Barcelona, the Southern European start-up hub

Despite economic and political setbacks, Barcelona has done much to appeal to start-ups and international talent in recent years. The number of new businesses has increased 40% over the last three years and the city is now home to more than 1,400 start-ups. 

Barcelona is often associated with quality of life, the beach, sun, and great food, features that are undoubtedly important in attracting young international talent. But the growth in new businesses cannot be understood were it not for other important factors: a long business and entrepreneurial tradition; a university network strong in digital aspects and numerous other qualities; public-private initiatives such as the Supercomputing center and the Barcelona Tech City technology hub that help to channel innovation and digitization; and lower wages and costs than in many other European cities.

One of the great success stories is Glovo, a benchmark in the city. After initial uncertainty due to Covid-19, the startup has continued its unstoppable expansion, conquering new markets and signing more than 700 new workers since the beginning of the pandemic. Belvo, Typeform and Travelperk are other success stories, some of which have international founders who discovered the ideal ecosystem for their business in Barcelona.

Barcelona is undoubtedly an outstanding place in which to launch a new business, but there are clearly highly competitive alternatives in the rest of Europe. Below we set out the most important conditions for starting a business and some of the good practices from other European cities that could help Barcelona to boost its standing as a start-up hub:

1- Basic education to promote entrepreneurship from an early age. Despite the fact that innovation, technology and entrepreneurship are gradually being introduced to local educational institutions, there is still much to do when it comes to instilling entrepreneurship qualities in pupils. In Denmark, for example, all schools have a compulsory subject that encourages practical creative, critical and problem-solving skills in students through practical work.

2- Attraction of national and international talent in order to boost the Barcelona startup sector. The scarcity of technological talent is already palpable and will become more evident as the start-up ecosystem of our city grows. More qualified professionals must be attracted to this sector in order to meet the growing demand. COVID-19 has shown that labor mobility is less and less of a problem for companies, a fact that could be used to Barcelona's advantage to promote jobs with greater geographic flexibility. Finland, for example, has been a benchmark in this respect for years, being one of the great promoters of teleworking and job flexibility.

3- Less red tape to make it easier to start new businesses. Public authorities should offer the best possible facilities to make it easier for entrepreneurs wishing to set up a new business. In England, for example, one must simply complete an online registration at Companies House and pay a fee of around £15 to register a limited company. Compare this to the formalities involved in doing so in Barcelona (lawyer, notary, registration in the commercial register, capital endowment, etc.) and costs amounting to over €3,000!

4- Better financing and tax breaks for entrepreneurs Access to capital is essential when starting a new business, especially in the technology sector. And taxation plays a key part when entrepreneurs decide where to set up, and, in particular, whether to select Barcelona. We need to launch clear initiatives and harmonize tax policy on a national level, as in almost any other European country.

5- Public-private collaboration to stimulate entrepreneurship. Private individuals need measures that make it easy for them to become entrepreneurs. This requires the support of the public sector through local investments and subsidies. In Sweden, for example, workers who meet certain conditions are eligible for up to 6 months off work to embark on new projects, with their return to their original position guaranteed if they do not succeed.

The pandemic has disrupted the "rules of the game" for start-ups

All sectors and industries have been affected by the effects of the pandemic. Business models are being reinvented as thousands of companies are struggling for survival, while millions of employees working from home are wondering what the situation will be in a few months.

The new reality offers opportunities for cities and companies to adapt and compete for the best talent. Working from home (WFH) means that one can hire workers located in different cities, regions, and even countries. This gives well-trained and motivated employee more opportunities than ever before.

In the new scenario, employees wish to work for companies with a clear social purpose and impact. In addition to being profitable, companies must take a responsible approach to social issues such as climate change, sustainability, diversity, and equality. These issues are no longer a matter for philanthropists or countries, but are now important for private capital and investment. Anyone in doubt should cast an eye over the investment strategy of Blackrock, the world's largest asset manager.

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