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Index 10 Introduction 14 Executive summaryPublished by:Barcelona City CouncilArea of Economy, Enterprise and EmploymentLlacuna 162, 08018 Barcelona 20 Quantitative analysis www.bcn.cat/barcelonabusinessStudy produced by: 34 Qualitative analysis Research team:Esteve Mogas and Jordi Pascual (ESADE)With the support of Janina Pellegrini and Begoña Gómez (Observatory of Spanish Multinational Companies, OEME)Academic supervision:Pere Puig, Professor in the Department of Economics at ESADE 50 Recommendations Xavier Mendoza, Associate Professor in the Business Policy Department at ESADE and Director of the OEMEWritten by:Esteve Mogas, Jordi Pascual and Xavier MendozaTranslation:Chris Lloyd 54 Appendix: Study methodologyCoordination:Area of Economy, Enterprise and Employment 60Design and layout:Berta Hernández Bibliography Printed by: Gam DigitalLegal Deposit: 60B-15993-2012April 2012 Acknowledgements
6 FOREIGN INVESTMENT IN THE BARCELONA AREA 7We in the municipal government firmly believe that Securing new activity from outside and retaining existing Barcelona and its surrounding area have traditionally The city has to enhance its ability to attract talent andBarcelona generates confidence. Above and beyond its investment will help us overcome the crisis and create been an attractive setting for foreign investment. Since the best managers and professionals, who are, in short,quality of life as a factor in attracting professionals and new opportunities. One of the key priorities for Barcelona the late nineteenth century, numerous foreign-owned ultimately responsible for improving the productivity ofcompanies from around the world, it is a city that has the City Council is economic recovery and job creation. companies chose our region to set up their new facto- their companies, and foreign entrepreneurs who gener-right environment for innovation and creativity as well To achieve this, it is essential that our city becomes an ries. This era is outstanding for the industrial investment ate wealth. We need to prioritise efforts and focus on theas major factors that afford it exceptional added value, international benchmark in strategic and future areas, from French, German, British, Swiss and Belgian compa- sectors with the greatest scope and potential.such as the presence of universities, leading business projecting a powerful image as a global metropolis and nies, and later on, American companies. These pioneer-schools, top level research centres and highly dynamic favouring foreign investment and the attraction of eco- ing firms, some of which are still active and here among This study is part of the Barcelona Growth initiative.business clusters. nomic activity to the full. us today, contributed to Barcelona becoming known as Led by the City Council but based on the joint work of the Catalan Manchester thanks to its industrial activity. the leading economic and social agents in the city, theAs the economic capital of the Mediterranean, it is also initiative aims to guarantee the conditions for economicone of the leading metropolitan areas in Europe. Its di- Xavier Trias This trend has been changing for some decades now, at growth by seeking practical measures in order to resumeverse productive structure features strategic sectors with Mayor of Barcelona the same pace as the very productive structure of the growth and the creation of employment and wealth.a high added value and great potential for future growth, city. These days, large-scale industrial complexes havesuch as information and communication technologies, given way to investment geared primarily towards the Barcelona has to adopt a proactive attitude to becomebiotechnology, energy, media, design and higher educa- advanced tertiary sector and new emerging sectors with the true Mediterranean business capital, one that pro-tion, to name just a few. high rates of innovation and strong growth. motes investment and economic activity.Barcelona has also made a commitment to improving However, the changes in the world scenario, with theand developing its digital infrastructures and applying appearance of new emerging markets and the present Sònia Recasensurban innovation technology and economy, to more economic and financial crisis being experienced by some Deputy Mayor for Economy, Enterprise and Employmentsustainable and efficient city management, to improving developed markets, are affecting international invest-people’s quality of life and to making the city more com- ment flows. In light of these new challenges, we need topetitive for its businesses. The aim is to make Barcelona apply new focuses and develop policies to continue botha benchmark as a smart city and the ideal city in which to secure new activity from outside and to ensure theto start up and develop a business. loyalty of existing activity.This way, we will consolidate and enhance our prestig- And this is precisely one of the aims of this study: to offerious international brand and image, which is a huge guidelines and useful recommendations for designingasset in attracting investment and securing new busi- the specific actions to promote, attract and retain inter-nesses. Our city has traditionally been the gateway for national investment. Of the over 5,100 foreign-ownedforeign investment, and today Barcelona is one of the companies in Catalonia, the majority are concentratedworld’s ten leading metropolises for inward foreign in the Barcelona area. This is why we want this numberinvestment projects and one of the top ten most attrac- both to be consolidated through promoting reinvest-tive cities globally for locating or starting up a business, ment and the creation of new business lines and to beaccording to the recent Global Cities Investment Monitor increased through securing new companies.by the KPMG firm of consultants.
8 FOREIGN INVESTMENT IN THE BARCELONA AREA 9I have the great pleasure of introducing the study en- I would like to highlight a particularly relevant feature oftitled Foreign Investment in the Barcelona Area, which this study. Its conclusions are founded not only on thehas been drafted by a team of researchers from ESADE analysis of the most recent statistical data, but also, andand commissioned by the Area of Economy, Enterprise especially, on extensive field work that has enabled theand Employment. authors to receive the highly valuable contributions of a far-ranging group of managers from foreign companiesThe starting point of the study is the realisation that we established in the Barcelona area and of experts directlyare facing a new international scenario with significant connected with advice on, and securing of foreign invest-implications for companies and countries worldwide. ment operations in this region.The fragile state of the most developed economies, The experts and managers consulted in the study agreedthe result of the global financial crisis that burst in the in stressing the potential of the Barcelona area to con-summer of 2007 and the subsequent crisis in the euro- tinue to attract foreign investment over the coming years.zone, is in strong contrast with the rise of the emerging My wish and that of the authors is for this study to be aeconomies. We are witnessing a profound change in the useful contribution to all the public and private agentsworld economy and geopolitics, the direct consequence involved in turning this potential into a reality.of the economic globalisation processes started over twodecades ago. The world’s economic centre of gravity issteadily shifting from the developed countries towards Alfons Sauquetthe large emerging economies. A very significant piece Dean of ESADE Business Schoolof data with regard to this is that 2010 saw the first timethat the developing countries attracted more than 50%of foreign direct investment (FDI) flows worldwide.This new international scenario poses a major challengeto the developed countries, who are now forced to recon-sider a number of important issues, including the policiesfor attracting and securing foreign investment.In this sense, the aims of this study are to present thecurrent state of foreign investment in the Barcelonaarea and Catalonia, identify the challenges and princi-pal future opportunities as regards attracting foreigninvestment, and draw up a series of recommendationsregarding the policies for attracting and securing foreigninvestment.
12 FOREIGN INVESTMENT IN THE BARCELONA AREA 13Objectives Structure Definitions and scopeCatalonia, and the Barcelona area in particular, boasts The report is organised in four main sections: The usual name of foreign direct investment or FDI is With regard to its geographical scope, the study focusesa long tradition of attracting foreign investment, which used to include the following phenomena: on foreign direct investment in the Barcelona area andhas become a major driving force both in terms of the By way of introduction, the first section presents the Catalonia. The analysis of quantitative data looks at thegrowth of the Catalan economy and of the improvement objectives and scope of the study and sets out the struc- Investment flows whereby a foreign investor acquires at evolution of FDI in the world, in Spain and in Catalonia.of its competitiveness. For this reason, it is of interest to ture of the report. least 10% of the capital of a local company (it is consid- As regards the qualitative study, this has been focusedanalyse the evolution of this type of investment regularly, ered that an ability to influence the company manage- exclusively on the Barcelona metropolitan area, takingincluding the main obstacles and motivators that affect The second section presents the results of the quanti- ment is ensured if the share is less than 50% and an this to be the city of Barcelona and its catchment area,these flows. tative analysis, describing the main figures relating to ability to control if the share is more than 50%). comprising seven counties (Alt Penedès, Baix Llobregat, foreign direct investment (FDI) and its evolution over Barcelonès, Garraf, Maresme, Vallès Occidental andThe main aim of this study is to draw some specific time. The decision was taken to describe the situation of Investment flows whereby a foreign investor incorporates Vallès Oriental).conclusions regarding the present state of inward invest- FDI in the world and in Spain, to then go on to focus on new companies with a trading activity or carries out ament in Catalonia, especially the Barcelona area, and the Barcelona area. capital enlargement of its own subsidiaries.about the challenges and opportunities that are facedthrough analysis of the latest data and the evaluations The third section presents the results of the qualitative By contrast, this concept does not include loans betweenmade by the experts and entrepreneurs playing a central analysis, Grouped in eight large subject areas, it ana- the parent company and its subsidiaries or investment inrole. lyses the main conclusions drawn from the interaction property. with managers and experts linked with foreign directThe study seeks to look into the impact of the crisis on investment in Barcelona. It is usual to regard FDI in greenfield projects as the mostforeign direct investment (FDI) flows and into the foreign reliable indicator in estimating the impact of foreigncompanies established in the Barcelona area and Cata- In the fourth section, the research team draws up a investment on GDP in a given geographical area. Thelonia, and to identify future trends in terms of attracting series of recommendations based on the analysis of the reason is that mergers and acquisitions, in themselves,FDI. statistical data and the principal contributions gathered do not entail the automatic generation of additional eco- in the field work. nomic activity whereas a new production start-up does generate new activity in the region. The report is accompanied by an executive summary that seeks to summarise very succinctly the main con- For similar reasons, wherever possible, the FDI made clusions of the study conducted. through the so-called Entitats de Tinença de Valors Es- trangers (holding companies) or ETVE, has been itemised For readers who are interested in the more technical as it does not necessarily generate an increase in the aspects, the details of the methodological aspects gross domestic product of the regions in which these referring to the conducting of the study are offered in an companies are registered.1 Despite their great impor- appendix. tance in terms of volume of operations, their effects can be different from those of other types of investment, so we have chosen to show them disaggregated. 1. Spain has a very favourable tax system for foreign holding companies (entitats de tinença de valors estrangers or ETVE), seen as international groups that wish to have a basis for managing their interests in a number of countries. The only requirement is to incorporate a company in Spain and bring in the securities of foreign interests (with a minimum share of 5%). This tax system enables non- resident companies and individuals not to pay tax on dividends received from non-resident interests.
16 FOREIGN INVESTMENT IN THE BARCELONA AREA 17Catalonia, and the Barcelona area in particular, boasts From the quantitative analysis, conducted on the basis of In terms of share, Spain lost two percentage points from The qualitative part of the study included conductinga long tradition of attracting foreign investment, which various statistical sources on FDI, the following aspects its maximum figure of 4% of inward FDI worldwide in in-depth interviews and focus groups with experts andhas become a major driving force both in terms of the stand out: 2008. managers of foreign companies established in thegrowth of the Catalan economy and of the improvement Barcelona area and the rest of Catalonia. A survey wasof its competitiveness. The global financial crisis that • The loss of share in world FDI flows is even more ac- also conducted among former students of the ESADEbegan in 2007 has both contributed to highlighting and 1. centuated when we consider the European Union as a business school who work outside Spain. Although thecatalysed a new international scenario, characterised After the collapse witnessed in 2009, gross inward FDI in whole, which has lost four percentage points in the last sample is not significant, the results obtained are in lineby the increasingly central role of the so-called emerging Catalonia revived strongly in 2010 to reach 4.52 billion four years. with the rest of the analysis. The principal conclusions ofcountries in the world economy and geopolitics. euros, the highest level for four years, representing 19% the qualitative part are summarised below. of inward FDI in Spain.This new international scenario has profound implica- 4.tions with regard to the ability to attract foreign direct • Despite this, we should remember that in recent After three consecutive years of falls, the total inward 7.investment (FDI) into the Barcelona area and Catalonia. years, in the 2007-2009 three-year period, the proportion FDI volume worldwide in 2010 rose by 5% compared Foreign direct investment (FDI) in the Barcelona area will,The aim of this study is to analyse the recent evolution of productive FDI aimed at Catalonia within Spain fell with the previous year, although this is still far from the in the short term, continue to come primarily from theand present situation of foreign investment in Catalonia, considerably, standing at figures of less than or slightly level reached in 2007, before the global financial crisis. developed European countries and the United States ofdiscover the challenges and opportunities perceived by above 10%, far from those of the 2000-2006 period. We should stress that flows of investment aimed at the America. The emerging countries will still continue to beforeign companies established in Catalonia and identify developing economies were the principal driving force, inward FDI countries rather than outward FDI countriesemerging future trends and their impact on policies for with a 10% increase. with regard to investment flows aimed at the developedsecuring FDI. 2. countries. Of note is the fact that since 2006, the number of foreignIn order to achieve this aim, extensive field work was companies established in the Barcelona area has grown 5. • France, Germany, the United Kingdom and the Beneluxconducted using qualitative techniques, such as focus by 13%, numbering 3,381 in 2010. By type of FDI, it has been seen worldwide in the last four countries will act as principal driving forces of FDI into thegroups and individual interviews with managers from years that newly established investments (greenfield) or Barcelona area.foreign companies and local experts in inward FDI into • With regard to countries of immediate origin of FDI in the extension of existing investments have gained in rela-the Barcelona area. This qualitative analysis was comple- Catalonia, the Netherlands, France and Germany, in this tive weight and reached 70% of total FDI flows in 2010. In • From our country’s point of view, the emerging countriesmented by quantitative analysis of the various statistical order, were the main countries providing FDI into Catalo- turn, cross-border mergers and acquisitions underwent a are characterised globally by their nature as recipients ofsources and databases on FDI. The principal conclusions nia, making up half the total investments received in the sharp decrease in 2010 to a third of the value reached in FDI rather than senders. Despite this, it is felt necessarydrawn are then summarised. 2006-2010 period. 2007, which reflects the close link that these operations to put in place promotion and positioning policies of the have with the economic cycle. Sectorial analysis of FDI in Barcelona area straight away aimed at companies in the • By sector, services accounted for 53% of inward for- the world shows a recovery of the manufacturing sector emerging countries with strong international expansion, eign investment in Catalonia in 2010. This compares with in 2010 compared with the previous year (+23%) with an knowing that securing investment from these companies 41% for industry and manufacturing, which have been increase in its relative weight in total FDI of up to 48%. is a medium- and long-term objective. losing ground since 2007 as inward FDI sectors. 6. 8. 3. The consideration of the negative evolution of inward We are facing a profound change in the rules for sourcing The evolution of inward FDI in Catalonia in the 2007- FDI in the European Union in recent years, a result not FDI as a result of two main facts: on a macro scale, it is 2010 period was clearly positive if compared with the just of the less favourable economic climate but also of aimed mainly at the emerging countries, and on a micro evolution of inward FDI in Spain and the European Union structural problems of competitiveness, together with the scale the preference for locations in “hub cities” is com- (EU) in the same years. strong dynamism of FDI flows into the emerging coun- ing to the fore. tries, underlines the structural change of scenario being • Even though inward FDI in Spain in 2010 showed a faced by the developed countries in terms of securing strong recovery, with 169% growth compared with the FDI in their economies. We are facing a change that will collapse it underwent in 2009, in absolute terms, it did call for new focuses and new policies. not reach one-third of the maximum achieved in 2008.
18 FOREIGN INVESTMENT IN THE BARCELONA AREA 19• Besides highlighting the change in destination of tan city that Barcelona has and the potential afforded it The entrepreneurial spirit and credibility of the local man-foreign direct investment, which is aimed mainly at the by its geographical location from a geo-economic point of agement teams for their respective headquarters are theemerging countries, also significant is the loss of the view. key factors in bringing about the creation of these centres.OECD countries, led by Europe, as a destination for FDI.This loss of influence and attraction is even more accen- In terms of human capital, the Barcelona area is seen astuated with regard to the southern European countries. both a provider, in terms of the existence of local talent, 12. and as a magnet, in terms of the ability to attract outside The major force and the great value of the Barcelona• The preference is also evident of large companies talent. brand and the need to reinforce it are noted. The optionwanting to locate their subsidiaries in cities with a strong of positioning Barcelona as the “Mediterranean busi-and dynamic economic fabric, connected to the world ness capital” has the majority support of the experts andinnovation networks and with good communications 10. managers consulted.infrastructures, the so-called “hub cities” with their met- Opinion coincides in the idea of focusing effort on promot-ropolitan areas. As will be seen later, this trend offers the ing the services sector as a great economic asset of theBarcelona area significant opportunities that it must be future of the Barcelona area, together with certain indus-able to take advantage of. trial sectors of high technological content. The experts and managers consulted identified six sectors9. on which they recommend concentrating efforts in secur-The principal attractions of the Barcelona area can be ing foreign investment:summed up in the fact that besides fulfilling the objec-tive parameters required for attracting FDI, it also enjoys - the logistics sectora highly positive perception in terms of the qualitative - the information and communication technologies (ICT)parameters used in assessing investments. sector - the biotechnology sector• The objective parameters most highly valued by foreign - the sectors linked to creativity and culturecompanies already established here, in the opinion of - the tourism sectorthe experts and managers consulted, were the attraction - the talent-intensive services for people sectorof the market and the degree of industrial development,the access to talent and the level of infrastructures. 11.• Although there is general satisfaction with the level The growing trend among large multinational corpora-of infrastructures finally attained in the Barcelona area, tions to create global specialist centres and sharedthree especially important shortcomings are noted for service centres (SSC) is seen as a major opportunity forthe economic enhancement of the Barcelona area: the attracting foreign investment to the Barcelona area.Mediterranean rail axis, the intermodal connections with The creation of global specialist centres is the result ofthe Port of Barcelona as backbone, and the still scant the strategy of large corporations to optimise the geo-intercontinental connections with Barcelona airport. graphical locations of the various business activities in terms of their business, prioritising the functional and/orHowever, the good image and operation achieved in product line specialisation.macro-infrastructures has to have its counterpart on amicro scale in the respective business parks and indus- A parallel development is the creation of corporatetrial estates. shared service centres (SSC) that centralise the provision of services (for example, information systems, purchas-• Highlighted in the qualitative parameters are the quality ing, administration) that were previously provided locallyof life, the characteristics of an attractive and cosmopoli- in each subsidiary.
22 FOREIGN INVESTMENT IN THE BARCELONA AREA 231. FDI in the worldInward foreign direct investment (FDI) flows world- The recovery of FDI compares with world GDP, whichwide in 2010 totalled 1,244 billion dollars, an increase returned in 2010 to a similar level of growth as 2007.of 5% compared with the previous year, after threeconsecutive years of decrease. 2Inward foreign direct investment (FDI) flows worldwide in Percentage evolution of GDP of FDI in the2010 totalled 1,244 billion dollars according to the World world, 2007-2010Investment Report 2011, published by the UNCTAD(United Nations Conference on Trade and Development), 40% 34.8%an increase of 5% compared with the previous year. Al- 30%though this figure represents a recovery after the succes- 20%sive falls experienced in 2008 and 2009, world FDI is still 4.9% 10%far from the volume of 2007, which was a historical high: 3.9% 1.6% 3.6% 0% -2.0% -10% -11.5%1 -20% -32.1%World foreign direct investment: absolute -30%flows and annual variations, 2007-2010 -40% 2007 2008 2009 2010 % annual variation FDI $1,971 % annual variation GDP $2,000 35% 40.0% $1,744 $1,800 30.0% $1,600 Sources: UNCTAD. World Investment Report 2011; United Nations World 20.0% $1,400 $1,244 $1,185 Economic Situation and Prospects 2011 $1,200 10.0% 5% $1,000 0.0% $800 -12% -10.0% $600 $400 -20.0% After a year of weak and uneven recovery, global eco- -32% $200 -30.0% nomic growth slowed down in mid-2010. According to the $0 -40.0% United Nations World Economic Situation and Prospects 2007 2008 2009 2010 2011, the slowdown is expected to continue in 2011 World FDI (billions USD) and 2012. The forecast is surrounded by a great deal of % annual variation uncertainty and serious risks of worsening.Source: UNCTAD. World Investment Report 2011 The United Nations base growth forecast for world GDP stands at 3.1% for 2011 and 3.5% for 2012, below the growth rates prior to the crisis. According to the UNCTAD, world FDI flows in 2011 will be between 1,300 and 1,500 billion dollars, and will rise in 2012 to around 1,600-2,000 billion dollars.
24 FOREIGN INVESTMENT IN THE BARCELONA AREA 25FDI flows in the developing economies have recovered Greenfield investments have continued to fall since By sector, the manufacturing sector has experiencedto stand at over 50% of all worldwide FDI. 2008 to almost half. Mergers and acquisitions have a +23% recovery compared with 2010 and has gained dropped even more, falling to a third of the value relative weight in total FDI, reaching 48%.FDI flows in the developed economies (Europe, North reached in 2007.America, Japan, Israel, Bermuda, Australia and New With regard to the productive sectors of world FDI afterZealand) held steady in 2010 at practically the same Greenfield investments reached their highest point in 2008, the manufacturing sector stands out, having seenlevel as the previous year. Elsewhere, flows in the devel- 2008, subsequently falling dramatically the following a +23% recovery. Apart from this, the services sectoroping economies rallied considerably and grew by 10% to year and even more in 2010. The volume of greenfield (-14%) and the primary sector (-30%) have decreasedreach over 50% of inward FDI world-wide for the first time investments fell by 655 billion dollars between 2008 and remarkably.since 2007. 2010, some 55%. The sectorial distribution of FDI in 2010 is clearly based For their part, mergers and acquisitions underwent an on manufacturing (48%), while the rest is divided similarly3 even more dramatic fall in the 2007-2009 period to between services (29%) and the primary sector (22%).World foreign direct investment: annual the point in 2009 when they stood at a quarter of theinward flows by type of economy, 2007-2010 volume reached two years earlier. By contrast, a change in the trend was seen in 2010 with a significant recovery compared with the previous year (+36%), although the $2,000 volume (339 billion dollars) continues to be very far from $1,800 $1,600 $664 that of 2007 (1,023 billion dollars). $1,400 $779 $1,200 $1,000 $582 $642 4 $800 $600 $1,307 Greenfield investments and mergers and $965 $400 $603 acquisitions from worldwide foreign direct $602 $200 investment (billions USD), 2007-2010 $0 2007 2008 2009 2010 developing economies (billions USD) $2,500 developed economies (billions USD) $2,000Source: UNCTAD. World Investment Report 2011 $1,500 $940 $1,462 $1,000 $952 $807After a sharp collapse of world FDI in 2009, the devel- $500 $1.023 $707oping economies have grown higher than the world $0 $250 $339average, which has offset the stagnation of FDI in the 2007 2008 2009 2010developed economies, which emerged from two consecu-tive years of severe decline (-26% in 2008 and -38% greenfield investments mergers and acquisitionsin 2009). Source: UNCTAD. World Investment Report 2011
26 FOREIGN INVESTMENT IN THE BARCELONA AREA 272. Inward FDIin SpainInward FDI in Spain experienced an upturn in 2010 Spain’s share in worldwide inward FDI fell by two per- The fall in relative weight of the European Union, With regard to the principal outward FDI countries intodespite standing at one-third of the maximum reached centage points compared with 2008. which was dramatic in 2008, continued a slow decline Spain, the following graph shows the 10 main countriesin 2008. to reach 24% of the share of inward FDI in the world in whose companies made the greatest direct investment Spain’s share in inward FDI flows in the world reached 2010. in Spain in the 2006-2010 period, arranged as a percent-According to the UNCTAD World Investment Report 2011, 2% in 2010, leaving it in 16th place among receiving age by order of importance.gross inward FDI in Spain was 24.5 billion dollars in countries. The EU’s share as a recipient of FDI flows has fallen by2010, representing an increase of 168% compared with between 15 and 20 percentage points since 2008. Inthe previous year and a marked change in trend com- In 2010, the United States recovered the worldwide 2010, it recorded a 12% fall in FDI, motivated especially 8pared with the sharp decline it underwent in 2009.2 inward FDI share that it had in 2008. As regards the by the economies of the Netherlands, the United Share of the principal outward FDI countries emerging countries, China (including Hong Kong), Brazil Kingdom and Italy. into Spain, 2006-2010 (in %) and Russia increased their share in worldwide FDI in re-5 cent years. Of note is the relative loss in weight of India’sEvolution of foreign direct investment in share, despite the FDI inflow having risen in absolute 7 18%the world, in the European Union and in Spain value. variation in absolute values of inward FDI in 16% 16% 16%(billions USD), 2007-2010 the European Union, 2009- 2010 (billions USD) 14% 12% 11% 10% 9% 6 10% $2,000 8% World ranking of the principal FDI recipient $-51 $-31 $-11 $9 $29 $49 7% $1,800 6% 6% countries, 2010 (in % total world FDI) 5% $1,600 $38 Belgium 4% 3% 3% $1,400 $15 Spain 2% $9 Germany 0% $1,200 -$10 Italy ly m es y o s ce g da s an nd te ur ic Ita $1,000 do at an na ex ira bo rm la St ng Fr Ca M $-25 United Kingdom er Em 0.0% 5.0% 10.0% 15.0% 20.0% m Ge Ki d th xe $800 te ab d Ne Lu i te Un $-42 European Union Ar i Un $600 18.4% United States $-51 Netherlands $400 8.5% China $200 5.5% Hong Kong Source: Own production based on Datainvex, Ministry for Industry, $0 Spain 5.0% Belgium Energy and Tourism 2007 2008 2009 2010 European Union 3.9% Brazil Source: Own production based on UNCTAD. World Investment Report World Germany 3.7% 2011 It should be highlighted that Italy and the United King- 3.7% United Kingdom dom provided a third of the total inward FDI in Spain, and 3.3% RussiaFont: UNCTAD. World Investment Report 2011 3.1% Singapore that together with the United States and Germany, they 2.7% France In this context, Spain is far from the share it had in 2008, accounted for half the total. 2.6% Australia when with almost 77 billion dollars, it reached 4.4% ofSpain’s recovery compares with the continued fall in FDI 2.5% Virgin Islands worldwide inward FDI. Since then, it has lost relative With regard to the sectorial distribution of inward FDI inin the European Union since 2008 (-43%), 2009 (-29%) 2.3% Saudi Arabia weight in the world share of FDI. However, the principal Spain, 2010 shows a clear orientation towards the manu- 2.1% Irelandand 2010 (-12%). On a world scale, the collapse in FDI FDI recipients in the European Union have also lost facturing and goods-production sector, with services to a 2.0% Indiahas been less pronounced than in the EU: -12% (2008), ground in their world share, with the exception of Ireland lesser extent. 2.0% Spain-32% (2009) and +5% (2010). and Germany. Specifically, with 59% of the inward FDI in 2010, industry led services (36%) in inflows of foreign investment in Source: UNCTAD. World Investment Report 2011 Spain.2. In order to be able to make a homogeneous comparison of trends worldwide, Despite this, investment in absolute terms in industry fellin the European Union and in Spain, data provided by UNCTAD have been used.However, it should be noted that there are significant disparities with the data by half compared with 2007 levels. By contrast, servicesprovided by the Spanish Ministry for Industry, Energy and Tourism in the Datain- stand at the same level, despite the strong increase invex database, which are regularly updated up to two years after the end date of aspecific period. 2008.
28 FOREIGN INVESTMENT IN THE BARCELONA AREA 293. Inward FDI inCataloniaAfter the collapse experienced in 2009, gross inward 10 The strong increase in 2010 of gross foreign investment Gross productive foreign investment in Catalonia in theFDI in Catalonia saw a strong upturn. Productive in- Evolution of Catalonia’s share in inward FDI in excluding ETVEs (holding companies) in Catalonia (180%) first semester of 2011 stood at 937 million euros, anvestment represented 87% of total inward FDI. Spain, 2006-2010 (in %) compares with the contraction of this indicator in Spain increase of 11% compared with the same period in 2010. (-5%).Gross inward FDI in Catalonia stood at 4.52 billion euros, With regard to geographical areas, the OECD is the most 22%the highest level in the last five years, representing 19% 20% important source (98%) of inward FDI in Catalonia. The 19%of inward FDI in Spain. 12 EU-27 represented 96% of inward productive FDI in 2010. Distribution of gross inward FDI in Catalonia, 15% 2009–2010 (in millions)9 10% 11% 14 10%Evolution of gross inward FDI in Catalonia, Geographic origin of gross inward €5,0002007-2010 (in millions) 7% €4,520 productive FDI in Catalonia – 2010 5% €4,000 €3,952 €3,000 0% €4,000 €5,000 2006 2007 2008 2009 2010 €3,807 €4,520 €2,000 €1,874 €3,500 €4,500 % Cat of Spain €1,410 €4,000 €3,811 €3,000 €1,000 €3,500 €568 €2,500 €3,128 €464 €3,000 €2,764 Source: Foreign Investments Register, Ministry for Industry, Energy and €2,000 €0 €2,500 Tourism and Invest in Catalonia - ACC1Ó €1,874 2009 2010 €1,500 €2,000 €1,500 Total gross investment €1,000 €1,000 Gross investment excluding ETVEs €500 €145 €500 In 2010, total gross productive foreign investment in Gross investment in ETVEs €0 €0 Catalonia (that is, discounting flows received by ETVEs) 2010 2006 2007 2008 2009 2010 was 3,952 billion euros (87% of the total), which is the Source: Foreign Investments Register, Ministry for Industry, Energy and EU-27 best recorded since this variable has been measured. Tourism and Invest in Catalonia - ACC1Ó rest of the worldSource: Foreign Investments Register, Ministry for Industry, Energy and Source: Foreign Investments Register, Ministry for Industry, Energy andTourism and Invest in Catalonia - ACC1Ó 11 13 Tourism and Invest in Catalonia - ACC1Ó Distribution of gross inward FDI in Catalonia, Distribution of gross inward FDI in Spain, 2010 (in % and absolute values in millions€) 2009–2010 (in millions)In the first semester of 2011, total inward FDI in Catalo- The Netherlands, France and the United Kingdom ac-nia stood at 1.144 billion euros, 30% more than the first counted for almost 80% of the inward productive FDI in €25,000 €23,415semester of 2010, a figure that would appear to confirm 2010. We should stress the high weight of the Nether-a change in trend. €20,000 lands, with nearly half the total, although it should be €568 €16,544 considered that many multinational companies use the €15,000Despite this, we should remember that in recent years, €12,249 €11,778 Netherlands as a springboard from which to invest in €11,637the proportion of productive FDI aimed at Catalonia €3,952 €10,000 EU countries owing to the favourable fiscal treatment itwithin Spain fell considerably, standing at figures of less offers foreign investors. €5,000 €4,295than or slightly above 10%, far from those of the 2000-2006 period, as can be seen in the following graph. gross investment excluding ETVEs €0 gross investment in ETVEs 2009 2010 total gross investment gross investment excluding ETVEs Source: Foreign Investments Register, Ministry for Industry, Energy and gross investment in ETVEs Tourism and Invest in Catalonia - ACC1Ó Source: Foreign Investments Register, Ministry for Industry, Energy and Tourism and Invest in Catalonia - ACC1Ó
30 FOREIGN INVESTMENT IN THE BARCELONA AREA 3115 As we mentioned earlier, the Netherlands stand out as Foreign companies play a very decisive role in the One important aspect that should be mentioned is thePrincipal source countries of inward an outward FDI country with a total of 22% of inward FDI Catalan economy. At the end of 2010, there was a total high concentration of foreign companies established inproductive FDI in Catalonia, 2010 in Catalonia in the 2006-2010 period. Together with Ger- of 3,381 foreign companies.3 The following shows their Catalonia compared with the total number of companies many and France, they account for half the total inward origin by country: established in Spain, a phenomenon that is particularly FDI in the same period. pronounced in the case of companies in which Japanese, 29 €2,000€ Italian, North American and French capital have an inter- 1,9 € €1,800 Netherlands As regards the sectorial type of inward FDI, services, with 18 est, as shown in the following table. €1,600 France 53% of the total FDI, led foreign investment inflows in Distribution of foreign companies in Catalonia €1,400 United Kingdom 2010 ahead of industry and manufacturing (41%). by country of origin, 2010 €1,200 United States Percentage of foreign companies in Catalonia Germany €1,000 by country of origin compared with the total Luxembourg €800 17 of those established in Spain, 2011 6 0 100 200 300 400 500 600 700 71 Portugal € €600 Switzerland Distribution by sector of inward productive 626 France 8 38 €400 Italy FDI in Catalonia, 2010 (in %) 0 € 572 Germany 4 28 20 Country % companieS established in € € €200 Andorra 2 366 United States 11 38 38 47 41 Catalonia out of the total in Spain € € € € € €0 346 Italy 2010 307 Netherlands 2% Japan 85.9% 245 United Kingdom 205 Bel-Lux Italy 67.1%Source: Foreign Investments Register, Ministry for Industry, Energy and 188 SwitzerlandTourism and Invest in Catalonia - ACC1Ó United States 63.0% 98 Japan 53% 41% 65 Denmark France 61.9% 49 Sweden agriculture, livestock and fisheries Austria 56.4%The following shows the 10 principal source countries of industry and manufacturing 48 Portugal 5% 48 Austria Switzerland 50.1%direct investment in Catalonia in the 2006-2010 period: construction services 25 Canada Hong Kong 50.0% 24 Ireland 17 Norway Canada 46.7%16 Source: Foreign Investments Register, Ministry for Industry, Energy and 17 Finland Germany 45.1%Share of the principal source countries of Tourism 135 Otherproductive FDI in Catalonia, 2006–2010 (in %) Belgium 44.3% Sweden 39.3% Source: Informa database - Invest in Catalonia - ACC1Ó. Includes com- 25% Luxembourg 35.8% panies with 50% or more of foreign capital ownership 22% Netherlands 34.7% 20% Denmark 33.2% 15% 14% 12% New Zealand 31.3% 10% 10% 9% 7% Ireland 29.4% 6% 5% 5% 3% United Kingdom 27.5% 2% 3. Just before this document was printed, on completion of the relevant 0% research, through the Invest in Catalonia agency, ACC1Ó published new Portugal 25.7% data on the number of foreign companies in Catalonia to which we refer. s y ce es m ly g o da l ga Norway 25.4% an nd ur ic Ita do an at na According to ACC1Ó, the number of foreign companies in Catalonia at ex tu bo rm la St ng Fr r Ca M er m Po Ge Ki d th the end of 2011 was 5,061, appreciably higher than the figure of 3,381 xe te Ne d Lu i te Un companies at the end of 2010 provided by the same agency. The causes i Un Source: Invest in Catalonia - ACC1Ó. Includes companies with 10% or of this difference will certainly call for future studies. In any event, we feel that this new information does not change the validity of the more of foreign capitalSource: Own production based on Datainvex, Ministry for Industry, conclusions of the study and clearly reinforces the recommendations made, especially those aimed at retaining and fostering the foreignEnergy and Tourism companies already established in the Barcelona area.
32 FOREIGN INVESTMENT IN THE BARCELONA AREA 33If we analyse the recent evolution of foreign companies Finally, we should mention the remarkable geographi- Based on the information from the Iberian Balanceestablished in Catalonia, we can see that in the 2006- cal concentration of foreign companies in the Barcelona Sheets Analysis System database (SABI), the research2010 period, the number rose by 381 (a 13% increase). It area, which leads the table with 92%. This is followed by team drew up its own database containing basic eco-is important, however, to underline that this net increase Girona and Tarragona, with 3.5% each, and Lleida bring- nomic information (ordinary revenue, number of employ-is the result of a fairly significant number of new compa- ing up the rear with a symbolic 1%. ees and gross profit) for the 2006-2009 period for a totalnies arriving and other companies leaving. of 2,754 foreign companies registered in Catalonia.4 The following conclusions can be gleaned from analysis of this information:19 20Variation in the number of foreign companies Distribution of foreign companies in Cataloniain Catalonia, 2006–2010 by province, 2009 1. Growth was seen in 2007 and 2008 in the three vari- ables considered, whereas in 2009 the economic crisis 4% 3% was strongly felt. -140 -80 -20 40 100 160 1% 118 Bel-Lux 109 Netherlands 92% 2. France 107 Total sales of these companies in 2009 was 14% less 105 United Kingdom Barcelona than in 2008 and very similar in absolute values to those 77 Switzerland -10 Italy Girona in 2007. Tarragona -13 Sweden Lleida -33 United States -50 Japan 3. -133 Germany Source: Own production based on the SABI database We should also mention that the earnings before interest, taxes, depreciation and amortization (or EBITDA) fell in 2009 by 13% and was very similar in absolute values toSource: Own production based on the Informa database 2006.First of all, we should highlight the fact that in this favour- 4.able evolution of the number of foreign companies, the After three years of growth in job creation by foreign com-ones that have undergone the greatest growth are those panies registered in Catalonia, 2009 recorded a 6% fallfrom Belgium-Luxembourg, the Netherlands, France, in total employment compared with the previous year.the United Kingdom and, to a more moderate extent,Switzerland.On the other hand, we should stress the significant fall inGerman companies (-133) during the 2006-2010 period.The number of companies from Japan, the United States,Sweden and Italy also underwent a negative evolution,although not as marked. 4. The information in the SABI database comes from the deposit of companies’ annual accounts in the Companies’ Registry, which explains the delay of nearly two years in being able to work with reliable aggregated data.
36 FOREIGN INVESTMENT IN THE BARCELONA AREA 37 1. Foreign direct investment in the Barcelona areaConducted using in-depth interviews and focus groupswith participating experts and managers, the qualitative and its origin The experts consulted discern differences in terms of the aspects most highly valued by companies in emerging Public grantspart of the study enables us to draw conclusions based countries for investing in a foreign country in comparison The experts and managers consulted said that publicon the majority opinions given with regard to a series of with those valued by companies from the developed grants for foreign investment, seen as a pure economicsubject areas linked to FDI in the Barcelona area. countries that are traditional sources of outward foreign subsidy, are slowly taking on a more subsidiary nature and investment. In this sense, access to technology and R&D have ceased to be a key deciding factor for companies.The subject areas put to the participants were the cur- support policies, together with the existence of somerent state and future forecasts for FDI in the Barcelona cultural-historical affinity with the target market, take on There is the perception among the experts consulted thatarea: where it is from; what the main attractions, weak- The experts and managers consulted in the qualitative very great significance in the decision-taking process of the policy of subsidies might have initial positive effectsnesses and obstacles are that have an impact on the study felt that investment will continue to come from the companies in emerging countries. but that in the medium and long term they produce moreattraction and securing process; what effects the crisis is developed European countries and the United States negative effects. They define it as a system that holds ushaving; what role is played by the existing infrastructures of America. Within the European countries, they quote Depending on this appreciation, the experts felt that captive and they advise defining a new economic modeland human capital in decision-taking on FDI; what the France, Germany, the United Kingdom and Benelux as once the emerging countries establish foreign direct to replace it.sectors are that need promoting in terms of FDI; and how the principal driving forces. investment flows into Europe in a systematic way (notthe foreign companies perceive the Barcelona brand. purely occasionally), they may prioritise countries such By contrast, they felt that what companies are looking for In their opinion, the emerging countries (understood to as Germany and the United Kingdom as initial recipients and value is the existence of favourable conditions: for be the developing countries that are experiencing rapid of their FDI. them to be given facilities that help them gain time and economic growth) will generally continue to be clearly save money in the start-up and establishment stage. inward foreign direct investment markets rather than out- The participants in the study felt that the cultural and ward markets with regard to FDI flows with the developed language affinity should favour the attraction of foreign In this vein, they stated that foreign investment has to countries. investment from Latin American multinational compa- come primarily due to intrinsic reasons, that is, because of nies into Spain. In this sense, though, they had the feel- the attractions and assets of the Barcelona area for FDI, Consequently, they expect the to-date traditional foreign ing that these companies had a preference for Madrid and not simply for extrinsic reasons such as subsidies. direct investment countries will continue to have the over Barcelona. active role in the short term that they have had until now and that they will retain their relative weight in total They highlighted that Madrid has played a more impor- foreign investment made in the Barcelona area. tant role to date in attracting FDI from Latin America. However, with regard to FDI from Asian markets and On the basis of stating this reality with regard to the the Mediterranean, they felt that Barcelona could have origin of foreign direct investment in the Barcelona area, greater potential. the experts consulted see it as necessary to focus efforts in attracting investment on the traditional countries in the short term and on orienting and planning promotion policies towards the emerging countries in the medium Decision-making and long term. There was was a unanimous opinion that investment de- They put forward the idea of planning promotion policies cisions in a foreign country continue to be taken mainly with regard to companies from the emerging countries from the headquarters by managers located there. from the point of view that the large companies from the traditional investor countries are already present in However, the participants in the study stressed that the Spain in general and, to a large extent, in the Barcelona role of the local manager takes on a strong dimension in area in particular. the decision-making process with regard to reinvestment and greenfield investments aimed at creating global Within these promotion policies aimed at the emerging specialist centres. countries, they prioritise target zones, most notably the more developed Asia, as a medium-term opportunity.
38 FOREIGN INVESTMENT IN THE BARCELONA AREA 392. The principal 3. The principalattractions and obstacles toweaknesses of foreignBarcelona area in Principal attractions Principal weaknesses investment in theattracting FDI In the opinion of the experts and managers, the principal attractions of the Barcelona area can be summarised in The professionals consulted all highlighted the fact that Barcelona not having the attributes of a national capi- Barcelona area the fact that besides fulfilling the objective parameters tal (for example, being the home of national regulatory required to attract foreign direct investment, it also agencies) prevents it to a large extent from having the enjoys a very positive perception in terms of qualitative lobbying effect that the political capitals of states have. parameters. They claimed that this removes it from the centres of power and decision-making in the political, economic and They felt, therefore, that the Barcelona area meets the financial fields. minimum objective requirements mentioned above that The experts and managers consulted were unanimous in companies value when investing in a country. In terms of They also saw the fact that venture capital does not that the principal obstacle today is the economic situation,Assessment criteria used by companies these aspects, they all highlighted the attraction of the fluidly go to the Barcelona area as a weakness, which characterised by political uncertainty and the lack of credi-in a foreign direct investment decision- market, the access to talent and the level of infrastruc- they feel hinders the option of launching good global bility of the policies aimed at tackling it, aspects that theymaking process tures as the ones offering a higher rating of the Barce- initiatives. felt defined the situation in Spain in the autumm of 2011. lona area.It was concluded from the participants’ opinions that the In this sense, they felt that the domino effect of the trend They said that viewed from outside, Spain is not presentlyassessment criteria has not changed with regard to the Of the qualitative parameters valued regarding the of moving the central offices of large multinational com- seen as a growth market, which makes it clearly less at-ones that had usually been considered. Barcelona area, the participants highlighted three princi- panies to Madrid is a cause for concern. tractive. They even perceive a current of opinion abroadConsequently, and in general terms, the target aspects pal ones: that avers that Spain gives cause for doubt.that are stated as most highly valued by companies, in Despite valuing the strength of its being a fashionableorder of importance, are as follows: • The quality of life achieved from its location from a tourist destination, they stated the concern that this The participants showed concern for the bad image por- geographical viewpoint, stressing the importance of the could go against the desired idea and perception of trayed constantly by the media, mainly the international• The attraction of the market. climate and the proximity to the sea and the mountains. Barcelona as a business city. media, making it extremely difficult to attract foreign• The ability to access skilled human capital, from the investment.point of view of both talent and skilled labour. • The nature of Barcelona as a city, which they classed They rated the cost of living in Barcelona as a weakness• A developed industrial fabric in its sector. as an attractive and cosmopolitan city with a high level of as they feel that it is an expensive city compared with With regard to this, they called for communication and• A suitable level of infrastructures. services and leisure and cultural facilities and of a size other European cities. public relations measures by the public institutions• The legal safety of the investment. that makes it easy and accessible. aimed at changing the image and perception currently• The initial facilities in the start-up process and sub- They emphasised the as yet unresolved reality of an held of Spain abroad.sequent facilities in the investment management and • Its location from a geo-economic point of view, high- insufficient level of knowledge and implementation ofcontrol process. lighting the radial location with regard to southern English in the city and the business world. They rated the lack of any structural measures being• A competitive cost level: both start-up (land, offices, Europe and the Mediterranean. taken due to the political cost that this might entail as arental of commercial premises, etc.) and operational. hugely significant obstacle.• A good level of knowledge of foreign languages. They commented that the current regulation of the Span- ish labour market was another obstacle that needs to be rectified. To this effect, they rated the labour relations model as being behind the times and too rigid as it does not aid flexibility. An obstacle that they regarded as endemic is the bureau- cracy and the lack of facilities by the various administra- tions. In this vein, they stressed that the establishment of foreign companies becomes a long and fragmented pro- cess often with unknown aspects that entail added costs.
40 FOREIGN INVESTMENT IN THE BARCELONA AREA 41 4. The impact of 5. The importance the crisis of the infrastructuresIt was noted in the study that for investors regarded as The foreign companies established in the Barcelona even more accentuated with regard to the southern After a long period of demands by the Catalan adminis-traditional (companies from OECD countries), the difficul- area say that they are noticing the impact of the crisis, European countries. trations and civil society, the participants in the studyties of accessing local financing sources for undertaking either directly or indirectly. In light of this unquestionable expressed the general satisfaction that there is withthe investment are not generally an obstacle as financ- truth, we are interested in ascertaining what the future of With regard to the promotion of geographical hubs by the regard to the level of infrastructures finally achieved ining normally comes from the central offices. Despite foreign investment will be at a time of crisis such as the large corporations, the professionals consulted stressed the Barcelona area.this, it was stated that foreign companies also suffer the present one. that the crisis has driven forward a previously existingeffects of the current credit restrictions indirectly as a trend. They also perceive that when activating this trend, When stating it, they did so not only as the expression ofconsequence of the difficulties experienced by their local We should highlight the unanimous observation by the companies structure the hubs around the pole or catch- a personal opinion, but they stressed the fact that inter-customers. experts and managers consulted that the present dif- ment area of large cities. national companies and agencies value the infrastruc- ficulty in securing foreign investment is due to the bad tures highly, which they class as modern and advanced.What they do see as an obstacle are the over-long pay- market outlook. Despite this, there was also agreement The managers see the fact of promoting geographicalment terms in the private sector in Spain. This fact is de- with the idea that we need to continue to work with the hubs as both a threat and an opportunity depending on Despite this general level of satisfaction, the profession-cisive in some commercial operations not being approved aim of attracting new foreign investment in order not to the competitive abilities of the subsidiary compared with als stressed that they feel that there are still three short-by the central offices due to an issue of payment terms lose ground with other cities or centres of operations others in the group. comings of economic significance for the Barcelona area:and conditions. (“hub cities”, a concept we will be explaining later) or with the Mediterranean rail axis, the intermodal connections other subsidiaries of the same multinational groups. In their view, the threat of this circumstance is that it with the Port of Barcelona as backbone, and the scantAlso worthy of separate mention are the long payment gives rise to a situation of internal competition between intercontinental connections with Barcelona airport.terms of Spanish public administrations. Foreign compa- They base this opinion on the fact that multinational the various subsidiaries of a multinational company. Innies see this aspect as inexplicable and unheard-of. In companies decide their investments with a medium- and this sense, they say that they are managing the existence There is also the perception of some urgency to com-this sense, they rate highly the existence of commitments long-term view. Therefore, in this sense, they believe that of a real risk of loss of certain functional areas by a sub- plete the high-speed train connection with France onceby some administrations to address this problem and companies may already be planning new investments. sidiary, which could be left with just the more operational and for all.progressively shorten payment terms. The experts claimed that they knew of investments that part of sales. had been shelved due to the global crisis scenario and There is full agreement among the professionals on theThe experts stressed the difficulties in trying to obtain which they felt could be taken up again at one time or As an opportunity, the managers referred to the potential problem of the lack of international connections, espe-permits and visas for non-EU national employees. This another. of creating global specialist units and shared service cially intercontinental ones, at Barcelona airport, as inconstitutes a clear hindrance in companies’ ability to centres. their opinion it hugely hinders the creation of hubs. Here,attract talent and to bringing in foreign entrepreneurs they recalled the importance that “hub cities” acquire inseeking to push forward internationally-oriented business A new focus in the sphere of foreign The managers consulted stressed that their corporate the new focus of foreign direct investment.projects in Barcelona (known as born global companies). direct investment parent companies allocated the investment budgetThis problem is heightened in the case of Asian origin. among the various subsidiaries primarily according to the The managers stated their dissatisfaction in terms of The managers and experts consulted stated that we are forecast levels of profit and return. This means that the domestic connections, both in terms of destinations and seeing a new focus in the sphere of foreign direct invest- managers of the Catalan subsidiaries have to structure their frequency. They commented that this gives rise to ment on the basis of two main facts: the change in the and defend constant reinvestment proposals that are difficulties when arranging Spanish internal meetings destination of foreign investment and the promotion of competitive against other subsidiaries of the same mul- in Barcelona. They claimed that this means that they the city as centre of operations and connections (“hub tinational. have had to decide on several occasions to hold meet- city”) by large companies. ings, conventions or events in another Spanish city even though the headquarters are in Barcelona. With regard to the change in the destination of foreign in- vestment, the participants agreed that it is aimed mainly With a general state of satisfaction regarding infrastruc- at the emerging countries. However, rather than highlight tures on a macro scale, companies asked for emphasis the attraction of the emerging countries, they stress what to be placed on infrastructures on a micro scale. They they see as a loss of ground of the OECD countries, led commented that the good image and operation achieved by Europe, as a destination for foreign direct investment. on a macro scale is not reflected on a micro scale on the In their opinion, this loss of influence and attraction is various business parks and industrial estates where they
42 FOREIGN INVESTMENT IN THE BARCELONA AREA 43 6. The human 7. Strategic capital asset sector proposalsare located. They highlighted shortcomings in telecom- Technical and managerial talent General considerations Specificationmunications (connections and cover), services (basically of sectors that should be promotedtransport and restaurants), infrastructures (scant light- With regard to talent, the experts and managers con- The opinion was widespread among the participants ining) and investment in maintenance. sulted felt that the principal characteristic of Barcelona is the study that the attraction of investing in the industrial Participants’ opinions coincided in the need to focus that it is both a provider, in reference to the existence of sector is lost in Spain. In other words, they see a future effort on promoting the services sector as a great eco-They felt that the public transport system in the business internal talent, and a magnet, in reference to the ability scenario of large-scale foreign industrial investment in nomic asset of the future of the Barcelona area, togetherparks and industrial estates is inadequate. They stated to attract outside talent. Spain in general and in the Barcelona area in particular with certain more knowledge-intensive industrial sectors.that frequency is limited during the standard working as unlikely. Here, they stressed the need to promote developmentday, and that outside the standard times and at night, They generally expressed a very positive valuation in with the idea of achieving excellence.they regarded it as practically non-existent. This hinders terms of the professional quality of the local managers. What they do see is some option of attracting industrythe 24-hour shifts that are required, for example, in They marked highly the level of university education in when it is highly dependent on the logistics factor. They The experts and managers consulted cited six largeshared service centres (SSC). the Barcelona area and highlighted engineering degrees felt that in this case, Barcelona’s favourable location sectors as the main ones on which promotional efforts over other courses. They also emphasised the good man- with regard to the Mediterranean arc, together with the should be centred to secure foreign investment: agement skills due to the fact that Barcelona has some existing logistics infrastructure, afford it a competitive very good internationally acclaimed business schools. advantage that companies rate positively. The logistics sector. The strategic location of Barcelona and the potential of the Port of Barcelona headed the From the point of view of the participants in the study, Despite this general vision of not expecting foreign indus- professionals’ arguments as a great asset for promoting there are two main shortcomings in terms of local talent: trial investment, they felt that efforts should be focused a logistics platform in the Barcelona area and positioning the limited use of languages in the business world and on the area of global services for industry (stressing engi- the city as the Mediterranean benchmark in the logistics the scant international experience as a result of the low neering) and on the option of securing subcontracting of sector. This also has major positive implications for the tendency to work and live abroad. second-tier processes of SMEs as options for attracting industrial fabric of Catalonia as a whole. industrial activity and investment. The information and communication technologies The experts and managers felt it was necessary to pro- (ICT) sector. In a more particular sphere, they focused Skilled personnel mote the traditional sectors of the Barcelona area, which priorities on the software sector, the digital industry and they believe are and could continue to be competitive. In the audiovisual industries. The location of the National The experts and managers consulted agreed in the these traditional sectors that require promotion, they list Telecommunications Commission in Barcelona, the critical opinion regarding the level of skilled technical the pharmaceutical, chemicals, food and textile/fashion presence of a number of major multinational software training, referring primarily to the level of mid-grade sectors. companies, 22@ and the staging of the Mobile World professionals. They felt that this is a result of what they Congress in Barcelona are strengths mentioned by the termed severe shortcomings in vocational training. They It was the general opinion of the participants that efforts experts. highlighted the fact that they perceive this as a structural need to be focused and prioritised on future invest- issue in the country. ments. In this sense, they proposed detecting what the The biotechnology sector. With regard to biotechnology priority sectors at a European level will be. Once listed, in general, they recommended promoting applications in They felt that a key factor in the development of com- they felt that they should be analysed to identify the the medical-pharmaceutical field and the food industry, panies in the country is having personnel with techni- ones that are not easily delocated and, for these, assess which are sectors with a long tradition in Catalonia. cal skills, and it is therefore an important criteria when whether the Barcelona area has the ability and resources deciding to make labour intensive industrial foreign to be competitive. The sectors linked to creativity and culture. Within this investment. definition, they cited the design, fashion and cultural An activity that the professionals consulted unanimously industries sectors. stressed when setting out priorities was promoting innovation. To this effect, they felt it was necessary to develop an innovation network in the Barcelona area. They argued that Barcelona could play an important role in the field of innovation, primarily in the development of collateral applications for existing central products.
44 FOREIGN INVESTMENT IN THE BARCELONA AREA 45The tourism sector. The participants in the study com- They proposed active policies to secure entrepreneurial As part of these necessary conditions, they mentioned The participants were of the opinion that, generallymented on the success achieved by Barcelona as a profiles, potential creators of born global companies, the development of the infrastructure required, the speaking, the Barcelona area is not competitive enoughtop level tourist destination. However, based on this, aimed at students and professionals who visit the Bar- attraction of leading companies (which have a magnet – due to costs – in terms of call centres. Barcelona isthey proposed promoting high-quality tourism revolving celona area, be they for academic purposes or to attend effect) and a strong business-university-venture capital only competitive for call centres that need to securearound the gastronomy-leisure-culture axis. conferences. connection. personnel from a range of origins as a requirement for attaining a large range of languages. In this case, the at-The development of cruise tourism was also highly rated. The managers commented that to achieve investment traction factor of the city gives it a huge advantage.Despite this, the participants called for some reflection The creation of global specialist centres aimed at creating global specialist centres, the entrepre- The managers consulted highlighted the importance ofon making opening hours in Barcelona more flexible, to neurial spirit and the credibility of the local management being able to secure some type of shared group serviceensure maximisation of the tourism impact of the cruise The participants in the study see an opportunity in the teams in the eyes of the central offices of their compa- for their subsidiary or business unit as a way of retainingships. They also proposed fostering business tourism. growing trend by large multinational corporations of nies were also key. relative weight in the corporation and of maintaining a creating global specialist centres to attract foreign direct level of investment in the business unit.The talent-intensive services for people sector. The investment to the Barcelona area, primarily through thedefinition of this is channelled in two areas: promoting foreign companies already established here. The creation of shared service The reality analysed shows us the existence of SSCs inthe idea of Barcelona university campus and making a centres (SSC) the Barcelona area that have grown after an initial trialcommitment to healthcare associated with the Barce- In the opinion of the managers and experts consulted, phase, which leads to our being able to speak of second-lona medical centre concept. The participants founded the creation of global specialist centres is the result With regard to the specialist centres mentioned above, generation SSCs.their proposals on the existence of highly-acclaimed and of the strategy of large corporations of decentralising the managers and experts taking part in the studyprestigious top level professionals and institutions in the investments in their group, prioritising functional or busi- deemed that the creation of shared service centres (SSC) The personnel profiles of SSC members comprise mainlyBarcelona area. ness line specialisation. by multinational companies is a good opportunity for foreign graduates with a clear interest in geographical securing foreign direct investment in the Barcelona area. mobility and who value the attraction of the Barcelona They claimed that this decentralisation began with area as a place in which to work and, especially, live. InBorn global companies certain specific functions of R&D departments but that it They define SSCs as organisational units of the corpo- this sense, the Barcelona area plays a dual role: as an has now been extended to all areas of business activity: ration that provide back office support to the various initial attraction factor and as an element of subsequentThere is the perception among the experts that the at- marketing, finances, logistics, customer care. subsidiaries (their internal customers) and take care of retention-loyalty.traction of Barcelona as a city in which to work and live carrying out certain processes and activities that wereis an asset that should be used to attract entrepreneurs According to the opinion of managers, the evolution of previously done in a decentralised way, thus eliminating The experts stated that this loyalty is defined by thefrom other countries with business projects of interna- the concept of the creation of specialist centres is even redundant processes and systems. For example, the pro- existence of a lower level of staff turnover in the SSCs intional scope (the so-called born global companies). giving rise to the development of newly-created global cesses of accounts, administration, marketing, sophisti- the Barcelona area compared with those in other cities, business lines. The managers stated that the respective cated levels of customer care, pre-sales and after-sales which results in better quality service for companies.The trait that the experts consulted most stressed of subsidiaries of a multinational corporation compete one service and others are usually replicated in the internalborn global companies is their importance in terms of against each other for a good position. The objective is divisions of the various subsidiaries of a multinational.scalable projects. Born global companies in a city cre- to attract possible investment from the central offices, What the SSCs do is consolidate some of these proces-ate reputation and generate opinion, even though they both to create specialist business activity centres and ses or activities into a single unit.might not create significant volumes of jobs in the first to create new business lines based on the existence ofinstance. They felt that in themselves it was difficult for resources and skills unique to the local subsidiaries. In the opinion of the professionals consulted, the SSCsthem to be able to generate viable projects of a certain are a management model that reduces costs, simplifiessize. To this end, they thought it was necessary to look In order to have a chance of receiving foreign investment processes and generates value. They felt that the charact-for the mechanisms to enable these entrepreneurs to structured in the form of a global specialist centre, the eristic of generating value is one of the key elements thatinteract with the large companies present in the region. managers consulted stressed the need to create the nec- differentiate SSCs from other centralised services that re- essary conditions of an open innovation system in the quire less skilled personnel, as is the case of call centres.They also see the need to involve universities and busi- Barcelona area to be able to be considered a competitiveness schools in the project to secure and develop born option.global companies in the Barcelona area.
46 FOREIGN INVESTMENT IN THE BARCELONA AREA 478. The Barcelona 9. The opinion ofbrand former ESADE studentsIts global positioning The role of the Barcelona brandThere is evident unanimity among the professionals con- The participants in the study stressed the importance of Complementary to the qualitative research, we conduct- Principal results of the survey of formersulted in the study regarding the powerful strength and choosing a brand that positions the region. ed a survey in collaboration with the ESADE Alumni Asso- ESADE studentsgreat value of the Barcelona brand. ciation asking, among other aspects, about the attraction In this vein, they showed a clear tendency to promote the of Barcelona as a destination for FDI. The survey wasBoth the experts and the managers stated that everyone Barcelona or Greater Barcelona brand rather than en- aimed at the group made up of former students from this In what sectors do you think there is morewants to come to Barcelona to work, to live, to take part hancing the Catalonia brand. In favouring the Barcelona business school who work outside Spain, many of them potential for attracting FDI to Barcelona?in a conference or to attend a trade fair. brand over the Catalonia brand, they argued the follow- foreign and all with a good knowledge of Barcelona. (two options could be chosen) ing relevant aspects:They therefore said that the ability to attract is a huge With all reservations necessary for the bias that this Tourism 78.1%strength, in addition to which they stressed the percep- • Barcelona has a much higher profile. group might have, the results, shown below, coincided Fashion 51.4%tion of solvency that the city has when organising any • Barcelona has a more defined positioning, easier to strongly with those from the field work in the study. Business services 34.3%type of international event: they felt that the organisa- make tangible, understand and perceive. Software / ICT 21.9%tional ability and professionalism are never in doubt. • The existence of a certain perception and tendency to Biotechnology / Pharmaceutical sector 21.0% Health /Medicine 17.1%They believed that Barcelona combines attraction and make the positioning of the brand/city integrate that of Consumer products 15.2%solvency, which increases the chances of success. the region.They insisted, however, on the idea that it has to go from The participants mentioned the existence of certain What are the main factors on whichthe perception of a tourist city to one of a business city. outside opinion that relates the Catalonia brand with Barcelona’s ability to attract lie?The majority of the participants recommended the option an identity factor that is neither well perceived nor well (two options could be chosen)of positioning Barcelona as the Mediterranean business understood abroad and that could determine investmentcapital. With this positioning, the aim would be to estab- decisions. Quality of life 72.4% Adequate infrastructures 50.5%lish Barcelona as the business hub for southern Europe Talent and quality of human capital 46.7%and the Mediterranean area. In this sense, the participants felt it more effective to Innovation 36.2% sell always more positively the differences that could Labour costs 18.1%In order to achieve this aim, they felt that the willing- be derived from an identity factor (culture, language). 12.4% Stability of the regulatory environmentness to strengthen the values of Barcelona as an open, They proposed taking the difference to the economy Size of the market 8.6%cosmopolitan and modern city was key. and business world, emphasising that Catalonia and the Barcelona area have better opportunities for emerging from the crisis. They felt it a good idea to carry out active How would you rate the city of Barcelona? communication policies in this vein. Negatively negatively Positively positively Neutral Very Very From the manager’s point of view: city 0.0% 1.0% 5.8% 43.3% 50.0% in which to live and work From the company’s point of view: city 0.0% 5.8% 39.4% 47.1% 7.7% in which to do business
48 FOREIGN INVESTMENT IN THE BARCELONA AREA 49 10. Summary of conclusions of the qualitative analysis SWOT ANALYSIS of the Barcelona area’s potential to secure foreign direct investment Strengths Opportunities The strong asset provided by the Barcelona brand. The promotion of the role of “hub city” by large companies as a pole By way of a summary, the principal conclusions of the in- of creation and development of business and innovation networks. depth interviews and the focus groups with experts and Barcelona as a top level tourist and events organisation destination. managers from foreign companies have been structured Establish Barcelona as the administration and business centre The high level of quality of life in the Barcelona area. for southern Europe and the Mediterranean area. The existence of a in a SWOT analysis (strengths, weaknesses, opportuni- The combination of capacity for attraction and perception of organi- series of sectors that should be promoted for FDI in which Barcelona is ties, threats) of the Barcelona area in terms of its poten- sational solvency that Barcelona enjoys. especially attractive and competitive is a clear asset that strengthens tial to secure foreign direct investment. this. The unique nature of Barcelona as both a talent provider (internal) and talent magnet (external) city. The trend by multinational companies of creating global specialist centres and shared service centres around the hub cities. The professional quality of the local managers and the existence of a high level of universities and business schools. The existence of a willingness by foreigners to want to come and work, live, take part in a conference or attend a trade fair in Barcelona. The satisfactory level that has been achieved in terms of large infras- This capacity of attraction that the city has may help secure entrepre- tructures in the Barcelona area. neurs from other countries with born global business projects. The existence in the Barcelona area of a series of traditional sectors with a competitive base and development capacity to attract FDI. The emerging countries will, in the long term, become outward FDI markets. The development of the existing shared service centres, which leads us to speak of second-generation SSCs. The existence of a good basis of renowned foreign companies in the Barcelona area with the ability to be able to make new investments. Weaknesses Threats The fact that Barcelona is not a capital city, which hinders its benefit- The global economic crisis is resulting in a significant fall in world FDI ing from the lobby effect. flows, primarily those aimed at developed markets. The fall is leading to a high level of competition between the different areas and cities in a Venture capital does not fluidly go to the Barcelona area. position to receive FDI. The present regulation of the Spanish employment market together FDI flows are aimed primarily at the emerging countries, which are with the perception of a legislative and fiscal regulatory environment appearing as the main competitor in attracting FDI. Europe has lost that is not sufficiently favourable and stable. centrality and it is proving to be difficult for multinationals to justify new Specific shortcomings in key infrastructures: Mediterranean rail axis, investments This fact is intensified with regard to southern European intermodal connections at the Port of Barcelona and still scant inter- countries. continental connections from the airport. Risk of the loss of certain functional areas by subsidiaries due to: Better positioning as a tourist city than as a city in which to do business. 1. the trend towards centralisation of operations, and 2. the evaluation of the investments that need to be made by the central offices accord- Perception of expensive city in comparison with other European cities. ing to criteria of yield and return on investment. As a consequence, this Shortcomings in the level of mid-grade skilled technical training. has given rise to a state of competition between the various subsidiar- ies to secure FDI. An insufficient level of knowledge and command of languages in the city and business world. The situation of political and economic uncertainty that Spain is undergoing, and the fact of its not being perceived as a growth market. The lack of soft landing policies for foreign companies and managers. This threat is augmented by the bad image of the Spanish economy shown by the international media. The FDI cycle for the Barcelona area planned some years ago is in the final stage of maturity.
52 FOREIGN INVESTMENT IN THE BARCELONA AREA 53Based on the results obtained throughout the study, col- China plays an important role as outward FDI market on 3. 5. lated in the previous sections of this report, the research the African continent. We need to study the possibility of Continue to develop the positioning and management Draft active policies to secure talent, placing the empha-team has drawn up a series of recommendations relating triangulation operations that involve Chinese investment strategy of the Barcelona brand with the aim of reinforc- sis on the idea of attracting and securing the best talentto the policy of securing FDI in the Barcelona area. The regarding goods or services that are complementary to ing its reputation and value on the basis of a clear and in the strategic sectors that are to be promoted, and aidcontent of each of the recommendations has been com- the central investment that these companies make in unique proposal to convey to foreign investors. The fos- their arrival and start-up process.pared with a selection of the experts taking part in the various African countries where it is difficult for them to tering of Barcelona’s reputation is based on the existingstudy, and there was a broad consensus. The following obtain them. Barcelona’s logistics infrastructures and assets and strength of the brand. There is an opportunity to secure talent and professionalare the details of these recommendations. geographical proximity are assets that should be pro- profiles of foreign entrepreneurs with born global busi- moted in this sense. This recommendation is founded on the economic impor- ness projects among the students and professionals who tance that the “hub city” concept is acquiring, combined visit the Barcelona area, be they for academic purposes1. with the huge asset of the Barcelona brand. or to attend conferences.Implement a policy that reinforces the attraction and B. The proactive management to retain and fostersecuring of foreign direct investment (FDI) in the Barce- foreign companies already located in the Barcelona area: With regard to the proposed positioning and brand value However, assuming that talent goes where there arelona area, focusing on the long term and from a defined This is of great importance as in the short and medium that should be constructed, the proposal made by the ex- opportunities, the right ecosystem for this needs to bestrategic point of view. term, the bulk of the FDI will come from multinational perts and managers consulted in this study of positioning created. We stress the importance of concentrating ef- companies from developed economies that are in the Barcelona as the Mediterranean business capital should forts and resources on the sphere of innovation in orderThe defined strategic point of view should align the main already established in the Barcelona area. be valued and studied. to attain positive dynamics that offer feedback: talentdesired positioning of Barcelona in the eyes of potential generates innovation, and this acts as a pole attractinginternational investors, the economic sectors where Retention has to be structured through the creation of innovative projects in both established and emergingefforts to attract FDI need to be concentrated, the new loyalty programmes with improvements to the conditions 4. sectors.added and differential values that need to be developed, of the business environment. Create and develop the necessary conditions of an openand the agents who have to make it possible. innovation system for the Barcelona area to be regarded In this vein, special care needs to be taken regarding as an attractive and competitive option. 6. It will be key in this process to focus the objectives multinational companies located in the Barcelona area The policy for attracting and securing foreign directthat are to be achieved, prioritise the sectors that need that work in the area of regulated sectors or business It would be ideal to establish actions to secure compa- investment (FDI) in the Barcelona area calls for the crea-promoting and bring together a common, integrated and services and that are greatly dependent on the national nies in innovative sectors and sectors related to informa- tion and formalisation of soft landing systems that aidcoordinated vision among the public and private spheres capital status. tion and communication technologies. the process of arrival and start-up of new companies.about the role of Barcelona in the world. In short, we are However, the soft landing policy should not be based onfacing the necessary start of a new cycle of policies to The aim of proactive retention requires the activation The availability of venture capital geared towards foreign the idea of public grants. A new focus geared towardssecure FDI in the Barcelona area. of leverage policies aimed at increasing the activities of direct investment operations would facilitate the ar- establishing a business-friendly environment needs to be established companies with investment potential. In this rival of these capital flows. Appropriate tools need to be defined. vein, it is a good idea to work on dynamisation with a provided to aid the initial entry phase – providing the2. view to being able to detect opportunities. sureties or guarantees that help afford access to theThe policy of securing foreign investment should be required financing – and the subsequent project scala-geared towards achieving a dual objective. The environmental conditions need to be defined, estab- bility phases. lished and promoted so that subsidiaries established inA. The diversification of the origin of FDI in the Barcelona the Barcelona area can be competitive in their aims to A key aspect in constructing this innovation system isarea: To this effect, it would be a good idea to orient and create global specialist centres or shared service centres. to give foreign investors trust and security through theplan promotion policies that seek to attract and secure establishment of a clear legal framework and stable taxinvestment with regard to the emerging countries. In this sense, the creation of communication and institu- legislation in the sphere of FDI. tional collaboration ties with the managers of the localThis is medium- and long-term planning with regard to subsidiaries is necessary, as their role is key in decision-the majority of the emerging countries. Despite this, the taking for this type of investment by the central offices ofdifferentiated role of China should be considered, which multinational companies.does act as a an outward FDI market, even though it hasnot done so actively towards European countries, withsome individual exceptions.
56 FOREIGN INVESTMENT IN THE BARCELONA AREA 57Methodologies used Secondary information analysis Even though there is a lot of statistical information The organisations participating in this part of the field regarding FDI inflows, we should also stress a significant work were the following:Research can be divided into primary and secondary The research team consulted a number of information limitation when referring to their origin: the statistics onlyresearch. Primary research generates new information sources regarding foreign direct investment both inside include the origin of the last outward country, which may ACC1Ódirectly by asking the economic agents directly involved and outside Spain with a view to ensuring the compara- be different from that of the original outward country. American Chamber of Commerce in Spainin the phenomenon under study. There are numerous pri- bility of data wherever possible. The favourable fiscal treatment that certain countries Barcelona Metropolitan Strategic Plan Associationmary research techniques, each of which has its advantag- offer foreign investors, as is the case of Belgium, Ireland, British Consulate-General Barcelonaes and drawbacks. Quantitative techniques (for example, The main sources of information were the UNCTAD For- Luxembourg, the Netherlands and the United Kingdom, Business Chinasurveys with representative samples) can give us a better eign Direct Investment database and the Datainvex da- means that these countries act as a springboard from German Chamber of Commerce for Spainestimation of the dimension of certain variables, even tabase of the Ministry for Industry, Energy and Tourism. which multinational companies invest in Europe. This Italian Chamber of Commerce in Barcelonathough they may be redundant if there is good secondary Other sources were also consulted, as well as numerous has dual consequences: one is that the official statistics Barcelona Chamber of Commerce, Industry and Shippinginformation. For their part, qualitative research techniques studies and reports, most notably the following: do not allow us to know what the countries of origin of Casa Àsia(for example, focus groups or in-depth interviews) allow us the investment are, and the other is that the last outward Instituto Cervantesto go more deeply into understanding complex phenom- World Investment Report 2011 – UNCTAD countries are over-represented. PIMECena, understand the underlying causes and identify trends. (United Nations Conference on Trade and Development) Hong Kong Trade Development Council Investment Prospects Survey 2010-2012 – UNCTAD With regard to the analysis of FDI flows, the research Chambre de Commerce et d’Industrie FrançaiseBy contrast, secondary research uses all of the existing (United Nations Conference on Trade and Development) team benefited from the accumulated experience of the de Barceloneinformation, such as studies and reports published on the World Economic Situation and Prospects 2011 - UNCTAD ESADE-ICEX Observatory of Spanish Multinational Com- Cushman & Wakefieldbasis of official statistics, surveys, databases, public re- (United Nations Conference on Trade and Development) panies (OEME) in this type of study. It also consulted a Consulate General of Mexico in Barcelonacords, etc. It can provide us with quantitative information, Informa database – ACC1Ó/Invest in Catalonia recent study led by Professor J. F. Valls on the Barcelona Consulate General of Switzerland in Barcelonawhich is normally key to evaluating an economic phenom- SABI (Iberian Balance Sheets Analysis System) and brand and its projection abroad. Honorary Consulate General of India in Barcelonaenon. However, it usually refers to the past rather than to Amadeus databases Fira de Barcelona Exhibition Complexthe future and it does not always include the direct opinion Foreign investment in Catalonia and Catalan investment Garrigues Law Firmof the economic agents involved. abroad in 2010 – Barcelona City Council Hunivers (Economic Promotion Department) Interviews with experts Quebec Office in BarcelonaWith the mission of achieving the specific research aims Foreign investment in Catalonia and Catalan investment Port of Barcelonaand to identify opportunities and generate new policies, abroad in the first quarter of 2011 – Barcelona City In an initial phase, the researchers conducted in-depthwe decided to combine quantitative analysis based on Council (Economic Promotion Department) interviews with experts related to foreign direct invest- Besides this, in Barcelona City Council, the researchsecondary information (FDI statistics) with the use of prin- Note on FDI inflows in Spain in 2010 – Foreign ment operations in Barcelona and Catalonia. With this team interviewed managers from Barcelona Activa andcipally qualitative research techniques. In fact, since each Investments Register, March 2011 – Directorate of aim, they identified and selected a numerous group of 22@Barcelona.of the methodologies displays strengths and weaknesses, Strategy and Development. Invest in Spain. Ministry for representative experts from chambers of commerce,we decided to use a combination that was appropriate to Industry, Energy and Tourism. foreign consulates, firms of lawyers and specialist con- The results of this first phase of the qualitative researchthe study and to the present situation: focus groups with sultants. The interviews with experts were held between enabled us to identify the main subject areas thatforeign company managers, with a broad representation Using this information, the team analysed the values of June and September 2011. needed to be researched: the drivers and the obstaclesof sectors and countries of origin, in-depth interviews with the principal variables relevant to foreign investment in to foreign direct investment and emerging trends.managers of relevant companies in this group, and inter- Barcelona, especially the evolution of FDI in the world,views with local experts linked with inward FDI in Catalonia in Spain and in Catalonia and Barcelona, its countriesfrom chambers of commerce, consulates and consultancy of origin and the destination business sectors, and thefirms. number of existing foreign companies.The following gives a brief description of the main charac-teristics of the information sources consulted and the fieldwork carried out in drafting this study.
58 FOREIGN INVESTMENT IN THE BARCELONA AREA 59Focus groups with managers In the field work with companies, managers from the Survey of former ESADE students following firms took part in the various focus groups orThe focus groups with managers of foreign companies were interviewed personally: Adobe Systems Ibérica, Finally, we should mention that thanks to the collabora-were highly effective in identifying the principal points Akzo Nobel Packaging Coatings, Amgen, Bionexo, Círculo tion of the ESADE Alumni Association, the research teamof agreement between the main types of companies de Lectores, Diset, DSM, Euromadem, Geberit, Gore, conducted a survey of former students who work outsidestudied. The focus groups were held between July and Haribbo, Harvard University, Henkel Ibérica, HP Española, Spain. The aim was to find out their opinion about Barce-September 2011. Three workshops were organised, Huawei Technologies Espanya, Lidl, Manpower, Media lona in relation to its attraction in terms of FDI. The for-ensuring that the composition of the companies repre- Planning, Pfizer, Ricoh, RWE Innogy Aersa, Schneider mer students, many of them foreign, had the opportunitysented offered some variety in order to gather different Electric, Sysmex Iberia, TAPSA BCN Publicitat, Timberland to find out the economic reality of Barcelona during theirgeographical and sectorial viewpoints: and University of Chicago. stay in the city to study at the ESADE business school, and their perception might complement the contributionsDeveloped countries, traditionally outward FDI to the of the experts. It is evident that there is a clear bias inBarcelona area and Catalonia (Germany, Japan, United Topics explored with the experts and this sample, but it was felt of interest to conduct it byStates, France, United Kingdom, etc.). managers sending an online questionnaire. We received 105 com- pleted surveys, which despite not being a representativeEmerging countries, potentially of interest in the future The focus groups and the interviews with managers and sample, does give an idea of their perceptions.(Brazil, Mexico, Turkey, China, Russia, other Latin experts covered a wide range of subject areas related toAmerican countries, etc.). foreign direct investment in Barcelona. Without aiming to be exhaustive, we would like to highlight the following: Validation of the conclusions with expertsTraditional sectors, linked to manufacturing, businessservices and logistics. • Foreign investment decision-making process As a summary, the research team conducted a new • Approved and rejected investments round of consultations with a selection of the expertsEmerging sectors, related to ICT, biotechnology and born • Key factors in decision-taking contacted at the start of the field work with the aim ofglobal companies. • The role of the local manager identifying areas of consensus and so attain greater • Attractions of the Barcelona area meticulousness when establishing the conclusions to the • Principal weaknesses study and offering a series of recommendations. • Cities with which it competes internationallyIn-depth interviews with managers • The infrastructures In this phase, as has just been mentioned, the central • Talent and skilled personnel issues were the evaluation of the present and futureThese personal interviews enabled us to complement • The city and its international image attractiveness of Barcelona, the principal obstacles andthe focus groups and ensure that the research team • The impact of the crisis drivers of FDI, the sectors and types of investment inobtained viewpoints from all the most relevant sectors • The emerging countries and their new role in this which the greatest opportunities for the city lie and theand geographical areas. However, they also afforded us phenomenon priority measures that need to be adopted.in-depth knowledge of the successful or failed invest- • Opportunities for Barcelonament operations and allowed us to explore the decision- • Key sectors that should be promotedmaking mechanisms better with the advantage provided • Possible measures for fostering FDIby the confidentiality of the information given in theinterview. An advantage of the use of qualitative research tech- niques has been the possibility of adapting the subject matter to each sector and company, and to the knowl- edge and interests of the people contacted, affording the researchers a three hundred and sixty degree vision of the subject area studied.
60 FOREIGN INVESTMENT IN THE BARCELONA AREA 61Bibliography Acknowledge- ments PARTICIPANTSWorld Investment Report 2011 – UNCTAD (United Nations The research team would like to thank all the managers Mr Albert Collado Garrigues Partner - BarcelonaConference on Trade and Development). and professionals who have, disinterestedly and individu- Mr Alfons Calderón Quebec Office in Barcelona Economic Affairs Attaché Mr Alfons Sort Adobe Systems Iberica General Manager ally, assisted in the project by contributing their opinions, Mr Amadeu Jensana Casa Asia - Barcelona Director of the Business CircleInvestment Prospects Survey 2010-2012 – UNCTAD which have been so valuable in drafting this report. Mr Carlos Ros Hunivers Divisional Director(United Nations Conference on Trade and Development). Ms Cristina Valiñani British Consulate-Barcelona Investments and Trade Director The contributions of the International Economic Promo- Mr Daniel Sancho DSM Manufacturing DirectorWorld Economic Situation and Prospects 2011 - UNCTAD tion, Business Growth and Strategic Sectors team of the Mr David Mayolas Geberit General Manager(United Nations Conference on Trade and Development). Area of Economy, Enterprise and Employment of Barce- Mr Dirk Spangerberg Haribbo General Manager lona City Council were also useful. Ms Dolors Lloveras Port of Barcelona Strategic Planning Ms Dolors Poblet Manpower General ManagerValls, Josep Francesc (2011). Estudi Delphi Turisme Mr Enric Calabuig Ricoh General ManagerUrbà – Pla Estratègic Barcelona 2015. ESADE Business Mr Enrique Valer Schneider Electric President of Iberian Zone & S. AmericaSchool. Ms E.Casademont Hunivers Partner-Director Ms Eva Blanco HP Española Public Relations DirectorGarcia, Oscar; Stirpe, Luigi (2010): “Análisis Comparativo Mr Fernando Andreu Sysmex Iberia General Managerdel Atractivo de España para la Inversión Extranjera Mr Ferran Figueres Lidl Supermercados General Finance Manager Mr F. Santacana BCN Metropolitan Strategic Plan General CoordinatorDirecta, 2010”. Madrid: Invest in Spain and ESADE. Mr Javier Durán W. L. Gore Divisional Manager Mr Joan Batlle Bionexo General ManagerInvest in Spain. Ministry for Industry, Energy and Tour- Mr Joan Ferrer DISET Managing Directorism and IESE Business School (International Center for Mr Joaquin Álvarez de Toledo Círculo de Lectores General ManagerCompetitiveness). Barómetro del clima de negocios en Mr Jordi Jornet Pfizer Olot S.L. General ManagerEspaña – desde la perspectiva del inversor extranjero. Mr Jordi Marti Amgen General Manager Mr José Emilio Serra Schneider Electric Marketing DirectorResultados 2011. Mr José M.ª Sánchez Huawei Technologies España Sales Director, Catalonia Mr J. M.ª Cervera Barcelona Chamber of Commerce Director of the Internationalisation Department Santiso, Javier (2011): “China cada vez más cerca de Ms Livia Paretti Italian Chamber of Commerce DirectorAmérica Latina”, Economía exterior: estudios de la re- Mr Lluis Blancafort PIMEC Sectorial Policy Directorvista Política Exterior sobre la internacionalización de la Mr Luis Carlos Lacorte Henkel Iberica Managing Directoreconomía española, no. 56, pp. 91-102. Mr Luis V González Honorary Consulate General of India in Barcelona Honorary Consul Mr Marc Pejó Timberland España Sales Manager Iberia Mr Mario Álvarez Harvard University Representative in Iberia“Restart”. Ernst & Young’s 2011 European attractiveness University of Chicago Representative in Europesurvey. Ms Marta Coll Media Planning - Barcelona General Manager Mr Miguel Poza Akzo Nobel Packaging Coatings Site ManagerEuropean Cities Monitor 2011. Cushman & Wakefield. Mr Oriol Barrachina Cushman & Wakefield Partner-Director Barcelona Mr Peter Moser German Chamber of Commerce for Spain Director of the Barcelona Office Ms PhilippeSaman Chambre de Commerce et d’Industrie Française DirectorKPMGs Global Cities Investment Monitor 2011. de Barcelone Ms Pilar Calvo Business China Partner-Director Mr Ricard Zapatero Fira Barcelona Int’l Business Development - Director Mr Robert Navarro RWE Innogy Aersa Finance Managing Director Mr Roger Santasusana Euromadem General Manager Mr Santi Morera HP Española World Vice President Ms Susan Feitoza American Chamber of Commerce in Spain Executive Director Ms Susana Tintoré ACC1Ó Director of Invest in Catalonia Ms Sylvia Pederzini Consulate General of Mexico Economic and Social Affairs Ms Véronique Oberlé Chambre de Commerce et d’Industrie Française Business Services Manager de Barcelone Marketing Director Ms Virginia Seoane Hong Kong Trade Development Council - Barcelona Mr Victor Ugarte Instituto Cervantes - Japan Representative in Japan Mr Xavier Martin TAPSA BCN Publicidad General Manager