Spain’s financial progress has come on leaps and bounds within the final decade. A lot in order that it’s set to grow to be the fastest-growing main superior financial system on the earth this 12 months. The Spanish financial system is on target to broaden at 3 times the tempo of the Eurozone as an entire—and even eclipse U.S. progress charges within the course of.
Tourism, immigration, international funding, and public spending have been credited with this financial surge. However because the co-founder of a profitable scale-up, I’ve my very own theories on not solely how and why our financial system has hit its stride lately but in addition, extra importantly, the place we should always go from right here.
A booming tech startup scene
Entry to expertise in Spain is more and more turning into unparalleled throughout Europe. Regardless of Spain investing under the EU common in analysis and growth (Spain’s 1.44% of GDP vs an EU common of two.27%), our universities are more and more turning into facilities for superior analysis in fields like AI, robotics, cybersecurity, and renewable vitality. For instance, the Barcelona Supercomputing Centre on the Polytechnic College of Catalonia is a world chief in high-performance computing. Many universities are additionally energetic members in EU-funded analysis initiatives (similar to Horizon Europe) and host incubators and accelerators that help entrepreneurial ventures.
Along with graduates, Spain is attracting a rising variety of executives from throughout Europe and past to our tech scene. In keeping with the 2023 Startup Heatmap Report, Barcelona has consolidated its place because the second most most popular EU hub for startup founders for the sixth consecutive 12 months. The tax incentives for foreigners and executives from abroad are stacking up too.
The 2022 Startup Legislation has offered a extra favorable authorized and monetary framework for creating and scaling rising firms in Spain. Its implementation has not solely created a extra accessible atmosphere for native entrepreneurs, nevertheless it has additionally lured in additional international funding as well.
Spain’s capability to draw worldwide buyers is rising on daily basis. There was a rising realization that it’s potential to construct high-growth firms in Spain that may compete globally and lift capital from worldwide funds. In the present day, alongside Abacum, the likes of Cabify, Glovo, Job&Expertise, Idealista, and TravelPerk are all Spanish tech success tales.
In keeping with a latest report from Dealroom, the mixed worth of Spanish startups surpassed €100 billion in 2023, a 14% enhance from 2022. Additionally they raised €2.2 billion throughout 850+ funding rounds final 12 months throughout various ranges, from rounds under €15 million to these exceeding €100 million. Spain now ranks fourth in Europe for early-stage funding, and this progress underscores its potential as an rising powerhouse for European tech innovation.
Lastly, Spain is a rustic with a number of enterprise hubs, which means it isn’t as closely centralized as different European nations. Although Barcelona can dominate the headlines, it isn’t the one metropolis that’s rising in prominence as a tech hub. The likes of Madrid, Valencia, Málaga, Bilbao, and Seville all contribute to Spain’s multi-layered financial draw. Comparatively talking, the likes of the U.Okay. and France have very excessive expertise focus in a single metropolis.
Persistent challenges
It could be naive to solely wax lyrical about Spain’s financial prowess with out confronting a couple of house truths. Sure, GDP progress could also be world-leading, however our collective financial clout arguably doesn’t match it.
As an illustration, Spain’s present GDP per capita is a significant drawback. Proper now, worryingly, not solely does it sit under the EU common however it is usually under Spain’s pre-COVID and pre-Nice Monetary Disaster ranges. Disposable revenue per capita nonetheless actually lags the place it must be relative to total GDP. Because of this at a person stage, Spaniards have gotten poorer. The latest floods in Valencia and Southern Spain solely compounded this situation because of the scale of the catastrophe.
Productiveness ranges have additionally persistently been suboptimal for years and we at the moment have the best youth unemployment price in Europe. And although tourism has been an financial boon for Spain, some would argue that it’s creating extra issues than it’s fixing these days. It skews the housing market as expats and international consumers buy property in metropolitan areas, making it a lot tougher for locals to get a foot on the ladder.
While it might not essentially be a silver bullet, doubling down on the expansion potential of Spanish tech startups can go some solution to bettering a lot of Spain’s financial imbalances
The Startup Legislation was a step in the fitting route—however we should go additional. Nationally, we’d be in a a lot better place if we had extra incentives for startups and worldwide firms to arrange store right here. Extra coherent inventory choice regulation, enhanced incentives to discovered an organization, and decrease entrepreneur taxes. Spain should additionally enhance funding in R&D as a share of GDP. These are however a number of the levers that the federal government might pull to make entrepreneurship a extra enticing proposition.
If Spain really desires to be the financial jewel within the European crown, we must be bolder and braver and actively encourage entrepreneurial endeavors in a drive for extra innovation, a more healthy provide of jobs, and extra sustained progress.
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