Aloe vera industry in the canary islands: International competitiveness and future scenarios

Abstract

Exportation to EU of aloe vera from The Canary Islands are nearly inexistent, although the archipelago is the leading European region in the farming and production of this plant with some ten million adult plants, what would be enough to satisfy the whole demand in Europe. Based on these arguments, this working paper has the aim of analysing regional competitiveness of The Canary Islands in the aloe vera industry, by applying Porter’s diamond as the methodological framework. This model was selected because it can be used in different sectors to obtain consistent results about the competitive advantage bases of an individual industry that are located in the territory. Additionally, the previous study is complemented with a PEST analysis for the identification and interpretation of those variables that represent external influences to the industry. Drawing on the conclusions of these two diagnoses, systems dynamics is used to elaborate scenarios on the possible future evolution of basic socio-economic indicators for the industry, in order to study the impact that specific industrial strategic decisions might have on the competitive development of the sector, aiming to a higher demand. In the scenarios tourism industry plays a key role, and the beneficial synergies between both economic activities are analysed. Thus, the results in the optimistic scenario show that business profits in the aloe vera industry would be significantly higher through the innovation and improvements in products, advertisement, and cooperation with hotels and other tourism agents.