Innovation

Made in Barcelona

The on-going economic crisis, coupled with soaring unemployment rates and hard-hitting austerity measures, has led to a proliferation of autonomous professionals and Startup companies in Barcelona, showcasing some of Europe’s most promising and intriguing ventures.

August 22, 2014

But how has something so promising surfaced from so much negativity?

With 25% of the overall population of Spain facing unemployment (50% of under 25s), and the implementation of ever-increasing austerity measures by a government which is, at best, perceived as questionable and self-serving, a drastic change in perspective and mentality has been an imperative precursor to repairing the country’s many scars and pulling the economy out of its (now) six-year slump.

 

Changing the chip …

As a (British) resident of Barcelona for the past 7 years, I have borne witness to some of the changes in social attitudes and perspectives that have helped contribute to Catalonia’s evolving and gradually improving economy. Changes resulting from desperation and frustration, from loss of faith in job security and from a need to fill the void left by the fear of unemployment.

The “Indignados” protests and the explosion of grassroots movements and associations around the country have spurred on a population left scrambling in the dirt, filling the gaps left by an eroding welfare state, and providing hope for those affected by the worst of the crisis. But there have also been positive changes resulting from regional government initiatives, focused on combating joblessness and reversing the recession by promoting entrepreneurship and creating wealth.

What’s clear is that one way or another the crisis has jolted people out of their comfort zone, and the growing Startup scene in Barcelona has been an important lifeline for the country.

 

Startups in Barcelona

Characterised by its restless, nonconformist and entrepreneurial character, the Catalan capital has become a global leader in fields such as architecture and city planning, culture, design and creativity. It is this evolving character, together with an overall change in mood and perspective, which has helped shape the city’s growing Startup scene, attracting increasing numbers of international talent to its shores and securing its status as one of Europe’s hottest Startup capitals.

So who has been leading this change and which Startups have succeeded so far?

Inspiring entrepreneurs in Barcelona

Successful startups in Barcelona

  • Icebergs (virtual organisation for creative minds)
  • Privalia (online fashion outlet)
  • Kigo (vacation rental management system)
  • Rock Your Meal (aimed at eliminating cries of “There’s nothing to eat!”)
  • Hotel Ninjas (cloud based hotel management system)

Growing interest from foreign investors and established venture capitalists, and an increasing popularity in crowdfunding and the like, has led to a rapid expansion of effective incubators, accelerators and community support organisations. Topped with cheaper salaries and a rich market of talented and experienced people crying out for employment, it’s easy to see why Barcelona is so popular (not to mention the temptation and unique allure of living in a beautiful sun-kissed location!). But it’s not all siestas and sangrias; setting up a company in Barcelona can be downright hard work…

 

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Red tape

The administrative process for opening a new business in Catalonia is complicated, expensive, and shrouded in bureaucracy and red tape. Catalan regulations and procedures require copious amounts of paperwork, and it can be incredibly tiresome at times. A business advisor or accountant is a must unless you want to risk being repeatedly sent to the back of the line.

At a national level, there are also far fewer available resources, especially in terms of raising capital and seeking advice. There is a lack of knowledge and long-term experience and the state of mind required for success is still in development (a wider acceptance of e-commerce and a greater understanding of technology, amongst other factors, is a must). Also, culturally speaking, society in Spain is conservative and extremely risk averse, undesirable traits in today’s economy. Support from regional governments, including enterprise expansion, creation support initiatives, and collaboration with European and State initiatives, has been vital in pushing through this phase.

 

Grassroots

Grassroots movements in Barcelona have also had a profound effect on industry. They have led to increased sharing movements and initiatives, and growing support for collaborative commitments. Local sharing models such as time banking, co-working and crowd funding have also become very popular, and companies based on these models, such as Foodsharing and RepairCafe, are racing ahead in the markets.

One-man businesses and self-employment levels are at an all-time high and there is a growing emergence of organisations such Barcelona FabCity, a program aimed at creating one FabLab per district of Barcelona by 2020.

Barcelona is also becoming increasingly integrated and developing a much broader international perspective, in part thanks to communities such as Barcinno, a collaborative platform for sharing news, knowledge & events surrounding Barcelona’s Startup, tech and innovation communities. As Barcelona’s #1 English-language tech resource, it is a unique channel for Barcelona’s rapidly growing entrepreneurial community to expand its presence, both locally and internationally.

It is initiatives such as these, paired with increased public subsidiaries and growing private Startups, which will be the solution to decreased European investment, and the saviour of the local economy.

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Initiatives

Entrepreneurship is now being highly encouraged by the government, and getting more young people hired is at the heart of a stimulus plan designed to reverse the country’s chronic recession. Although the effects are yet to be seen, there is talk of increased funding, tax breaks, and lower expenses, all of which would be greatly appreciated by both local and foreign investors.

Barcelona’s own government is working hard to establish the city as a premier entrepreneurial hub. Through their Barcelona Activa initiative, the government is implementing programs which will eliminate some of the red tape typically associated with launching a Startup. Innovative systems will provide Startup companies with tax benefits for launching and maintaining a presence within the city, and there will be increased events and networking opportunities for entrepreneurs, allowing key leaders to collaborate. With a little support, Barcelona has the potential to be one of the biggest and most exciting Startup hubs in Europe. It just needs a helping hand to get there.

In the meantime, there is a reassuring base of local and regional initiatives, headed by public and private institutions, designed to bridge this gap, including Enterprise Portal, CIRCE; EU GO Spain and the Chamber of Commerce. Providing business support programmes, advice on administrative procedures and financing (including grants) and other programmes of interest to entrepreneurs and business owners, it is services such as these which will contribute to Barcelona’s positive outlook.

 

Made in Barcelona

People are ready for a change, and that change seems to be manifesting itself here. Economically speaking, Barcelona still has a lot to learn – it’s far from being the next Silicon Valley – but there is huge potential for an innovative and exciting Startup scene, and whispers on the grapevine have already begun. For, perhaps, the first time in a while, the future looks bright.