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The statistics make for grim reading: unemployment in Cataluña stands at 22.84% and youth unemployment nationwide at 56.5%. Government cut-backs have left many out of work, challenging the traditional ambition of a secure civil servant job.
Start-ups are helping to fill this void. The growth in the numbers of self-employed Spaniards has coincided with a rapid rise in the amount of start-ups seeking early stage capital funding.Without the traditional protection of the state, workers have been pushed out of their comfort zone. According to the Global Entrepreneurship Monitor (GEM) 26% of early-stage entrepreneurs in Spain are driven by necessity. In a country where fear of failure has formed a traditionally negative attitude towards entrepreneurship, unemployment is forcing professional ingenuity. The economic situation has made the benefits of entrepreneurship more visible. The country is opening up to its new economic reality.
“This landscape is perfect for entrepreneurship,” says Josemaria de Churtichaga, associate dean for IE School of Architecture in Madrid.
The financial crisis has led banks to search for new investment options, and the Barcelona start-up scene is a major beneficiary of this. Spanish entrepreneurs offer a more affordable option than their international rivals. Venture capitalists from the USA are increasingly looking to Europe for the next Twitter, due to America’s high costs, limited tech talent and hard migration rules. Barcelona, seen as the tech-capital of Spain with more than 200 active digital start-ups, can provide the tech knowledge and low costs to attract their dollars.
An infrastructure is developing to support the city’s ambitions through initiatives such as District 22@, ‘el districte de la innovació’, the Barcelona branch of Telefónica’s Wayra start-up accelerator, and the Momentum Project run by ESADE business school in conjunction with BBVA to promote social entrepreneurship in Spain. They’re supported by a thriving events scene for start-ups and the active support of local government, particularly through the Barcelona Activa incubator initiative.
Crucially, recent legislation from national government has backed-up the city’s ambitions. The title of this article is drawn from an apocryphal quote of former British Prime Minister Jim Callaghan in 1979 that led to the downfall of his government. Prime Minister Rajoy does not intend to repeat this error of denial. Legislation has been passed to reduce paperwork and increase labour flexibility and tax breaks have been introduced as a means of encouraging business. Government has also pledged to aid entrepreneurs in funding access and to reduce the contributions to state benefits systems for start-up founders. A further law is being drafted to unravel Spain’s notorious bureaucratic tangle when setting up new companies.
Marcel Rafart, general partner of Barcelona venture-capital firm Nauta Capital, calls this “. That helps to push social change.”
This month Spain’s National Statistics Institute stated that the country has finally emerged from recession. The Spanish culture of entrepreneurship must develop further, and an increase in venture capital and government support for business is still required, but the economic crisis may have laid the seeds for a brighter future for entrepeneurs in Barcelona.