Encouraging the city’s entrepreneurial spirit

Barcelona's economic revolution is helping to encourage the
emergence of a new business approach, say Joan Roca and
Jordi Casas of Roca Junyent.

There is no doubt that the Catalan
economy has been affected by the
global financial crisis as well as the
downturn in Spain's own economy. But the
region continues to place a strong emphasis
on its position as an international technology
centre, and consequently is now seeing the
emergence of a vibrant 'start-up' and
entrepreneurial business culture, says Joan
Roca, corporate partner at Roca Junyent.

'As a global economy Spain is inevitably
being affected by events well beyond its own
borders, with the impact clearly being seen
in different ways across Spain's different
regions but each of which is also now
responding in a dramatically different way.'

As Spain's political and finance capital,
Madrid has clearly suffered the most from
the global financial crisis, but as the markets
recover so will it, they believe. Barcelona's
economy is global in a more traditional
sense.

'There has always been much more of a
focus on industrial manufacturing and on
imports and exports and consequently it has
been hit by the international slowdown in
consumer spending and global trade,' says
Jordi Casas a Roca Junyet corporate partner.

Local businesses are therefore having to
adapt to a changed business environment,
even though the region remains Spain's
major trade hub, but even before the onset of
the current economic crisis Barcelona had
already been making significant efforts to
diversify its economy, they say.

'There has been a much greater push
towards developing the service economy,
one focused more towards innovation and
research and development (R&D), and the
result is that Barcelona continues to emerge
as a preferred location globally for designled
industries,' says Roca.

The region's car industry may be
suffering, but Volkswagen continues to focus
a significant portion of its international
design and R&D expertise at its Martorell
plant, he notes, with a remit that now
encompasses its local Seat, as well as
Volkswagen and Audi brands.

'For multinational industrial companies
Barcelona remains an attractive choice. But
besides mere design expertise, it is also
increasingly the focus for the most cutting-edge
R&D expertise within many of the
world's major technology, chemical and
pharmaceuticals companies,' adds Casas.

But Barcelona's evolution is more than the
mere sum of its parts, they insist. Its position
as a research centre is attracting ever deeper
expertise, which is being further enhanced
by the city's main research-led universities
and business schools.

'There is a cluster mentality, the
technology companies attract more expertise
and the business schools encourage a more
entrepreneurial spirit. This combination is
positioning Barcelona as Spain's 'start-up'
capital and an inevitable result is a dramatic
upturn also in emerging company
investment,' says Roca.

Spain's private equity industry may be
largely headquartered in Madrid, but the
majority of start-up venture capital
investment is focused on Barcelona, as well
as a big stake of middle market deals, they
say. An importance piece also in the city's
commercial self-fulfilling prophecy.

'When it comes to the number and
volume of investments by business angels
and early-stage investment funds, Barcelona
is well ahead. Again though, the availability
of funds means also that business schools
graduates and those with an entrepreneurial
spirit within established companies also
seem to be much more willing to venture out
on their own and to try something new.'

Economically, things may not be as
certain as they perhaps once were for the
region but Barcelona is not prepared to
simply wait for the better times to return,
they insist. 'The trend seems very much
towards those who can to instead begin to
take charge of their own destinies,' says
Casas.