When the calendar turned to the 20th century, Bilbao, Spain, was a city of belching steel mills. In the 1930s, the city and the Basque country around it was the heart of resistance to the fascism of Francisco Franco. The aerial bombing of the nearby market town of Guernica, immortalized in art by Pablo Picasso, opened the way for the fall of Bilbao to Franco’s forces. For decades afterwards, the city was the center of Basque separatism, which often turned to violence in what the BBC once called “Europe’s longest war.” The city was considered so backwards that a metro area of about 1 million didn’t even have a public university.
None of that makes Bilbao sound like a good candidate for becoming a global technology capital of the 21st century, and yet there it is – ranked in a recent report as one of the world’s emerging tech hot spots.
Many of the cities cited in the annual Global Startup Genome Ecosystem Report 2021 are the ones you might expect. The Top 5 are very much “the usual suspects”: Silicon Valley, New York, London, Beijing and Boston. There are probably more surprises in the Billboard Top 40 – Justin Bieber, really? – than this Top 40. But then there’s Bilbao, which isn’t in the Top 40 – yet – but merits substantial mention in this report anyway as a rising star. Consider it the municipal equivalent of a new song that’s entered the charts “with a bullet,” as they used to say.
How does a city in Spain relate to us here in Southwest and Southside Virginia? Because Bilbao stands out as a prime example of a city that has reinvented its economy. That means there are likely lessons here that communities across our region could apply to their own situations. Yesterday I listed five big lessons from the report that we can translate to our part of Virginia. Today, let’s take a closer look at Bilbao, a textbook example of a community that has transformed its economy to better fit the new economic realities of the 21st century.
Some of the reasons Bilbao gets singled out for attention in this report overlap with at least five of the six big lessons I cited yesterday – universities spinning off startups, a young workforce, an educated workforce, incubators and accelerators, an activist government and low taxes. (As I pointed out, those last two items give both liberals and conservatives something to love and hate, perhaps an indication that neither ideology has the sole solution to economic prosperity.) The Global Startup Genome report praises Bilbao – and the wider Bay of Biscay region – for having “the world’s best taxation system for R&D intensive companies.” That’s hard to measure – there are lots of ways to measure taxes – but this one is pretty simple: 57% of the workforce holds a university degree. By Virginia standards, that puts Bilbao almost on a par with Fairfax County, where just under 61% have at least a bachelor’s degree. The difference is that Fairfax County was built out of farmland, so it had no real economic legacy to undo or overcome. When we look at industrial (or perhaps you might say former industrial) cities in our region, the rates are much lower. In Roanoke, 23.2% of the workforce has a bachelor’s degree. In suburban Roanoke County, the rate is 34.7%. In Lynchburg, it’s 33.6% (despite having a lot of colleges). In Bristol, the figure is 23%. In Martinsville, 20.9%. In Danville, 18.9%. In Covington, 14.6%. In Galax, 10.3%. In many rural areas, the rates often run in the teens – or lower. Dickenson County is 9.3%. Greensville County is 7.5%. All these places ought to be looking to Bilbao to see how it turned itself from a steel town – and we all know what happened to steel towns in this country – into a glittering technopolis.
This report doesn’t say but others do. A report last year for the British website Open Democracy offers some clues. First, that report describes just how low Bilbao sank. Under Franco, Spain had followed protectionist policies that propped up the local steel industry. When a democratic Spain joined the European Union in 1986, many of those legacy industries “virtually collapsed,” the report said. This sounds much like what happened when globalization reorganized the textile and furniture industries in the United States, something that places like Danville and Martinsville can testify to. Except that Bilbao was in even worse shape: “Unemployment reached 26 percent by the early 1990s, accompanied by problems such as drug addiction and the spread of HIV.”
How did Bilbao respond? Not like other places. While other countries were trusting in market forces (be they liberal governments or conservative ones), Basque country opted for a more interventionist approach. “It undertook a comprehensive government industrial policy, in close cooperation with the private sector, to increase high-tech manufacturing in clusters of companies, technology institutes and research centers in areas such as machine tools, aeronautics, automation, transport and logistics, environmental industries etc. By 2005 the Basque country had ten applied technology centers, thirteen research and development centers, four research laboratories, two public research organizations, and three technology parks.” All this is all the more remarkable when you consider that Bilbao didn’t even have a public university until 1968. Now it’s the center of a knowledge-driven economy and 26% of the advanced degrees awarded there are in STEM fields, double the rate in both the European Union and the United States. A report two years ago ranked Bilbao as one of the 20 most prosperous cities in the world.
It’s taken decades but Bilbao has reinvented itself. (The city is also home to an iconic museum, the Guggenheim Museum Bilbao, which served in some ways as an inspiration for the Taubman Museum of Art in Roanoke. The museum may have helped Bilbao think about itself differently, but the city’s economic transformation was a lot deeper and more complicated than simply having a world-class destination museum.)
There seem to be lots of lessons here for Southwest and Southside Virginia. Perhaps the most painful is this: Bilbao’s transformation took decades. This really is generational work. Perhaps the most reassuring is this: Bilbao is not the most important city in Spain. In fact, it’s in a part of Spain that’s been traditionally overlooked by – and sometimes suppressed by – the central government. We in Southwest and Southside haven’t had our traditional language outlawed. But we sure do feel overlooked by Richmond, and now by an economy that we often see passing us by. So in that regard we have much in common with Bilbao; might we be able to have even more in common than a common economic heritage? Might we have a future one in common, as well? As the Open Democracy report put it: “The Basque Country has reinvented its industrial metropolis, Bilbao, as a model of a post-industrial high-tech economy.” That prompts the question: Bilbao today, Bristol tomorrow?
Maybe. As for me, tomorrow I’ll be talking about another city we ought to be looking to for inspiration.