Catalonia is territory of SMEs. They are 99.8 percent of the Business. These companies, which invoice less than 50 million euros and have less than 250 workers, represent a high
percentage of employment. In fact, they provide 75% of jobs and generate 60% of gross domestic product. SMEs have seen how, in recent years, the market has gone from being local to global.
In the eighties, main concerns of the Catalan companies were the tariffs -which disappeared with the creation of the EU- and a type of exchange that was competitive enough. In the nineties the main headache had to do with the financing and the infrastructure. But from the economic crisis of 2008 the Catalan company realizes that it has to look beyond its borders: it is necessary to internationalize. And at this point in the metamorphosis
business we meet.
X-ray of the business tissue
99.8% of the companies are SMEs; generate 75% of jobs and 60% of turnover
The companies seek the shelter of the Administration to initiate these processes. And they find it. The Generalitat has several programs underway to help SMEs expand the market. One of them is the program of coupons for internationalization. An initiative that offers aid to companies that want to start or consolidate the first stages of their international life. The program is aimed at those companies that export a maximum of 15% of their turnover. There are other government projects that help open markets and become an export company, most of them managed by Acció, Agència per a la Competitivitat de l'Empresa. The ICF also grants long and short term credits, between 5 and 25 years to return them. In addition, it has other financing lines that have the support of various departments of the Generalitat.
But all this process must be accompanied by a change of mental, cultural chip. This week in the Catalunya Futur debate organized by La Vanguardia in collaboration with the Generalitat has been discussed the challenges of the business fabric of Catalonia. In the debate, held at the Alma hotel in Barcelona, Matilde Villarroya, General Director of Industry of the Generalitat, participated; Lluís Juncà, director of Promoció Econòmica, Competència i Regulació de la Generalitat; Josep-Ramon Sanromà, CEO of the Institut Català de Finances; Xavier Pérez Farguell, president of Association for Corporate Growth; Vanesa Martínez, CEO of the Carinsa group, and Teresa Vallès, general director and co-founder of the Pastoret lactic company.
Challenges for the future
Retain talent and gain dimension or volume, the pending subjects of SMEs
Matilde Villarroya points out that in order to adapt to the new situation, small and medium-sized companies have to make a double effort: in addition to internationalizing, they have to commit to digitalization and innovation. The National Pact for the I ndústria has been key to achieve it. Waiting to make a new balance this spring, in 2017-the first year in force-has achieved a degree of compliance of 72%. 7 out of 10 programmed actions were executed and the budget was executed in a 69%, that is, 334 million euros of the 484 allocated for that year. Villarroya warns that "many SMEs do not have assumed that they have to be digitized. A lot of awareness is needed in this regard. The administration has an important role in these processes that, if not consolidated, could condemn the companies to their end. "
This change of mental framework forces the Generalitat to make transversal policies. The general director of economic promotion, Lluís Juncà, explains that the Government is making an effort to understand why we have so many SME companies in Catalonia. "There is a series of regulations or a lack of incentives that explain it, but the underlying factor is that there is a lack of corporate culture that values the growth of companies. The family business, very powerful, can not be the only model. " Juncà insists that the dimension hinders the digitization of many of these companies that "do not have enough muscle to face this challenge. It is demonstrated that there is a clear correlation between the volume of companies, productivity and the ability to go out to the international market. And you have to reach a minimum volume so that you can take on the challenges. That does not mean that all companies have to grow but we have to have a diverse business fabric where all have a place. "
The role of the Administration
The Government has launched several programs to encourage exports and digitization
Retain talent and have competitive salaries. These two ideas arise during the whole debate. They are two concepts that go hand in hand and are essential to meet these new needs of the Catalan business fabric. The National Pact for the I ndústria has also served to invest 43 million euros to promote programs for the recruitment and retention of talent. Villarroya explained that in Catalonia there is capacity to attract talent but "we have to work in a different way with universities". We have to be realistic: the quality of life in our house will allow us to attract talent but in the short term we are losing a capacity that companies from the United Kingdom or France benefit from. Because here wages are not competitive enough. Outside the young Catalans find better pay and this situation has a so-called effect.
The flight of young Catalans has grown in the last nine years. Between 2009 and 2018 this index, according to a report by the UGT, according to data from the Institut Català d'Estadística, has increased by 115%. Nine years ago, the number of young people under 34 years of age who emigrated abroad stood at 35,550. On January 1, 2018 there were 76,658. The city where most young people have left is Barcelona, but the demarcation in which the brain drain has increased the most is Girona.
To avoid this brain drain it is necessary that companies and universities work together. Pérez Farguell says that the pending issue is that the faculties understand what the needs of the companies are. The university generates a lot of knowledge but it costs to transfer it to the practical application. When we talk about the challenges of the business fabric, we have to refer to the challenges of entrepreneurs, which is not exactly the same. The essential characteristic of an entrepreneur is the ability to anticipate and anticipate. Many times we find that they do not have it, they do not diagnose where I am from and where I can go. Or they do not anticipate what the shareholding situation will be when a new generation arrives in the family business. The companies have to foresee how they have to be in the next 25 years.
We need productive companies that can give quality employment to the people who work. There is not a single recipe to get it. According to experts, companies that have accommodated private investors create more employment than those that have not. Debt financing has a limit, it has a danger. You have to find the balance between debt and own resources. And if companies are not able to do it alone they have to seek support. Experts agree that there is an excess of individualism, sometimes blocking the incorporation of a partner in a business. The fear to grow. These family businesses have to get rid of this fear. To grow they have several options on the table. One of them is to incorporate a partner that brings a new look. In many cases they need capital to get ahead with this bet. And here comes the Institut Català de Finances (ICF), which over the past eight years has developed an investment model with companies that are already growing and need a paradigm shift. Josep-Ramon Sanromà admits that many family businesses find it difficult to take a traveling companion because they feel very attached to the business. "There is a rejection when an external investor comes in, there is fear of losing control of the company."
The expert in corporate growth, Xavier Pérez Farguell, points out that the main challenge is how, among all of us, we convince entrepreneurs that each one has to analyze what they can do to grow, through purchases or merger processes, for example. "The crisis has taught us that in small companies the wind has taken them and the medium ones have resisted. We have to do larger companies. "
Teresa Vallès, from the Pastoret company, is an example. The contribution of a partner improved the viability of the business. "In each moment of the company, the roads and access to financing are different. We in 2010 made a first investment for new facilities. The ICF allowed us to secure the financial part of this stage. Later, when we showed that our product worked, we realized that it was time to grow. We had a differentiated product with very potential and we incorporated a partner. The selection is important, you need someone who creates value, who shares the goals you want for your company. "
There are companies, however, that are reluctant to incorporate a partner and do not do badly. A case of success in the field of innovation is that of the Carinsa group that is dedicated to the manufacture of flavorings and additives for the food sector and fragrances for cleaning products. Vanesa Martínez is very clear that it is essential to work in advance. "There is a part of intuition but also of information. Now we are working to look for proteins of the future because we read that the meat protein is finished in the world and we have to look for alternatives ".
The companies regret the excessive bureaucratization that extends the export processes. The Generalitat, through Acció, has created a portal to help companies to streamline all these procedures. And to which countries do Catalan companies have to look to open up the market? Pérez Farguell says that the future is in Africa and regrets that the Catalan business sector almost does not look towards that continent. And Africa, on a conceptual scale, has to be what Asia was 30 years ago. "