Two out of four Spanish companies will invest in branding and sustainability as a growth strategy

Branding and sustainability have become aspects of great importance in Spanish middle-market strategies, not only to help companies become more competitive and resilient in a complex global scenario, but also to help them in their internationalization projects. This is the trend pointed out in the latest edition of Grant Thornton’s International Business Report (IBR), which studies the perspectives and concerns of this type of companies, both in Spain and around the world.

The 44% of executives will invest in their brand over the next 12 months

Spanish companies are the ones in the European Union that will increase their brand investments the most in the next twelve months. This is the outlook of 44% of Spanish executives, a forecast one percentage point higher than the EU average. These data are in line with those offered by InfoAdex, which state that advertising investment in Spain exceeded 12,700 million euros in 2023, which is 4% more than last year.

On the other hand, entrepreneurs with an appetite for exporting are aware that investing in their brand helps them to differentiate themselves from local competitors, offering greater access to customers in international markets as well as attracting new professionals.

According to Ramón Galcerán, president of Grant Thornton in Spain, “companies have invested over the years in their domestic market to create a network and make themselves known, and it is important that they follow in those same footsteps when expanding operations abroad.”

In fact, three out of ten Spanish organizations (29%) say that with their business abroad they seek to increase the reputation and visibility of their brand, the third aspect they are most interested in after quality (39%) and accessing new customers (30%).

“It’s not about reaching a new market and waiting for customers to get to know you; you have to make an effort to create a network, a social media presence, a website and marketing materials. All these actions will help to make the brand known,” says Policarpo Aroca Oviedo, director of Marketing, Communication and Business Development at Grant Thornton.

Sustainability, synonymous with efficiency, innovation and profitability

Spanish executives are also taking into account the value of sustainability when designing their strategies. In fact, nearly half (48%) plan to invest in sustainable initiatives in the next twelve months, an expectation that is one point above the EU average.

Sustainability is increasingly associated with positive and profitable aspects such as efficiency, responsibility, commitment, innovation and profitability. However, they are also aware of the increasingly mandatory nature of the regulations being applied, to the extent that, according to Grant Thornton’s calculations, 50,000 companies, including large listed companies and SMEs, have already had to report on sustainability-related indicators, compared to just 11,600 a few years ago.

In a global market that is increasingly committed to the environment, organizations know that if they want to compete with guarantees when it comes to internationalization, they must learn from best practices and comply with sustainable criteria. Thus, 21% of Spanish companies with business abroad are seeking to improve their sustainability performance.

However, 42% of entrepreneurs in our country fear that the environmental situation, such as the consequences of climate change, will end up affecting their business, a concern that is two points higher than the average for the European Union and one above the average for the study as a whole. In addition, four out of ten organizations find it difficult to implement sustainability due to the complexity of existing regulations.

For this reason, and as Jaime Romano, Partner Director of Consulting and Innovation at Grant Thornton, reminds us, “it is necessary that the whole company, from the technical staff to the management committee, be committed and involved in the design, development and implementation of the sustainability strategy”.

Innovation and technology, essential allies

Technology has become an essential element for managers when designing their future strategies. In fact, one out of every two Spanish companies (50%) expects to boost its R&D strategies in the next twelve months, the highest rate in recent years and which increased by twelve points compared to the last edition of the study. In addition, more than half (53%) plan to invest in technology, an intention that has not stopped growing in recent years.

In terms of specific technologies, 55% of organizations in our country will invest in Artificial Intelligence (AI), an intention four points higher than the European Union average.

“Spanish medium-sized companies are knowing how to see, even more than their competitors in other countries, that the development of AI and its potential impact on business is unstoppable. In addition, this technology is going to offer a series of advantages in terms of sustainability that can make a difference in such a competitive market,” says Isabel Bellot, director of Digital Transformation at Grant Thornton.

In terms of technology and beyond Artificial Intelligence, companies plan to devote efforts to the application of advanced technologies (chosen by 42%), the use of tools that streamline processes (41%) and in fourth place, cybersecurity (40%), a commitment that is below both the EU average (45%) and the global percentage (54%).

Cybersecurity is, therefore, an aspect of improvement for organizations in our country, also taking into account that the National Cryptologic Center records the figure of 940,776 cybercrimes in the last nine months, an increase of 21.5% over the previous year.

Lorenzo Bellido, Director of Cybersecurity at Grant Thornton, warns that “eight out of ten cyber attacks suffered by companies are aimed at employees, through malware or phishing” and reminds us that “investing in cybersecurity has become essential nowadays, and Spaniards are not very proactive in this regard. Let’s not forget that, if a problem arises and adequate precautions have not been taken, any company can find itself in real trouble”.

In terms of sectors, the overall data from the IBR study shows that the companies that will invest most in cybersecurity-related tools will be IT companies (65%), the public sector (59%), banking (55%) and the consumer sector (54%). On the other hand, investment in Artificial Intelligence (AI) will be strongest among technology, financial and energy companies, of which seven out of ten will bet on such technology.

Shortage of talent, a threat to companies’ profitability

Talent is another of the most valuable investments that companies can make if they want to continue to grow, be competitive or even internationalize their businesses. According to IBR data, 43% of companies in our country plan to increase their workforce in the next 12 months, expectations that are two points higher than their European counterparts and which, moreover, have grown by five points compared to the last edition of the study.

In the context of a global and highly competitive market, the shortage of qualified talent can considerably hinder businesses and their profitability; in fact, 47% of Spanish managers consider it a barrier for their organizations. To increase the attraction and retention of talent, the forecasts for salary increases have grown by two percentage points, reaching 18%.

On the other hand, nearly half of Spanish companies (46%) expect to increase their investment in training for their employees. These forecasts have increased by nine percentage points with respect to the last edition of the IBR and is the highest rate since data on this indicator has been available, denoting the growing importance of bringing the skills of professionals in line with market trends, especially in relation to new technologies.

“Investment in training is always a good option for companies to increase their competitiveness and for professionals to feel motivated and generate a sense of belonging. Companies must constantly train their employees so that they can interact with technology in a way that fosters growth,” recommends Pablo Gonzalez-Costea, director of People & Culture at Grant Thornton Spain.

Training is chosen by half of the organizations in our country as the priority HR area to which to dedicate efforts, followed by increasing salary or benefits (48%), leadership development (42%), increasing headcount (41%), or fostering company culture (30%).

On the other hand, two out of ten companies that internationalize expect to gain access to new talent thanks to their business abroad. Thus, companies with an appetite for exporting take advantage of their international experience to generate value through the growth of their professionals, the development of innovation, the opportunities generated by new markets or the implementation of best practices learned. Talent is an aspect directly related to the success of any organization, so it is foreseeable that entrepreneurs will increase their commitment to the development of professionals.