Reinvention, not recovery: How Bilbao-Biscay changed its game

The economic history of the Basque Country city Bilbao, in the province of Biscay, is rooted in industry and trade.

Bilbao was founded in the 14th century as a commercial enclave with maritime connections to England, Flanders and France. At its origin, it had a competitive location, advantaged by iron deposits, availability of water and wood, and proximity through the sea to emerging trade routes.

Throughout history, Bilbao and Biscay have demonstrated a capacity for reinvention, transformation and adaptation to economic changes. This has forged a spirit of collective resilience.

By the middle of the 19th century, the decline in commerce and the metal industries, the two fundamental pillars of Biscay’s economy, had begun. Modernization established a new economic model, with the iron and steel industries to the fore.

This required incorporating new technologies imported from Europe, introducing new production processes and forms of business organization and the mobilization of large volumes of capital.

It marked a turning point and the beginning of the first major transformation of the economy of the city and its metropolis, making possible the development of other industries and businesses, such as shipbuilding, auxiliary equipment and banking.

The regional economy grew and continued expanding even after iron resources were depleted, turning Bilbao into an important industrial and finance centre and the economic capital of Biscay.

Economic growth brought important changes in land use, with industry moving downstream, as well as spectacular demographic growth – Bilbao’s population doubled from 411,000 in 1950 to 955,000 in 1981, according to the Spanish Statistical Office – concentrated around manufacturing complexes until 1975.

However, in the 20th century's last quarter, a new turbulent period of instability and change arrived, upending the prevailing model based on the electro-mechanical industry, the expansion of petrochemicals and access to affordable energy.

The oil price shock in 1973-74 was the trigger and soon, countries such as the United States, Germany, Japan, France and the United Kingdom witnessed a drastic reduction in the growth rate of their manufacturing industries and an increase in competition from rising economies in Asia and Latin America.

A new world order emerged, along with a new economic system.

In the 1980s, Bilbao and Biscay suffered from the closure of factories and shipyards, causing high unemployment (between 25% and 35% in some areas of Greater Bilbao), the decline of the population, environmental degradation and social exclusion. Bilbao and Biscay had to transform again.

Public, private and social leaders made an audacious decision in 1992 to launch a new strategic plan for the metropolitan area focused on people. With one million inhabitants distributed in 30 towns across the metropolis, the idea was to transform the economy and change the shape of the city.

The revitalization process began with infrastructure: a series of emblematic projects such as the regeneration of the old port, industrial areas and obsolete transport facilities.

New catalysts were then added. The construction of the Bilbao Metro in 1995 and the Guggenheim Museum in 1997 became flagships of metropolitan reinvention based on connectivity and culture.

The extraordinary success of these projects promoted cultural, sports, business and transportation infrastructures; new spaces were recovered and neighbourhoods built.

Central to this transformation was the revitalization of the Nervión River, the backbone of the entire metropolis. Projects to decontaminate industrial land and projects to improve the sanitation network were addressed. This effort greatly improved water quality, which led to the recovery of more than 60 species (fish, algae and other organisms).

Participation, civic renewal and governance was integral, advanced by Bilbao Metropoli 30 in 1991, a forward-looking non-profit institution. Bilbao began to look attractive to urban planners and its residents.

Bilbao continues to address new economic and social challenges, such as the expansion of the Fine Arts Museum, a central train station, the regeneration of land for business, educational or research uses, as well as the increase in the supply of social housing.

Other actions to revitalize the estuary as a leisure and business space, new green area creation, sustainable mobility promotion or student attraction to face demographic change are on the local agenda.

While the culture-driven recovery of Bilbao is now well known, the reinvention of Biscay is less so. Now, it is a competitive industrial region with a strong specialization in advanced manufacturing and services, mobility and energy. It has quality employment, territorial balance and social cohesion.

Biscay is committed to the digital, technological and environmental energy transition, as well as the development and attraction of talent (STEM – science, technology, engineering and mathematics), reinforcing its positioning as an innovative region, attractive for investment and characterized by inter-institutional and public-private collaboration.

The city’s ability to harness culture as an economic driver, diversify its regional economy, engage in collaborative urban renewal and embrace sustainability has positioned Bilbao as a model for cities seeking holistic transformation.

The next step in this transformation is linked to The Bay Urban Visioning Awards as an international platform through which Bilbao Metropoli 30 – responsible for revitalizing the area – and its partners aim to showcase innovative urban transformation practices that can inspire cities, metropolises and regions around the world.

From Bilbao, Biscay, the Basque Country, this is our modest contribution to the common purpose of remaking our cities for an adaptive future.