Foreign companies, the independence vote and doomsayers

Catalonia remains a favourite among foreign investors, but we must keep working to hold on to talent and lure even more

Economists claim that it will be a while before we can ascertain the actual economic impact of the political instability that followed the independence referendum on October 1, Madrid’s direct rule on Catalonia and the elections of December 21. For instance, last week we learnt that Catalonia lost nearly €30 bn worth of bank deposits in 2017, although most of that cash never actually left the bank, but was transferred to a mirror account opened at a branch outside Catalonia.

Last year also brought us some good news about the Catalan economy. For example, the latest survey on foreign businesses in Catalonia conducted by Acció shows a 22 per cent growth in 2017, bringing the total number of foreign companies to 8,642 (one per cent of all firms in Catalonia). According to Acció’s survey, foreign capital businesses account for 31 per cent of the total turnover of Catalan companies (the same figure for Spain as a whole is lower: 29 per cent, according to Spain’s National Statistics Institute, INE). They also account for half of Catalonia’s exports and 19 per cent of all jobs.

Furthermore, since leaving the recession behind in 2013 this has shown an upward trend, with a total of 3,040 new foreign companies setting up shop in Catalonia, a 54 per cent hike. After all, the FT has declared Catalonia the most attractive European region for its economic potential, human resources, lifestyle, profitability and connectivity, as well as for having a skilled labour force whose costs are still lower than in other regions that it might compete against.

As we wait to take stock of the crisis we experienced in autumn last year, these figures prove the doomsayers wrong and they show that Catalonia remains a favourite among foreign investors. Nevertheless, we must keep up the good work.

Firstly, the bulk of companies in Catalonia —SMBs employ up to 70 per cent of the Catalan work force— should know that they must double up their exporting efforts because that improves their productivity.

Secondly, the various administrations must roll up their sleeves, too. They must strive to preserve the optimal climate that fosters new business projects. For instance, it is not acceptable that setting up an industrial firm in Catalonia is four times harder than in the rest of Spain, according to World Bank figures. Likewise, the necessary conditions must be created to lure new foreign talent and retain the local by means of a powerful research scheme. Finally, if it is true that the 4,000 companies who moved their registered address due to the political crisis are not coming back, it is equally true that their facilities, headquarters and, therefore, the bulk of their employees, are still in Catalonia and every actor must strive to ensure that it stays that way.