Entrepreneurs ‘ fleeing ‘ Spain because of the difficulties of starting up a business - El Sol Digital

Entrepreneurs ‘ fleeing ‘ Spain because of the difficulties of starting up a business

In recent years there have been many Spanish researchers who have had to leave Spain to find employment in accordance with their expectations. A brain drain that is mostly associated with the field of science and research.


Spanish entrepreneurs have also had to opt for this option because of the many obstacles that Spain often imposes.
The report “Doing Business 2015 beyond efficiency”, prepared by the World Bank, analyses government rules governing companies and reveals which are the best countries to set up in business. According to the study, Spain is ranked 33 in the world ranking, behind countries like Mauritania and Poland. By contrast, Singapore is positioned as the economy with the most favorable regulatory environment facing businesses, followed by countries such as New Zealand, Hong Kong, Denmark, Korea, Norway, USA, UK, Finland and Australia.


Reflected in the report is the importance of the application of uniform and homogeneous standards which are essential for entrepreneurs to develop small and medium sized enterprises. In addition to these parameters, also taken into account is the fact that the destination country has economic stability, a favourable tax regime for foreign entrepreneurs, funding opportunities and that the costs to start the business are as cheap as possible.


In Spain, the government has over the last year included new lines of financing aimed at small and medium sized companies. Examples include Plan Growth, which was created to encourage the establishment of Spanish companies in the domestic market, or the Neotec Grants, designed to support the overall activity of innovative enterprises. Unfortunately, these measures don’t appear to have been sufficient, and as long as the regulatory environment in Spain continues to impose obstacles for entrepreneurs, many Spanish entrepreneurs will continue to pack their bags and head abroad.


In search of finance

One of their favorite places is Silicon Valley, the large business park located north of the state of California, United States. The profile of most companies that arrive in Silicon Valley is related to biotechnology, mobile phones or the web. The concurrence of these flows is such that a center of technological entrepreneurship for the Spanish has been set up.


The Spain Tech Center -STC-, a project promoted in 2011 by Icex, Red.es and Banco Santander, with the aim of contributing to the promotion of entrepreneurial culture and speed up the process of internationalisation of companies. “The partners saw that there were more and more Spanish technology companies in Silicon Valley, not receiving sufficient support, as a result this centre was born,” said Elijah Rabek, director of STC. Thus, the centre offers technology and innovation for Spanish companies. Through an immersion program of two weeks a strategic plan will be developed to facilitate the entry into the US market and put companies in contact with potential clients, partners or investors. Further, Rabek stated that, “the main reason that companies are travelling to Silicon Valley is to find funding and gain access to the US market, which encompasses 316 million people.” Also, in the words of director of STC, “establishing a business in the United States is more straightforward than in Spain.”


As observed by Rabek, many of these new companies are based in the state of Delaware, which, despite its small land area, has positioned itself as a major financial centre thanks to its taxation system and the large number of lawyers that can be found there, who help companies to set up.
However, not everything is advantageous in this great economy. The US also has some shadows in their regulations. “Although there is an ecosystem that combines investment , innovation and knowledge that’s hard to find in Europe in Silicon Valley, the competition here is very high and there are no government subsidies like in Spain, so money is needed,” said Isabel Arcones , co-founder and CEO of Onpublico, an application launched in San Francisco by three Spaniards. Rabek, when asked about this matter, said, he acknowledges that “ restrictive visa laws of the country are difficult and expensive for the establishment of future foreign entrepreneurs in the United States.”


Spanish set up in business lateris

Culture change is another element to consider in this phenomenon of internationalisation of companies. Despite the stereotypes, the fact is that “ the Spanish entrepreneur is as innovative and decisive as his American counterparts, if not more,” says the director of the STC.


The main difference is around age because Spanish entrepreneurs are older than than the average American entrepreneur. According to Rabek, this is because they have worked before in other companies , allowing them to develop a good business sense. The disadvantages of being an older entrepreuneur says Rabek is that many of them might have a family established in Spain, and they will have to think twice about this before moving to a new country.


Other entrepreneurs, such as Arcone, thinks that although “ in Spain there is a lot of talent, it is lacking in fundamental areas such as knowing how to sell your project in the international markets or little or there is no practical business training at an early stage in the academic world.


Consumer profile

Another difference in the market is the consumer profile. “The American user is ahead in adopting new technologies and consumption habits. On the contrary, it takes much longer in Spain and this makes businesses suffer having to wait until consumer habits change” explains Álvaro Mier and Antonio Jimenez, CEO and head of products respectively of Movielang, a tool launched by Spaniards from Silicon Valley. In the words of these two Spaniards, another reason to cross the pond is “the ability to attack the entire Latin American market.” It is because Latin America has positioned itself as one of the greatest boom territories. So much so, that Spanish companies have tripled their presence in countries like Ecuador in the past two years.


Some of those who leave, return with their ideas to try to launch projects that started beyond Spain’s borders. That was the case with Ebury Partners, a startup that was born in London dedicated to the forex market. One of its founders, Juan Lobato, explains that “in London, if you have a good idea, it is easier to find investors, which is one of the advantages of being in the financial capital of the world “.
It seems clear then that despite warnings about alleged recovery, many of these entrepreneurs are warning that it will take time for the economy to return to growth at a pace that will be noticed on the street and in business.

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