Barcelona is attempting to attract investors and entrepreneurs. However, challenges remain if the region is to establish a new era of economic growth
Barcelona capitalised off the back of the 1992 Olympics, which rejuvenated the city with a period of vibrancy and growth. Twenty years later, says Joan Roca, Managing Partner of Roca Junyent, the city is hoping to undergo a similar reinvigoration.
As with the rest of Spain, Barcelona has been hit hard by the recession, although Catalonia has slowly started to stabilise, says Roca.
The region’s GDP, according to the Spanish Statistics Institute, fell by one percent in 2012 compared to the national average of 1.4 percent. The margin may sound small, he adds, but it is encouraging and the priority now is encouraging the recovery.
Roca says the goals are to promote business in the city.
“The situation in Barcelona is better than a year ago, and the city and wider Catalonian region are now looking to enter a new economic reality with fresh business ideas.”
As an indication of the entrepreneurial spirit, the Spanish Statistics Institute claims that per capita GDP in Cataluña is around 20 percent higher than the national average (€27,248 compared to €22,772).
This gap is thanks as well to high-profit industries and Roca points to sectors such as biotech, IT and technology, which have grown and even created local business hubs.
For example, the Barcelona Science Park near the University is a haven for biotech and medical innovators.
The Mediterranean Technology Park in Castelldefels, meanwhile, is a centre for high-tech and digital companies.
There is also the Zona Franca industrial district, which is where a number of manufacturing companies are, including Nissan, and these parks benefit from local Government support as well as cheap leases and strong technology infrastructure.
The downside, however, is that regional tax rates remain higher than other regions.
Personal income tax, for instance, ranges from 15 to 45 percent while there is also a personal asset tax of 15 percent on purchases.
Corporate income tax ranges from 25 percent for small and medium enterprises and up to 30 percent for larger companies.
Other liabilities include property tax, construction tax, installation tax, building work tax and a varying value added tax (running from four to 16 percent).
“The tax pressure is much stronger in Cataluña than in other places,” Roca says.
“It can be up to five percent more than other Spanish regions and that is still a hindrance for some entrepreneurs.”
While the tax rates can be a factor for investment, the comparative strength of Barcelona combined with the tax burden is creating political tension.
There have been recent protests over things such as toll roads, personal tax contributions and the general political climate, he explains.
“While Catalonia remains a fiercely proud region, the on-going drive from regional autonomy to independence has started to gain more traction.”
Tax and political issues are, of course, nothing new in Barcelona and Roca remains optimistic for the future. Barcelona remains one of Europe’s critical ports with container traffic keeping steady and there is also the thriving automotive sector – thanks to the likes of Nissan and Seat-VW – while tourism and other traditional industries remain robust.
“Barcelona must preserve its current industrial output but the city also has an entrepreneurial character and we’re starting to see that come back,” Roca emphasises.
“There are now lots of new people looking at new business ideas, such as University spin-offs or financial restructuring firms, and that is encouraging.”
Among the recent signs were Nissan’s confirmation in February that the Barcelona plant will construct its new saloon car from next year, providing 1,000 additional jobs and Germany-based Union Investment buying the landmark Barceló Raval hotel for €37m.
As the motor and real estate industries have been among the worst hit in the recession, says Roca, both are indications that confidence is finally growing.
Barcelona está intentando atraer nuevos inversores y empresarios. Sin embargo, los retos continúan si el objetivo es establecer una nueva era de crecimiento económico, dice Joan Roca de Roca Junyent. La situación en Barcelona es mejor que hace un año, y Cataluña está buscando entrar en una nueva realidad económica con innovadoras ideas de negocios.