Economic Forum held in Davos: “Looking back, I underestimated the risks. The planet and the atmosphere seem to be absorbing less carbon that we expected, and emissions are rising pretty strongly. Some of the effects are coming through more quickly than we thought then.”

Published in 2006, the Stern Review pointed to a 75% chance that global temperatures would rise by between 2 and 3 degrees above the long-term average; however, the author of the report, with further data and evidence, now believes, 7 years later, that we are headed towards an increase of between 4 and 5 degrees.

The new president of the World Bank, Jim Yong Kim, in turn pointed out at the gathering in Davos that a 4-degree rise in the earth’s average temperature will result in water and food fights everywhere.

In order to prevent this from occurring, Kim stated that forceful action was needed to create a CO₂ emission rights market, immediately eliminate fossil-fuel subsidies, and “green” the world’s 100 megacities, which are responsible for 60 to 70% of global emissions.

As far as the issue of subsidies for fossil-based energy sources is concerned, worth remembering is the report by the International Monetary Fund, issued in April of this year, which points out that “direct and indirect fossil fuel subsidies provided by both rich and poor countries to keep their citizens happy are holding back the world economy, accelerating climate change and damaging the health of current and future generations”. The report also adds that these subsidies “encourage people to use excessive amounts of energy, lowers incentives for investment in renewable energy and accelerates the depletion of natural resources.” To the cost of these subsidies, which run into trillions of U.S. dollars worldwide, we must add the cost of the damage to the planet caused by climate change, the cost of diseases resulting from pollution and the environmental costs of relatively frequent accidents.

This should leave no room for doubt that the new energy model must be built upon the essential underpinnings of massive use of renewable energy and rational use of natural resources, for their limited nature compels us to place an emphasis on efficiency, reutilization and waste treatment.

Having said that, a sustainable model for economic development which takes into account these needs can only be achieved through knowledge and innovation, which constitute the primary mechanism for generating value and growth in modern societies. As stated by Robert Solow, awarded the 1987 Nobel Prize in Economic Sciences, the highest percentage of long-term growth comes from innovation, quantifying this percentage at 80%.

And what do I mean by innovation?

I am talking about innovation in the broadest sense of the term; that is, “knowledge-based changes that generate value”. This, then, involves developing technology, developing new processes and pursuing new ways to solve old problems. Changes that are centered not only on scientific and technological know-how, but also on the arts, humanities and social and economic sciences; knowledge acquired inside and outside companies through research, technological development and creativity of all kinds. Changes that generate value that is recognized by the market and which can be anticipated by the driver; and changes that take place in an environment aimed at genuine prosperity in lieu of speculation.

From a business standpoint, innovation entails risks that must be controlled through assessment and ongoing monitoring; however, the greatest risk of all is to take no risk whatsoever. Innovation must be consciously adopted as an option, through strategy and planning, and should be a part of business culture. Innovation requires people, processes and tools for managing it; and it should be recognized and gauged in product and service enhancement and in capitalizing on results.

Above all other types, I shall refer mainly to technological innovation, the kind of innovation that hinges upon generating knowledge through research, transformation of this knowledge into technology, and which evolves into competitiveness, sustainable development and medium- to long-term growth. This planned chain of research, technological development, innovation and competitiveness is what sets the most developed nations apart and makes them strong.

This chain requires:

• brave entrepreneurs who know how to identify innovation as a source of growth and are willing to take on the risk of seeing it through;
• universities and research centers that understand creation and transfer of knowledge as a need which is embraced in their inherent duty to society,
• and governments that plan and make laws predictably in order to create a solid framework which is conducive to the virtuous cycle of education, investment and innovation.

Please allow me to make use of a historical perspective to explain some of these things.

The greatest source of knowledge in our society has historically been the university, and still is today. In Spain, we have not been and probably are still not fully aware of the importance of the role universities and research facilities play for development in today’s world. Their role has gradually evolved from being purely learning-centered medieval institutions to what they represent today in the most technologically advanced societies.

At the beginning of the 19^th century, the first research university in history was founded in Berlin. This model was transferred to the United States when the Johns Hopkins University opened in 1876 as the nation’s first research university.

During World War II and over the decades that followed, the United States established itself as the world’s first great power, largely as the result of a system of universities and research centers where the knowledge is produced to drive the nation’s technological, industrial and economic power.

In order for the system to have produced all of its major results, a fundamental occurrence had to have taken place beyond the transformation of a number of universities into research institutions.

American universities and research centers are part of a triangle of alliances upon whose two other vertices are found the national interests of the United States, and the country’s business organizations:

• Firstly, national interests are clearly reflected in scientific and industrial policy that is planned steadily and upheld over time by politicians of any affiliation.
• In turn, businesses, within a stable environment, are willing to undertake the risks involved in the development and commercialization of new products by making use of scientific and technological know-how.

Here we might ask ourselves, “Where does this entrepreneurial spirit shared by universities, the business community and administration come from in the United States?” I have no doubt that there may be a variety of factors that might explain this, but without a doubt there is a key factor without which it would be impossible for this convergence to naturally occur. The factor I am referring to is the educational model from the first year of schooling, an educational model which, applied over decades with no changes of course, makes it possible for generations of men and women who will carry out their professional activity in (i) industry, (ii) at universities and research centers or (iii) in politics, to have a mindset that prepares them to pursue, prioritize and reward innovation wherever it may come from.

Elementary education plays an essential role in providing the basis for everything that happens afterwards.

• Education aimed at developing innovative entrepreneurial spirit, for which it is essential to separate the concepts of error and failure at the core.
• Education which embraces the need to try to do things, working on the assumption that mistakes are inevitable and provide a great source for learning.

And mistakes are not failures. Making mistakes is the precursor to going back and trying again, correcting the mistakes we have encountered. The innovative entrepreneurial spirit of American universities, businesses and administration does not come from out of nowhere; it is sown from the first year of primary education and gives rise to one generation after another of curious and challenging minds that understand that failure exists only when no effort is made to try to do things. And these minds are generous in acknowledging success.

In Spain, the educational model turns mistakes into failures, and this destroys initiative and snuffs out spontaneity and newness, which ultimately leads to mental inflexibility out of a fear of failure. It is a system based on memory and knowledge. It is not based on skills. It is not based on learning by doing. It centers on passive training of students. What is the result of this? Please allow me to share a terrifying piece of data with you related to our educational model: in Spain, 28.4% of young adults between the ages of 18 and 24 have not completed secondary education. In Germany, this figure is 11.9%.

If we do not prepare our children from infancy to:

• develop an entrepreneurial spirit,
• develop the curiosity for innovation,
• feel the irresistible need to question everything,
• approach mistakes as an incentive to try again harder instead of being the sword of Damocles which hangs over their heads,
• or for them to have the ambition to want to make everything better, aware that the only real limit is to not make the attempt.

We simply will be powerless to change the model.

The American model has been recognized and applied for decades, to such an extent that back in 1961 President Eisenhower stated in his farewell address to the nation: “the solitary inventor has been overshadowed by task forces of scientists in laboratories and testing fields; the free university has experienced a revolution in the conduct of research; and the government contract becomes virtually a substitute for intellectual curiosity”.

The partnership among government, industry and universities, which in the era to which Eisenhower alluded was applied fundamentally to the defense industry, later gave rise to solid development in fields that include agriculture, microelectronics, medicine, computer science and telecommunications in their numerous branches that exist today.

The developments achieved this way, not only in the United States, have enabled an overall transformation towards the so-called knowledge society, a society in which science, research, technological development and innovation are the main tools for sustainable development.

Fifty-two years after this declaration by President Eisenhower, incidentally a member of the Republican Party, President Obama, a Democrat, said some very interesting things on April 2^nd, some of which I shall read to you in the next three quotes:

1. “Today I’ve invited some of the smartest people in the country to talk about the challenge that I issued in my State of the Union address: to grow our economy, to create new jobs, to reignite a rising, thriving middle class by investing in one of our core strengths, and that’s American innovation”.
2. He also stated that “ideas are what power our economy. It’s what sets us apart. It’s what America has been all about. We have been a nation of dreamers and risk-takers; people who see what nobody else sees sooner than anyone else sees it. We do innovation better than anybody else, and that makes our economy stronger. When we invest in the best ideas before anybody else does, our businesses and our workers can make the best products and deliver the best services before anybody else”.
3. And the president concluded by emphasizing that “I don’t want our children or grandchildren to look back on this day and wish we had done more to keep America at the cutting edge. I want them to look back and be proud that we took some risks, that we seized this opportunity. That’s what the American story is about. That’s who we are”.

At this point it might be a good idea to stop for a few moments and reflect on something that is both elementary and essential. Innovation requires investment with a long-term mentality, it requires taking technological risks and, without any investment, there is simply no innovation. As Serrat said, “the truth is never sad, but it has no remedy”.

One difference between nations with successful and unsuccessful innovation models is the role of private financing with respect to public investment. Thus, according to Main Science and Technology Indicators, whereas in countries like Japan, Korea or the United States the public funding burden of investment in R&D totals, respectively, 24, 28 and 37%, in Spain this figure is 61% versus just 39% from the private sector. Curiously, Germany’s percentages are exactly the opposite, that is, 39% public and 61% private.

However, then, if the main role of public administration is not to provide funding, what is it? Well, in addition to maintaining an education model which does not change every four years, its role is that of establishing a predictable framework in which private investment is willing to take on the risks and time limits inherently linked to innovation.

Seed capital, risk capital, private capital, businesses, capital markets are willing to undertake the technological and industrial risks associated with innovation, knowing that there will be mistakes, not failures, but which in the medium term always generates value. Private investors require clear rules of the game under the protection of which they may assume the technological risk of investing their money, that of their families or that of those who have saved away and bestowed their trust in them. What investors are unwilling to assume is neither the risk of the playing rules changing in the middle of the game, nor legal insecurity.

And no matter how much one might insist that investors should assume the risk associated with legal insecurity, what is certain is that this type of capital is not the kind that is interested in sustainable development, social welfare or progress. The type of capital that is willing to invest in environments where legal security is a concept that is malleable to blows from decree-laws is short-term speculative capital, capital which undoubtedly will demand a premium for taking on this risk. Entrepreneurial capital, long-term capital, the kind that is needed to create a stable environment where innovation may flourish is incompatible with legal arbitrariety. The question that must be asked of someone who insists on encouraging investors to invest in countries with no legal security is the following:

“Would you invest your own money, your family’s money or the money of the investors in your company that have entrusted their savings to you, in a country without legal security?”

In short, innovation requires investment, and investment requires clear rules. Trustworthy countries that do not toy with legal security attract investment that leads to innovation, progress and well-being. Nations that believe that legal security and upholding anticipated commitments is a matter of shades of meaning scare away investment and thereby kill innovation. I shall refrain from once again citing Serrat.

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Within this context, what is Spain’s situation in relation to R&D and innovation?

According to data from the Cotec Report 2012, Technology and Innovation in Spain, and the INE 2011 Statistics on R&D Activities publication, R&D investment in Spain multiplied by 2.5 between 2000 and 2008, to reach a total of 1.39% of GDP. This progression came to a standstill and there has been a slight retrogression in the last three years. Average investment in R&D in the European Union today stands at 2.4% of GDP; in Germany the figure is 2.8%, in Finland and Sweden, 3.5%, in Japan, 3.4% and in the United States, 2.5%

The economic crisis has revealed the greatest weaknesses of certain countries and regions in comparison to others. One of the main differentiating characteristics is that the most vulnerable economies are those in which the burden of the industrial sector, in the broad, modern sense of the term, in which innovation and technology play a key role, is lower. Sufficient evidence can be found by comparing Germany with Spain, or even different regions within Spain. According to the National Institute of Statistics, the unemployment rate in Andalusia totaled 37.8% in 2012, in contrast to the figure of 15.9% in the Basque Country, in other words, under half. On the other hand, the weight of industry in the overall Andalusian economy totaled just 11.3% with respect to 27.2% in the Basque Country, that is, more than double.

The only way out that is sustainable in the long term is the development of a modern industry based on knowledge, innovation and technology. This will make us more competitive in a way that is sustainable. We need to take R&D+i most seriously, not as a way to get out of the current crisis, for the effects of these policies take years to bring about change, but rather so that it may be a constant in our economic model as the key factor for growth upon which to lay the foundations for an economy that is less vulnerable to new economic crises.

Improving competitiveness solely on the basis of impoverishment, if this were the case of a successful course, will be so only in the short term because, believe me, countries with lower costs will always appear. Our aspiration in terms of a forward-looking plan cannot be centered on our always being the country with the cheapest workforce. On April 8^th, the New York Times published news to the effect that an increasing number of companies are considering opening new plants in Cambodia instead of China because

the cost of a worker at a manufacturing plant there is merely a third of the cost of a person in China.

How can we approach this path in Spain?

According to the internationally acclaimed model of Professor Hausmann, Director of the Center for International Development at Harvard University, a nation’s industry growth can only be achieved by developing its own capabilities, fundamentally through R&D, technology and knowledge, and based on products that are close to those of which prior knowledge is possessed. This involves working from existing sectors, fortifying them, making them competitive and making them grow out towards new products on the basis of the development of knowledge and technology. In general, it means avoiding leaps to sectors that require capabilities that differ greatly from those one has, because this usually leads to failure.

Spain has a variety of sectors that fulfill the requirements for building prosperous and sustainable industrial development upon them. To cite a few examples, these include the food and agriculture, railway, aerospace, automobile, textile design and renewable energy sectors. From among these, I shall refer to the renewable energy sector, apart from being the industry I am most familiar with, because of its capacity for growth, in revitalizing investments in innovation and because it represents a genuine opportunity for placing Spain in a position of world leadership.

It is universally recognized that the world will evolve in the coming decades towards a renewable energy model. In the circle that is closest to us, we need only to check the Energy Roadmap 2050 that was recently approved by the European Commission of the European Union. With major global growth thus being predictable in this sector of economic and strategic importance of the highest order, Spain enjoys the fortunate circumstances of having companies that are leaders in their respective technologies; particularly in the case of wind power and solar thermal technologies.

Spain is today the global leader and Spanish companies are ranked at the top in developing and building wind and solar thermal power plants in this important emerging market.

For the first time in history, Spanish companies are making significant contributions to the technological and industrial development of a sector of worldwide economic impact through high value-added products. This technological leadership was achieved as the product of the concurrence of the following factors:

• a sustained commitment to innovation,
• a long-term research and development program carried out in conjunction with research centers, universities and private companies,
• an industrial plan prepared by central and regional administrations that understood the differential value of the commitment,
• a wide-ranging group of entrepreneurs who made the decision to take on the challenge and the technological risk, risking their money as well.

This globally competitive industry at the technological cutting edge yields major benefits in terms of employment and industrial development, not only directly, but also prompted by other sectors and economic activities indirectly, given that most of the production chain stays in Spain.

Any investment in wind and solar thermal power in Spain generates virtually all of its economic activity in our own country. At this time, thousands of Spaniards enjoy quality jobs dedicated to designing, building and operating wind and solar thermal power plants in Spain and in many other countries, while generating economic activity in their surroundings. Spain’s leading technology has given rise to Spanish companies that are building and operating plants in the most developed countries in the world, resulting in the creation of quality employment in Spain and a significant level of exports. This is a sector characterized by a highly technological component and R&D investment which, in the case of solar thermal technologies, is three times higher than the Spanish industry average.

According to the International Energy Agency, solar thermal power will be the key player in the 21^st century thanks to its manageability. And unlike other renewables, its storage capability makes it non-intermittent. Just as hydroelectric power enables an intermittent source like rain to turn into one that can be managed, solar thermal technology does so with the sun. Production costs equivalent to those of gas combined cycles are expected to be achieved by 2020. Solar thermal energy is an undeniable reality and it has a bright future.

The global energy model will be a renewable one, with or without Spain. However, we have a unique opportunity today to maintain and achieve growth in our leadership, export technology, and create wealth and high-qualification jobs. We could also opt to, like so many times before, be mere users that pay a high price over the course of decades for products designed by others, with R&D investment being made by others, and quality jobs being created outside of Spain. With the effort of the business community and support from administration, this sector can become a sustainable driver of industrial and economic development.

This no doubt calls for reliable independent government administrations which, through their decisions, uphold clear, stable and consistent industrial policy that transcends the legislature or party to which they belong. Administrations with a strategy for developing sectors where Spain can be competitive; and this of course demands administrations that do not create uncertainty with a posteriori modification of conditions that cause serious harm to innovative companies and kill the industry.

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Please allow me to devote the last few minutes of my presentation to illustrating how companies can and should also back innovation as a source of leverage for achieving sustainable growth, increasing competitiveness and creating jobs, and I would like to do so by sharing an exciting adventure with you: the adventure of Abengoa.

At Abengoa, innovation in the broadest sense, research and development, are the cornerstones to our strategy for growth.

We focus our growth on new technologies that contribute to sustainability and which include, for example:

• generating electrical power from renewable sources,
• producing biofuels from agricultural biomass and municipal solid waste,
• producing drinking water through desalination or reutilization,
• using hydrogen as an energy vector,
• recycling industrial waste,
• and creating environmentally-friendly infrastructure.

We are engaged in promoting new solutions for the energy and environment sectors on the basis of programs for technological development and innovation, and for this reason we invest around 100 million euros each year in R&D in order to develop and grow high-potential technologies. We do all of this with a special emphasis on attracting, training and retaining the very best people and through Abengoa’s unwavering commitment to sustainable development.

Our R&D activity implies close collaboration with a large number of universities and research centers in a variety of countries, mainly Spain and the United States.

Our R&D+i system includes management and assessment tools that help us to minimize risks and maximize the value of our research, development and innovation projects. For each project, we evaluate the different phases involved in project evolution on an ongoing basis:

• starting with the identification of opportunities or needs,
• preliminary research,
• conceptual design,
• pilot plant-scale experimentation,
• demonstration plant-scale verification and,
• finally, commercial deployment.

During each stage we encounter mistakes, not failures; we assess whether we should continue or not; we discuss the lessons learned; and we make adjustments with a view to continuing on to the next stage. It is a continuous process involving technological, economic and commercial perspectives.

At all times we have technology innovation projects that are already in operation, projects involving the implementation during the commercial phase of new proven technologies, and projects dedicated to developing the new technologies that will support our solutions in the medium and long term.

We have a team of 726 people devoted to technological innovation, and we have processed 221 patents over the past 4 years, which I think is the best indicator that we are headed in the right direction.

Two examples of this trajectory from R&D to new products can be found in our superheated steam solar power towers and our plants which turn biomass into biofuels.

In the first case, we have progressed from saturated steam power towers like the PS-10 we operate in Seville, which was the first commercial solar power tower in the world, to a 50 MW superheated steam power tower we began building in 2012 in South Africa. The technology employed by this new plant achieves:

• a 40% increase in generation cycle efficiency
• and a reduction in water consumption of over 80%
• the two improvements lead us to a cost reduction of 25%, bringing us closer to reaching parity with other fossil-based energy sources.

Furthermore, the new power towers we are designing and testing now, characterized by higher power output capacity and higher temperatures, which will be available commercially in the next two years, will once again lower production costs, lending further credence to the aim of this technology being competitive with combined-cycle plants in the 6- to 7-year horizon.

In the case of second-generation biofuels, we have developed out of the laboratory an efficient process of enzymatic hydrolysis that has already been tested in pilot plants in Nebraska and demonstration plants in Salamanca. From 2009 to 2011, the enzyme cost per liter of ethanol was divided by three and we expect to divide it once again by three by the end of 2014. The commercial plant in Hugoton (Kansas) will enter into operation over the course of 2013:

• producing 100 million liters of ethanol per year from corn stalks,
• yielding 300 liters of ethanol per ton of corn stalk,
• and at an estimated cost for this first plant of only between 5% and 20% over the cost of producing gasoline, assuming an oil cost of between 100 and 80 dollars per barrel.

There is no doubt whatsoever that in a very short amount of time the lignocellulosic bioethanol produced in future plants will be fully competitive. And here I wish to acknowledge the support from the U.S. Department of Energy in developing this first plant.

One derivative of this technology is the conversion of municipal solid waste into biofuels, a project we are most enthusiastic about and one which is already operating at demonstration plant-scale in Salamanca. The challenge facing our society with respect to managing solid urban waste is a hair-raising one, for every day there are more and more of us who generate an increasing number of wastes. In Spain alone, we produce around 25 million tons of waste each year, and turning this waste into biofuels would be equivalent to replacing 18% of the gasoline consumed today derived from oil, which, if we bear in mind that we pay other countries approximately 40 billion euros in importing hydrocarbons, could represent approximately 7 billion euros less in our unstable trade balance. And, in addition to this economic benefit, there is the environmental and social benefit of creating jobs in Spain.

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I shall now conclude by citing the five key components for driving innovation, competitiveness and sustainable development to provide an executive summary:

1. First of all, an education system which prepares citizens to further innovation, citizens who will perform their duties in private companies, at the University, or in Public Administration.
2. Secondly, close collaboration among businesses, universities and public administration.
3. Thirdly, the availability of funding, mainly taken on by the private sector, for new developments ranging from the laboratory to demonstration plants.
4. Fourthly, clear, long-lasting innovation policies and industrial development plans for promoting the economy sectors in which to be able to exercise leadership.
5. And fifthly, legal security.

I have nothing further to add except that I would once again like to thank the organizers of today’s gathering, Ambassador Alan Solomont and all of you for your attention.