Andalusia closed 2025 with two data points that barely made noise in the national debate, but should have. The region attracted €1.364 billion in foreign direct investment, up 40.5% from 2024 and the highest figure since official records began in 1993, while the rest of Spain saw its own FDI fall 21.8%. It also finished the year with €40.433 billion in exports, its second-best year since 1995, with a trade surplus versus the ongoing deficit on Spain’s balance of trade. The South, in 2025, grew against the grain.
That strength coexists with a reality that remains true: Madrid and Barcelona accounted for more than two-thirds of all startup investment in the country in 2025 — €1.2B and €1.1B respectively, according to the Spain Tech Ecosystem Report 2026 — and each ecosystem is approaching €50 billion in added value, individually.
But the story of a country with only two engines is beginning to look narrow. What’s happening in the South isn’t a regional anecdote: it’s a structural shift, and the South has not chosen to compete with Madrid or Barcelona on the same terms, but to lead specific verticals in technological sovereignty and industrial capacity.
Complementarity, Not Competition
The first is aerospace, which already generates close to €3,000 million and accounts for almost 14% of Andalusia’s industrial GDP. In January 2026, the aerospace sector exported more than double what it did in the same month a year earlier, the largest growth in Andalusia’s entire export basket. The ADM Seville Fair has brought together more than 300 companies from 30 countries with Airbus as the main partner: this isn’t a showroom event, it’s the thermometer of a supply chain that already competes on the global market.
The second is green hydrogen. Andalusia already has 43 projects catalogued across the value chain of renewable hydrogen, according to the registry of the Spanish Hydrogen Association, with Huelva, Cádiz, and Seville as the main activity hubs. The Andalusian Green Hydrogen Valley, led by CEPSA and Iberdrola, has become one of Europe’s largest renewable energy hubs.
The third is the cybersecurity, with its epicenter at the Andalusia Technology Park in Málaga: more than 715 companies installed, a combined turnover exceeding €4.8 billion, and 29,000 qualified jobs. Google has located its Cybersecurity Center of Excellence there; Babel set up at the park an international HUB with capacity for 500 jobs; Capgemini, Dekra, or Vodafone now lead from Málaga critical business areas that until recently resided in Madrid. Málaga TechPark has stopped competing only to attract foreign investment: it has begun directing it.
And the fourth is agritech, with Almería as a near-surreal case study: its more than 30,000 hectares of greenhouses export between 75% and 80% of their horticultural production. Vegetables were, in fact, the chapter that sold the most abroad in January 2026, setting a monthly record, and the entire greenhouse complex captures a CO2 amount comparable to that emitted by 250,000 cars.
These four pillars no longer debate only within offices; they have their own showcase. Each September, the Pavilion of La Navegación in Seville hosts Al Andalus Innovation Venture, which in its 2025 edition brought together more than 2,800 professionals, 810 startups, 250 corporations, and 192 investment funds, with 950 business meetings arranged, in sessions dedicated precisely to artificial intelligence, green hydrogen, and innovation in the agri-food value chain. It’s proof that the Andalusian ecosystem already has its own meeting point, and that capital is starting to take it seriously.
The Scaling Challenge
Yet the uncomfortable question remains. Spain today has barely 48 scaleups that have surpassed €100 million in cumulative funding, far behind Germany, France, or the United Kingdom. It is precisely in that growth phase, not at birth, where the South can offer something that Madrid and Barcelona do not provide with the same intensity. With lower operating costs, available industrial land, and a real productive base (energy, aerospace, agrifood) on which to build large-scale skilled employment. If the two big capitals continue to be the places where most Spanish startups are born, the South could become the place where some of them finally learn to grow.
The map of Spanish innovation no longer has two points; it now has four. And the one that perhaps nobody saw coming — the South — is precisely the one that closed 2025 growing faster than any other.
Diego Vargas, cofounder of Al Andalus Innovation Venture and partner at Hyperion Partners.
