What makes a city a prime location for a business? What factors are involved to ensure that a venture (whether a brand-new start-up or simply a new branch of an existing company) will grow into a successful enterprise?
Various features come into play, and it would seem that Barcelona has the recipe of success which includes just about all of them. Why else would it lead the reduction of unemployment rate in the third quarter of 2016, with a fall of 8.47%? Or have a government which provides various incentives for investments in Barcelona, such as grants, tax benefits and professional training?
Thus, the question becomes: Why is Barcelona a great place to do business?
An economic driving force
On the business front, Barcelona has an international reputation as a powerful economic driver with a highly diversified structure. This reputation, together with the Barcelona brand, is a crucial factor that helps enhance its position in the global market by attracting businesses, jobs, international talent and foreign investment.
In 2012, the Gross Domestic Product (GDP) of Barcelona reached 64,241,5 million euros, which equalled a GDP of 40.1 thousand euros per inhabitant. Two years later (in 2014), Catalonia generated a GDP of 209,282 million euros, representing 19.8% of the total Spanish GDP – 15% above the European Union’s per capita.
Barcelona continues to play a major part in the industrial sector, with its metropolitan region accounting for more than half of such jobs in Catalonia, particularly in the automobile industry, with Catalonia being one of the biggest manufacturers in Europe.
The leader of Spain’s knowledge economy
By the end of 2014, more than half of the paid employees in Barcelona (54.1%) were employed in knowledge-intensive sectors. The city is undoubtedly the main hub in Catalonia for such segments, accounting for 44.1% of jobs and more than one-third of all companies (34.9%) in these sectors.
Recent studies have also shown that the creative sector generates more than 108,000 jobs and accounts for nearly 7,800 companies in Barcelona – representing approximately 11,3% of employed people and 10,8% of businesses in the city.
It is also notable that, according to most recent research conducted in the urban environment, a higher percentage of people employed in the creative industries are closely linked to higher production rates per inhabitant.
An entrepreneurial hub
There are many reasons people choose to create start-up companies, but why are some locations more successful than others in attracting the attention of entrepreneurs, fresh talent, mentors and investors? This has to do with the incentives and opportunities a city offers and whether the quality of the environment encourages a company to flourish or fizzle.
After a financial crisis left 50% of youth unemployed, Barcelonians were forced to become more innovative, creative and independent. Thanks to this wave of fresh talent, start-ups and small businesses took off, helping the city to form a tight-knit sense of community, which is vital for the success of any business hub – and, of course, greatly influenced investments in Barcelona.
This is why nearly 14% of the companies in Spain have their headquarters located in Barcelona, and also why most of these firms are small and medium-sized enterprises (SMEs) characterised by their great flexibility and capacity to adapt to complex environments.
In addition, the city enjoys a healthy financial situation and applies rigorous economic and budgetary management that guarantees payment to suppliers within a maximum of 30 days.
Competitive real estate for businesses
The goal of the Barcelona-Catalonia initiative, launched by the Government of Catalonia and Barcelona City Council, is to jointly promote the development of new economic activities in the main sectors of the knowledge economy. These projects are located near major infrastructures that are intensive in both knowledge and mobility, comprise a total area of nearly 7 million square metres and have the capacity to generate more than 200,000 new jobs.
According to the global ranking published by Mercer Human Resource Consulting, Barcelona still remains outside the top 50 most expensive cities in the world (due, in main, to the strength of the US dollar against the euro and falling interest rates).
Commercial prices in industrial sectors also continue to remain stable.
The European city of the future
More than 5,700 foreign companies have based their headquarters in Catalan territory, with the main countries of origin of these enterprises being Germany, France and the USA. Not surprisingly then that in 2016, Barcelona came first in terms of Foreign Direct Investment (FDI) Strategy, a crystal-clear indication of the city’s ability to attract top investors ahead of other major cities like London and Stockholm.
To keep its workforce at a prime level, The City Council of Barcelona encourages its staff to undertake training (including team workshops and roundtable gatherings) in order to polish and improve their skills and offer investors the best possible service.
The city also boasts a remarkable online presence, with a dedicated website and e-newsletters, while a database of useful contacts is kept up to date in order to promote investments in Barcelona.
Regarding the future, a new sustainable urban growth area is planned for the city, as well as infrastructure developments, including the Metro Line 9, which, once completed, will be the longest underground rail line in Europe.