The nation’s expanding horizons have brought about the award-winning Terminal 4 at Madrid’s Barajas airport.

ew metrics can account for the Spanish makeover since 1986, when it joined the European Community. By 1989, GDP had grown 4.8 percent annually and per capita income had leapt 4 percent. After decades of unstoppable growth, income per person climbed to 105 percent of the European average in 2007. The indicator, by the European statistical office, factors out inflationary differences between countries. But it is nevertheless a measure of how far this country of 45 million has changed. What next?

“We are now the eighth-largest economy in the world and we want to make sure we stay there for a long time,” says Joan Clos, the Minister of Industry, Tourism & Commerce. A former mayor of Barcelona, Clos is keenly aware of competitive strategies in sectors like tourism and renewable energy. For him, Spain is about to undergo a second competitive shock as the construction sector ceases to drive economic activity. Construction companies are however bolstered by the services of the Seopan group, which highlights the extensive experience and expertise of its members to the international business community.

With real GDP growth of 2.8 percent in 2008, it is time for Spain to capture technology in its total factor productivity (TFP).

Policymakers are playing the role of enablers these days. ICEX, Spain’s trade promotion agency, has been matching investors with scientific parks and universities since 1983. The liaison has helped alter the mindset of hundreds of Spanish SMEs, often unable to implement R&D schemes on their own. In the world of biotech, the gamble is already paying off. Last year, Zeltia, a bio-pharmaceutical company based in the northwestern region of Galicia, applied for FDA approval for a drug derived from marine organisms. Its R&D expenditure had grown to €36.7 million ($53.3 million) by 2004.

Spain’s financial system bears little resemblance to its former self. Banks have expanded into Europe and Latin America with the kind of gusto that raises eyebrows at trading floors. In 2004, Spain’s Banco Santander Central Hispano bought the UK’s Abbey Bank in Europe’s largest cross-country merger. Even lesser banks are unrecognizable. “Twenty years ago, savings banks didn’t have any industrial participation and half of their assets were in public debt securities,” says Juan Quintas Seoane of the Spanish Confederation of Savings Banks (CECA). Today, their net worth has increased 60 times and volume of assets exceeds Spanish GDP.

Meanwhile, bilateral trade with the U.S. now stands at $10 billion, up from $4 billion in 2004. Blue chip companies like Telefonica snapped up the Lycos Internet portal in 2000 for $5.4 billion, selling it later to Daum Communications of South Korea. With the strength of the euro, prêt-a-porter chains based in Spain are opening flagship stores in New York. In Ohio, a subsidiary of Endesa, a Spanish energy giant, is retro-fitting hydraulics factories to produce rotor blades for wind turbines. In fashion, trendsetters like Zara have invented a new school of marketing. Part of the Inditex Group, Zara produces 10,000 designs per year and has been described by a Paris fashion director as ‘possibly the most innovative and devastating retailer in the world’.

For Gerardo Diaz Ferran, of the Spanish Federation of Entrepreneurs (CEOE), this is a unique time window. A switchover to a technology-led export model is the way for Spain to stay ahead. On a visit to Cairo last February, Diaz asked Egyptian authorities to allow Spain to launch a series of mega-projects across the Middle East, including tourist infrastructure and industrial engineering. “We have a lot to offer at a good price,” says Clos, also part of the trade delegation in Cairo.

All said and done, Spain is also a social and artistic innovator. Issues like gay marriage, embryonic stem cell research and gender parity in politics are a few of the characteristics of the new Spaniards. While star architects like Santiago Calatrava work on skyscraper designs in Chicago, actors like Javier Bardem have walked off with this year’s Golden Globe Award for Hollywood’s latest hit, No Country for Old Men. The title of the movie could very well apply to the new and unstoppable Spain.