By Gabriela Gulesserian/Cristo Suárez. | The 15 northern municipalities from Tacoronte to El Tanque have generated merely one in ten jobs created over the past year on the Island, as per Social Security affiliation figures released by the Canary Islands Institute of Statistics (ISTAC).
From September 2023 to 2024, Tenerife saw the creation of 13,840 jobs. However, only 1,560 of these positions were in the fifteen northern municipalities, accounting for 10.5%, or one in ten.
Notably, almost all the increase in employment is concentrated in Puerto de la Cruz, which has added 1,530 new jobs over the last year, predominantly in the hospitality and tourism sectors. This growth comes as seven other areas have witnessed job losses in the past year, including Buenavista del Norte (-10); La Guancha (-10); San Juan de la Rambla (-70); Saint Ursula (-210); El Tanque (-85); Icod de los Vinos (-70) and La Victoria de Acentejo (-5).
Interestingly, these municipalities rank among the poorest on the Island, according to the Personal Income Tax Filers Statistics released by the Tax Agency, with figures updated from 2022.
Conversely, while the growth is more modest than in Puerto de la Cruz, there are also positive trends in La Orotava, with 155 additional jobs compared to 2023; Garachico (90); La Acentejo Massacre (10); Los Realejos (40); El Sauzal (15); Los Silos (5); and Tacoronte (170).
This slow job creation rate has persisted in the North for several years. Over the last five years, a total of 52,402 new contributors have been registered in Tenerife from September 2019 to September 2024, with just 5,521 jobs created in the 15 northern municipalities.
José Miguel González, Consulting Director at Corporación 5, explains that this situation arises from two primary factors: the absence of fiscal incentives in the municipalities that encourage businesses to establish themselves there, and difficulties with mobility, which compel a significant portion of the population to travel to regions where activity is thriving, particularly in the metropolitan area and southern Tenerife due to the concentration of services and tourism-related establishments. These factors also contribute to a supplementary issue, namely the lack of affordable housing and exorbitant rental prices.
Hence, to alter the economic landscape of the Island, immediate measures must involve specific actions related to taxation, undertaken by both the Canary Islands Government and the Cabildo of Tenerife; Municipal corporations should also provide competitive advantages to businesses interested in setting up in their areas.
In this context, another significant challenge arises: the need for administrative efficiency from local councils to reduce excessive bureaucracy. This often hampers the profitability of investment projects, particularly in obtaining opening or construction permits, leading to projects not materialising or relocating to areas offering greater facilitation.
Moreover, enhancing the use of public transport is essential. “It’s a combination of numerous factors that contribute to a complex issue that cannot simply be addressed with straightforward measures, but solutions do already exist,” González emphasises.
When devising strategies to rectify this situation, local authorities are focusing on training initiatives, specifically targeting groups such as youths, long-term unemployed individuals, women, vulnerable populations, and those over 50 years of age.
Training
In this regard, José Miguel González states, “Every euro invested in training can yield positive returns, but it is not confined to a specific location nor is it an absolute necessity or prerequisite for employment.”
Los Realejos has been at the forefront among northern municipalities in implementing tax incentives over a decade ago to stimulate local commerce and foster job growth. Initiatives such as the entrepreneurial voucher, ‘Local 0’, and ‘reMÄRCAte’ serve as notable examples.
The entrepreneurial voucher is a competitive grant aimed at enhancing the local business, professional, and service landscape through new ventures based in Los Realejos, assisting with initial operational costs.
The ‘Local 0’ initiative provides financial support for reviving vacant commercial premises in the town’s commercial areas, covering rental expenses for a maximum duration of six months for qualifying individuals or entities establishing businesses there.
Additionally, a third municipal programme is designed to assist established small and medium-sized enterprises in the town with renewing and modernising their brand image, which also allows bars and restaurants meeting the specified criteria to participate.
In La Orotava, the entrepreneurial voucher was introduced three years ago with the same aim: to facilitate employment access and support entrepreneurs and self-employment to stimulate the local economy.
In the past year, the Cabildo of Tenerife has been striving to establish industrial estates as mechanisms for generating economic activity and employment, contributing to economic diversification, as stated by the island’s Minister of Industry, Manuel Fernández.
For example, La Victoria de Acentejo requires modifications to its General Planning Plan to create land suitable for the establishment of industrial estate number 13 in Tenerife.
Another initiative aligned with this objective is the establishment of an industrial incubator in the La Gañanía Industrial Estate in Los Realejos, which aims to facilitate the launch of business initiatives in the northern region of the Island.
A measure that José Miguel González views positively as these may ultimately become part of the Canary Islands Special Zone (ZEC), boasting lower tax rates, where establishing distinct parameters from the rest of Tenerife, akin to La Palma and El Hierro, is feasible. “The regional areas could be further divided to enable a different economic metabolism for the Island than currently exists,” he concludes.