As far as there was major business news in Spain during the first month of 2022, headlines were about two contradictory things: massive success in the Spanish unicorn scene and the messy distribution of European stimulus funds. While the first signals the country’s tremendous potential, the second warns of possible missed opportunities.
The Spanish unicorn craze, with nine startups valued at more than €1 billion so far this year and another 20 expected to cross that threshold by the end of 2022, is giving the country notoriety beyond stereotypes like paella and beach hotels. Spanish startups created 6000 new jobs in 2020 — impressive growth considering it came in the midst of a global pandemic — and the year 2021 ended with cumulative investment in tech companies surpassing €4 billion.
But for these kinds of opportunities to spread far and wide, businesses still count on a little help — or at least hope the Spanish government is willing to get out of the way. EU Next Generation funds, which Spain is eligible to receive up to €140 billion worth by 2026, are thus far slow to arrive and difficult to access. Murky bureaucracy, threats from Brussels to hold back money and calls for more transparency mean the funds, meant to foster innovation for small and medium sized businesses that represent more than 98 percent of all businesses on the peninsula, risk going to waste.
A full 94 percent of all business entities registered in Spain are considered micro businesses, meaning they have between 1 to 9 employees. These businesses create a stunning 39 percent of total employment in the country. It therefore made sense that once the EUNextGen program was announced and European regional development funds were activated, money earmarked for SMBs in particular. But thus far the conditions that were set on accessing these funds look designed to have minimum — not maximum — impact. In The Digital Toolkit for example the current requirement is to have at least €100,000 in yearly turnover and between 10 to 49 employees. Businesses this size make up just 5 percent of all business in Spain, so most SMBs and most workers will not benefit with a single euro.
In fact, the conditions are sufficiently discouraging that a large percentage of the public eligible for these funds will not even try to access them, since it is long believed — not without reason — that most EU money ends up in the hands of big businesses with the power to influence the rules set for grant proposals through lobbying.
Tech Startups, EU Next Generation Funds and the push to digitally transform Spanish SMBs represent the economy of the future, but for these initiatives to succeed, Spain needs a government that is entrepreneur-friendly. While this would deviate from recent Spanish history of harming SMBs and innovation with bureaucracy, all hope is not lost — yet.
Spanish law makers are busy preparing a pro-startup legislation, having recently unveiled a big and bold transformation plan with the headline goal, to turn Spain into “Espana Nacion Emprendedora” by 2030. This is followed by the introduction of forthcoming Startup Act — a nationwide entrepreneurial economic transformation with goals to increase growth in startup investments; attract and retain talent; promote scalability; and inject innovation into the public sector so it can bolster and support Spain’s digital development. Done right, this could be one of Spain’s greatest economic milestones in recent history.
Currently, Barcelonians have done plenty in showing the world that their entrepreneurial spirit, fresh ideas and courage is setting the conditions for a wider culture of innovation. City hall is running projects to welcome international talent and the global venture capital is pouring in resources aspiring for Barcelona to become the new tech and remote work capital of Europe. Other big cities like Madrid, Valencia and Malaga are also attracting attention.
But we can still do better. And we don’t need to wait for the Spanish government to figure this out for us.
Challenges exist to foster evolution. Innovation does not appear through magic or materialize on its own. Innovation is actually manifested through new ways of thinking, doing and being. B2B collaboration and conscious networking, learning from one another, listening and sharing knowledge, can help multiply success. It is also a way to enjoy our professional journeys that much more. The success of a few unicorns shows what is possible, but prosperity can — and should — be a shared experience. As the famous Spanish saying goes: «Si quieres ir rápido camina solo, si quieres llegar lejos ve acompañado”.
Managing Director I Company Culture I Virtual and Network Leadership I Digital Transformation I Hybrid Workspace. I work with professionals who go beyond to grow themselves and others.
