# Valencian Community economic and innovation trends > Live situation record from CLSTR: https://clstr.news/situations/valencian-community-economic-and-innovation-trends > Updated: 2026-09-18T13:06:11.000Z. Sources: 5. Developments: 2. The Valencian Community is navigating a complex economic landscape characterized by a gap in research and development (R&D) investment and an increasing reliance on international partnerships to bolster innovation. Data from the LAB Observatory indicates that while regional businesses are prioritizing innovation to remain competitive, R&D spending remains below both Spanish and European Union averages. In 2024, regional companies invested 1,858 million euros in R&D+i, representing 1.25% of the regional GDP. The report notes that companies tend to allocate more resources to product and process innovation than to internal R&D, and the adoption of artificial intelligence among industrial firms remains limited at 16.1%. To address technological and economic needs, the region is strengthening ties with China. València Innovation Capital has signed a Memorandum of Understanding with Hangzhou to connect innovation ecosystems in sectors such as artificial intelligence, clean technologies, and healthcare. This relationship has expanded to include the establishment of a Universitat Politècnica de València campus in Hangzhou, facilitating deeper technological cooperation. Chinese capital continues to play a significant role in the local industrial sector, particularly through investments in automotive manufacturing facilities in Almussafes and Sagunt. This interest is driven by Spain’s competitive advantages, such as established production chains and renewable energy costs. To further support the local entrepreneurial landscape, the Valencian Institute of Competitiveness and Innovation (Ivace+i) is investing 1.5 million euros to reinforce the network of European Business and Innovation Centres (CEEI), aiming to bolster the regional startup ecosystem. ## Timeline ### 2026-09-18: Valencia strengthens economic and innovation ties with China The Valencian Community is expanding its international innovation footprint through a new partnership with Hangzhou, China, and increased Chinese investment in its automotive and technological sectors. 3 sources. https://clstr.news/cluster/valencia-strengthens-economic-and-innovation-ties-with-china ### 2026-09-15: Valencia businesses face R&D investment gap despite innovation growth Valencian companies are prioritizing product and process innovation, but R&D investment remains below the Spanish and EU averages, according to the latest LAB Observatory report. 3 sources. https://clstr.news/cluster/valencia-businesses-face-rd-investment-gap-despite-innovation-efforts --- Cite as: Valencian Community economic and innovation trends. CLSTR, https://clstr.news/situations/valencian-community-economic-and-innovation-trends