Updated: Mar 9
Spain is showing strong signs of economic health and prosperity from the deep recession the country has struggled to overcome during the last decade.
The New York times summarized the turn-around well in a recent article with the suitable title Spain’s Long Economic Nightmare Is Finally Over:
Spain’s economic reconfiguration is widely hailed as a key driver of growth. A decade ago, the country was hopelessly addicted to a credit-fueled construction boom that produced a shattering bust, leaving banks collapsing in the face of bad loans.
Today, construction is at half its previous weight in the Spanish economy. Exports have swelled to close to one-third from about one-fourth of the national economy.
Both from a macroeconomic and startup microeconomic perspective there are many promising indicators that is not just safe, it is also very good timing to look at Spain.
Here are 3 telltale factors worth your time:
1. Well-balanced and growing overall economy
Strictly GDP speaking, the growth forecast for Spain is +2,7% for this year, above average GDP growth 2018 for the Euro area (+2,4%), while still taking into account the ongoing political crisis in Catalonia, as mentioned in an economic outlook by Focus Economics:
Comprehensive GDP data confirmed the economy’s robust performance in the final quarter of last year, dispelling concerns of a severe slowdown caused by Catalonia-induced uncertainty. Discretionary household spending benefitted from solid labor conditions and low borrowing costs.
Bloomberg writes that "Spain has made major progress from the rocky start to this decade. Gross domestic product rose 3.1 percent in 2017, making it the third year that growth exceeds 3 percent."
The United States also shares this sense of belief in the Spanish economy with their prominent credit rating agency Fitch putting Spain in ‘A’ grade territory for the first time since 2012, supported by their statement:
“Spain is continuing to benefit from a reduction in macroeconomic imbalances underpinned by a strong, relatively broad-based, economic recovery.”
2. Tough times fostered resilient entrepreneurship
The brutal reality for young, well-educated Spaniards seeking full-time employment during the long period of the crisis encouraged, or maybe rather forced, many to look for ways of self-employment, paving the way for the blossoming start-up community that Spain can be proud of today.
Barcelona and Madrid are among the most attractive spots in Europe for digital talent followed by growing startup ecosystems in Valencia and in Bilbao.
These new job opportunities created within the digital entrepreneurial ecosystem together with a recovering economy has pushed down the massive unemployment rate with more than 10 percentage since the peak of the country’s economic crisis.
Although that is great news, the current unemployment rate at 16.7% (Q1 2018) is still among the highest in the EU, especially punishing younger people. On the flip side that means a lot of highly educated, hungry, young people available on the job market, as Javier Sanchez-Marco points out, CEO for the delivery startup Furgo:
The Spanish market has a big growth potential because we have many young, well-educated people who are ready to work hard and who are used to perform plenty of their everyday tasks online.
3. Maturing startup scene got a 45% increase in investment
The Mobile World Capital report states that the investment in Spanish tech-companies grew by 45% year on year and topped 779,3 million euros in 2017, bringing them very much in line with the major tech hubs in Europe.
During the recent years the entrepreneurial grit has started to pay off and Spain has been getting attention for startup successes like Wallapop, JobandTalent, Cabify and Glovo to name a few, attracting more investors, to quote the same report:
The degree of specialization and the startups’ maturity mean that the average investment has doubled and each time we are seeing more important investment rounds in Spain.
Spain next in your market roll-out?
With an invigorating injection of investment, innovative forces and will power, it does seem like a stronger and more dynamic economy is taking form.
Adding that half of Spain's population of 46 million people are already shopping online and lots of talented, tech savvy and resilient people are eager to work for you and bring your company to success, we definitely think you should consider giving this promising market a place in your roll-out plan.
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