JOAN ROMERO

Spain 2021 | ECONOMY | VIP INTERVIEW

TBY talks to Joan Romero, CEO Catalonia Trade & Investment, about FDI, the impact of COVID-19, and the region's growth potential for the coming years.

What have been the main areas of focus and key developments for Catalonia Trade & Investment since we last spoke at the beginning of this year?

The situation in recent months has changed dramatically. Our main priority in recent months has been to serve both the Catalan business community and those foreign multinationals located in Catalonia to mitigate the impact of COVID-19 as much as possible via the implementation of new services, aids and programs, out of Barcelona and through our worldwide network of 40 Foreign Trade and Investment Offices. For example, from the outset, in March, we launched a specific, proactive aftercare service and contacted more than 320 foreign companies located in Catalonia to advise them on areas such as supply problems, logistics or worker mobility. Furthermore, we intensified our contacts with the parent companies of foreign subsidiaries to understand their new needs and the solutions Catalonia could offer.

Last year, ACCIÓ attracted 365.2 million euros in foreign investment, 13% more than in 2018. In 2020, the pandemic has affected all sectors and segments of the economy, including FDI. How is ACCIÓ expecting to close this year in terms of investment brought to Catalonia?

In recent years, foreign investment attraction by Catalonia Trade & Investment has been increasing. Taking a longer view, in the last five years Catalonia Trade & Investment has attracted 34% more foreign investment volume and 83% more new jobs have been created thanks to investment projects of multinationals in Catalonia. The point here is that the trend is on the rise: Catalonia is consolidating itself with each passing year as one of southern Europe's most dynamic environments in business terms, with recent examples of new investments or expansions of companies such as Bandai Namco, HP, Boehringer Ingelheim, King, Henkel, Nestlé, Adevinta, ABB, and Bayer. Not to mention also attracting the world's most relevant congress in the audio-visual field, Integrated Systems Europe (ISE), which from 2021 will be held in Barcelona along with the MWC. A few weeks ago, we publicly announced, for example, that the number of foreign subsidiaries in Catalonia has grown by 60% since 2013, reaching today's number of 8,900. We are sure that in the midterm this will not change due to COVID-19. We do not foresee a significant number of projects being cancelled or discarded, although it is true that there are foreign investment projects that have been frozen or postponed pending the evolution of the pandemic, as is happening in the rest of Europe and as other investment attraction agencies explain to us. UNCTAD itself foresees that for 2020 global flows of foreign investment will decline between 30% and 40% due to COVID-19.In any case, the characteristics that make Catalonia one of Europe's most attractive locations for multinationals have not changed: a large concentration of foreign companies and startups in a territory with a strong industrial tradition and a powerful technological ecosystem based on scientific centers and world-leading universities. In fact, in Catalonia Trade & Investment we are working with a portfolio of more than 350 open investment projects from companies around the world. And 60% of the leads and projects that are being managed by Catalonia Trade & Investment are greenfield, a sign that Catalonia continues to attract new investment projects.

In Catalonia, we see that industrial companies represent the largest proportion of FDI, followed by TIC & digital transformation companies. What other sectors do you see potential in for Catalonia in the midterm?

Without a doubt, industrial and technological investments in general are the main priority when it comes to attracting foreign investment. From a sectoral point of view, it is true that Catalonia's assets have made it possible to position ourselves in some fundamental areas, strategically, socially and economically speaking. Thus, health, food, technology (IT & digital transformation) and the automotive industry of the future (i.e., electric, autonomous and connected vehicles) are the sectorial pillars in which we believe that Catalonia plays – and will continue to play – a fundamental role within Europe. Furthermore, we actively work to attract new projects in the chemical sector, e-commerce, logistics and video games, just to mention the main fields.

Despite Catalonia attracting EUR23 billion over the last five years, 45% more than the previous five-year period, the difference between Madrid and Catalonia is drastically increasing. According to a study from the LSE, the institutional and political discrepancies are affecting FDI in the region. What is your view on this?

I disagree. The stock of foreign investment in Catalonia is higher and undergoing growth. The explanation for this is because the type of foreign investment projects that happen in Madrid and Catalonia, in general terms, have historically been somewhat different. On the one hand, in Madrid we see many investments related to the financial and institutional sector that often are only shareholder changes with limited impact on new productive activities and job creation, although they have a significant impact on statistics; while in Catalonia what stands out are the more industrial and technological projects, both greenfields and new investments by companies already present in our economy that generate new activity and jobs. At Catalonia Trade & Investment we always look at the reasons foreign companies explain to us when they invest in Catalonia. They are various: the market, the existence of a primary client, a required supplier presence, the availability of local and international talent, the existence of know-how in a specific field or technology or the geostrategic position and logistics facilities. And the combination of these factors can be found in Catalonia, which offers a climate of trust and security for investments.Consider, for example, that fDi Markets of the Financial Times group has once again recognized Catalonia as the best region for investment in southern Europe, looking at criteria such as connectivity, business climate, economic potential, and the strategy for attracting foreign investment, as well as the human capital and lifestyle. It is the third time in a row that this ranking – one of the most prestigious internationally and used by multinationals to study future investment projects – places Catalonia in this position.

This year, ACCIÓ launched Catalonia Exponential. What are the main highlights of this program?

Due to the COVID-19 health crisis, as well as the global accelerated technological change that today's society is undergoing, companies are obliged to generate new value – over and above their daily activity – to become more competitive. Catalonia Trade & Investment, aware of this technological acceleration, launched the Catalonia Exponential initiative in January 2019, a completely organization-transversal initiative, with the aim of accelerating the innovation economy in Catalunya, giving support to companies to transform their business models to deal with external disruptions that threaten them and can be converted into opportunities. The Catalonia Exponential initiative expects to impact more than 500 Catalan companies in the next 3-4 years. To achieve this, various activities are being carried out to raise action such as awareness and awake activities, advisory services, financial support, and direct connection to disruption through our offices located in the most advanced ecosystems in the world (like Silicon Valley, New York, Tel Aviv or Seoul) as well as aligning with European Commission initiatives like the EIC – European Innovation Council. Catalonia Trade & Investment is not only offering those services to companies: more than 40 professionals of Catalonia Trade & Investment from different departments have already been trained with these methodologies to coach companies using them, as well as a contribution to Catalonia Trade & Investment's own transformation, and to walk the talk.

At the beginning of this year we discussed about your strategy being focused on digitalization and new ways to innovate, both locally and worldwide. Has this changed due to the pandemic and, if not, how is it progressing?

If the role of digitization and technological transformation was already fundamental at the beginning of this year, in a COVID-19 context it has become even more so. That's why, for example, we have doubled the aid to Catalan companies to incorporate technologies such as 3D printing, artificial intelligence, collaborative robotics, big data or 5G. This is the future: incorporating these technologies is synonymous with efficiency, more productivity, more capacity to adapt to changes that cause disruptions such as COVID-19. In short, an increase in the competitive advantages of the company, its productivity and resilience. This support is combined with the consolidation of the Catalonia Exponential programme and the promotion of international innovation by Catalan companies through agreements with leading international entities, such as the National Research Council of Science and Technology (NST), the main R&D entity in South Korea.

What is your primary goal for 2021?

To build the economy of the coming decades. Apart from having to face the complex situation we are experiencing, the pandemic caused by COVID-19 has accelerated some disruptive processes that had already appeared, such as digitization, technological transformation and the importance of sustainability. We are undoubtedly in one of the most profound times of change since the industrial revolution. Catalonia already had a fundamental role at that time. And we are sure that the ecosystem of companies made up of SMEs, startups, suppliers and multinationals in Catalonia will now play a leading role in overcoming this crisis better prepared and stronger than ever. Combined with a pioneering and class-leading health and biotechnology centre in Europe, the Catalan economy will be able to offer cutting-edge solutions to overcome this global health, economic and social crisis.