Spain’s economic growth has made great leaps in the past decade. So much so that it is The major advanced economy is set to become the world’s fastest growing this year. The Spanish economy is on track to expand at three times the pace of the eurozone as a whole – and even surpass US growth rates in the process.
This economic boom is due to tourism, immigration, foreign investment and public spending. But as a co-founder of a successful scaling operation, I have my own theories about not only how and why our economy has made its strides in recent years, but also, more importantly, where we should go from here.
The booming tech startup scene
Access to talent in Spain is unparalleled across Europe. Although Spain invests less than the EU average in R&D (1.44% of Spain’s GDP versus the EU average of 2.27%), our universities are increasingly becoming centers of advanced research in areas such as intelligence Artificial intelligence, robotics, cybersecurity, and renewable energy. For example, the Barcelona Supercomputing Center of the Polytechnic University of Catalonia is a world leader in high-performance computing. Many universities are also actively involved in EU-funded research initiatives (such as Horizon Europe) and host incubators and accelerators that support entrepreneurial projects.
In addition to graduates, Spain is attracting a growing number of executives from across Europe and beyond to our technology scene. According to 2023 Startup Heatmap ReportBarcelona has strengthened its position as the second most preferred location in the European Union for startup founders for the sixth year in a row. Tax incentives for foreigners and outside executives also pile up.
Start-up Law 2022 It has provided a more favorable legal and financial framework for establishing and scaling up start-ups in Spain. Its implementation not only created a more accessible environment for local entrepreneurs, but also attracted more foreign investment.
Spain’s ability to attract international investors is increasing day by day. There has been a growing realization that it is possible to build high-growth companies in Spain that can compete globally and raise capital from international funds. Today, alongside Abacum, companies like Cabify, Glovo, Job&Talent, Idealista and TravelPerk are all Spanish success stories in technology.
According to A Latest report from Dealroomthe total value of Spanish startups exceeded €100 billion in 2023, an increase of 14% from 2022. It also raised €2.2 billion across more than 850 funding rounds last year across different levels, from rounds of less than €15 million to Those exceeding 100 million euros. . Spain now ranks fourth in Europe in terms of early-stage investment, and this growth underscores its potential as an emerging force for European technological innovation.
Finally, Spain is a country with multiple business centers, which means it is not as highly centralized as other European countries. Although Barcelona may dominate the headlines, it’s not the only city growing in prominence as a tech hub. The likes of Madrid, Valencia, Malaga, Bilbao and Seville all contribute to Spain’s multi-layered economic appeal. In comparison, the likes of the UK and France have a very high concentration of talent in one city.
Continuing challenges
It would be naive to just wax lyrical about Spain’s economic prowess without confronting some local realities. It is true that GDP growth may be world-leading, but our collective economic influence is unmatched.
For example, Spain’s current GDP per capita is a big problem. Currently, and worryingly, it is not only below the EU average, but also below pre-Covid-19 and pre-major financial crisis levels in Spain. Per capita disposable income is still really lagging behind where it should be relative to overall GDP. This means that at the individual level, Spaniards are becoming poorer. The recent floods in Valencia and southern Spain have exacerbated this problem due to the scale of the disaster.
Productivity levels have also been suboptimal for many years, and we currently have the highest youth unemployment rate in Europe. Although tourism has been an economic boon for Spain, some would argue that it creates more problems than it solves at present. It skews the housing market as expatriates and foreign buyers purchase properties in urban areas, making it difficult for locals to get a foot on the ladder.
Although it may not necessarily be a silver bullet, doubling the growth potential of Spanish tech startups could go some way to improving many of Spain’s economic imbalances.
Startup law It was a step in the right direction, but we must go further. Nationally, we would be much better off if we had more incentives for startups and international companies to set up shop here. More coherent regulation of stock options, enhanced incentives to start a company, and lower taxes for entrepreneurs. Spain must also work to increase investment in research and development as a proportion of GDP. These are just some of the tools the government can use to make entrepreneurship a more attractive proposition.
If Spain truly wants to become the economic jewel in Europe’s crown, we must be bolder and more courageous and actively encourage entrepreneurial endeavors in a drive toward greater innovation, healthier job supply, and more sustainable growth.
More must-read comments posted by him luck:
The opinions expressed in Fortune.com reviews are solely those of their authors and do not necessarily reflect the opinions or beliefs luck.
