Tourism, immigration, foreign investment, and public spending have been credited with this economic surge. But as the co-founder of a successful scale-up, I have my own theories on not only how and why our economy hit its stride in recent years but also, more importantly, where we should go from here.

A booming tech startup scene

Access to talent in Spain is increasingly becoming unparalleled across Europe. Despite Spain investing below the EU average in research and development (Spain’s 1.44% of GDP vs an EU average of 2.27%), our universities are increasingly becoming centers for advanced research in fields like AI, robotics, cybersecurity, and renewable energy. For example, the Barcelona Supercomputing Centre at the Polytechnic University of Catalonia is a global leader in high-performance computing. Many universities are also active participants in EU-funded research initiatives (such as Horizon Europe) and host incubators and accelerators that support entrepreneurial ventures. 

In addition to graduates, Spain is attracting a growing number of executives from across Europe and beyond to our tech scene. According to the 2023 Startup Heatmap Report, Barcelona has consolidated its position as the second most preferred EU hub for startup founders for the sixth consecutive year. The tax incentives for foreigners and executives from overseas are stacking up too. 

The 2022 Startup Law has provided a more favorable legal and financial framework for creating and scaling emerging companies in Spain. Its implementation has not only created a more accessible environment for local entrepreneurs, but it has also lured in more foreign investment to boot.

Spain’s ability to attract international investors is growing every day. There has been a growing realization that it is possible to build high-growth companies in Spain that can compete globally and raise capital from international funds. Today, alongside Abacum, the likes of Cabify, Glovo, Job&Talent, Idealista, and TravelPerk are all Spanish tech success stories.

According to a recent report from Dealroom, the combined value of Spanish startups surpassed €100 billion in 2023, a 14% increase from 2022. They also raised €2.2 billion across 850+ funding rounds last year across varying levels, from rounds below €15 million to those exceeding €100 million. Spain now ranks fourth in Europe for early-stage investment, and this growth underscores its potential as an emerging powerhouse for European tech innovation.

Finally, Spain is a country with multiple business hubs, meaning it isn’t as heavily centralized as other European nations. Though Barcelona can dominate the headlines, it isn’t the only city that’s growing in prominence as a tech hub. The likes of Madrid, Valencia, Málaga, Bilbao, and Seville all contribute to Spain’s multi-layered economic draw. Comparatively speaking, the likes of the U.K. and France have very high talent concentration in one city.

Persistent challenges

It would be naive to only wax lyrical about Spain’s economic prowess without confronting a few home truths. Yes, GDP growth may be world-leading, but our collective economic clout arguably doesn’t match it. 

For instance, Spain’s current GDP per capita is a major problem. Right now, worryingly, not only does it sit below the EU average but it is also below Spain’s pre-COVID and pre-Great Financial Crisis levels. Disposable income per capita still really lags where it needs to be relative to overall GDP. This means that at an individual level, Spaniards are becoming poorer. The recent floods in Valencia and Southern Spain only compounded this issue due to the scale of the disaster.

Productivity levels have also consistently been suboptimal for years and we currently have the highest youth unemployment rate in Europe. And though tourism has been an economic boon for Spain, some would argue that it’s creating more problems than it’s solving nowadays. It skews the housing market as expats and foreign buyers purchase property in metropolitan areas, making it much harder for locals to get a foot on the ladder.

Whilst it may not necessarily be a silver bullet, doubling down on the growth potential of Spanish tech startups can go some way to improving many of Spain’s economic imbalances

The Startup Law was a step in the right direction—but we must go further. Nationally, we would be in a much better position if we had more incentives for startups and international companies to set up shop here. More coherent stock option regulation, enhanced incentives to found a company, and lower entrepreneur taxes. Spain must also increase investment in R&D as a percentage of GDP. These are but some of the levers that the government could pull to make entrepreneurship a more attractive proposition. 

If Spain truly wants to be the economic jewel in the European crown, we need to be bolder and braver and actively encourage entrepreneurial endeavors in a drive for more innovation, a healthier supply of jobs, and more sustained growth.

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The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.