Barcelona is powerful, Barcelona has a lot of power, as Peret sang. And it is also attractive to companies. In recent weeks, Lidl has announced that it will begin managing its electronic sales with 250 employees from the Catalan capital, while Facebook, through CCC, will monitor fake news from the Glòries tower with a team of 500 people. Meanwhile, the Argentine satellite company Satellogic is to open its European HQ and create 100 jobs by 2020, while Australian firm Moodle is to make Barcelona its first HQ abroad and expects to create some 40 jobs.
In fact, there are more: computer giant Microsoft will debut a quantum lab in the city that will employ some 60 people, including engineers, physicists and mathematicians. Also, tech firm Chartboost has chosen Barcelona to open its European engineering office. The video game company set up by two Catalans has its main HQ in San Francisco and employs 120 people, apart from those who will work in the Catalan capital.
It is also well-known that Amazon, apart from opening its distribution centre in Prat de Llobregat, has opened a machine learning centre in the 22@ district and will in a year being employing 500 people in its support centre for SMEs in the south of Europe. Then there is the coworking spaces of WeWork, the video game giants IGG, King and Scopely, the new HQ of sunglasses firm Hawkers. All of these can be added to those firms that already had digital centres in Barcelona, such as Nestlé. These companies come here looking for talent and a business ecosystem devoted to the digital world that turns Barcelona into a point of reference in digital services in the south of Europe.
The CEO of Acció, Joan Romero, says that in the past few years a significant technological environment has built up and the city comes out well in the various startup rankings: "The sector is bubbling." And that means that talent likes to come to create activity in Catalonia: "These activities could have ended up anywhere, they are corporate, but they decide to come here for the existing ecosystem and the talent they find here."
Ecosystem and climate
Why Barcelona? Facebook chose Barcelona for its centre to fight fake news because it is a city that attracts international and multilingual talent, according to the social network’s vice president of Policy Development, Richard Allan, in a statement.
In the case of Stellogic, the head of its European HQ and the company’s Chief Data Scientist, Marco Bressan, says there are two key factors. The first is the ecosystem. "We look for artificial intelligence developers, work with data, engineers, etc. In Barcelona these things are already well developed thanks to the universities and research centres," he says, adding: "Three of Spain’s largest universities are here." What’s more, there are a lot of "companies and startups that use data science and that attracts others." And he adds: "We are interested in the existing ecosystem."
In agreement is the professor of Esade’s department of Operations, Innovation and Data Sciences, Esteve Almirall, who tells VIA Empresa that this is no accident. "We have one of Europe’s supercomputing centres, in photonics we have the ICFO, in medicine we have top level centres, while Catalonia leads the field in artificial intelligence. They are small things, because we are a small country, but they are very important. In the same way that here there are two of the most important business schools in the world: if you are in the UK, or China, or the US, it is no surprise, but here it is," he says.
Catalonia is an anomaly: "In terms of research we should be worse than Denmark or Begium, but we are better. We do not have the legal tools in Catalonia that they have in other countries to make the most of this, which is why it is an anomaly."
Barcelona is in fashion
The second reason is the city itself and its quality of life. "Talent is to be found all over the world, but we are interested in having teams nearby, which is why we want somewhere that easily attracts talent and a certain professional profile with postgrad degrees and doctorates, a place they would want to settle in and that is why Barcelona is attractive."
Almirall: "In Helsinki they work much better than we do, but if you are a US researcher, you don’t want to bring up your children in temperatures of 40 below zero"
Almirall recognises that Barcelona is fashionable and that means it can attract people from all over: "In Helsinki they work much better than we do, but if you are a US researcher, you don’t want to bring up your children in temperatures of 40 below zero." Barcelona is cool. "Barcelona is a cool city, like New York. Geneva has a lot of companies, but it is not a cool city. If you have to attract scientists from abroad, you need them to come and live here," says Almirall.
Satellogic had offices in Buenos Aires, Montevideo, San Francisco and Tel Aviv. Bressan has worked in France, Latin America and India. In all of these places the advantages are different, as are the problems: high prices, a lack of safety, an unwillingness among employees to move, a lot of turnover, a lack of talent. "In Barcelona the cost of living is still reasonable, as are labour costs, it is cosmopolitan, has a good climate and good connections," he argues. Yet, he points out that the biggest threat he sees is the rise in the cost of rent.
However, all this begs the question: are we a mine of talent and low salaries? The Esade professor says yes. "A computer engineer of the UPC earns between 20 and 30, while in San Francisco they earn between 60 and 100. The price of talent is extremely low." Is this the main reason?
Romero: "The costs are not the decisive thing, there will always be someone cheaper than us. Companies come for the differential value and the talent"
Romero disagrees. "We have 1,200 startups, some 16% are founded by people from abroad and 23% of the employees are foreign. In this group there is no difference in salary. It is not decisive. The most positive point is not the cost, it is the ecosystem. There will always be someone cheaper than us. When projects come here it is for the differential value and the right talent."
Decision making centres?
According to Romero, the most recent investments have a very important characteristic: "They affect the company’s decision making on a global scale. When a company opens like this it is in part opening a decision making centre," he says.
Before, investment was in production, then it was corporate investment -centralising certain operations, such as call centres- and now what is being created are centres of excellence in which certain decisions are made: big data, R&D, quantum, etc. "Amazon has opened a distribution centre, but it has also opened a research centre for machine learning, which helps to define the company line," says Romero.
Some come, others go
While global giants are coming, other companies are moving their HQs to Madrid, but why? According to Almirall, referencing professor Germà Bel, the process of the concentration of companies that need to be near the centre of power in Madrid is natural. "We are competitive on the global scale, the companies that depend on the official government gazette will end up being near to the state. And this process will accelerate," he says.
Almirall: "The companies that compete on a global scale do not need to be near the centre of power, Facebook and Google do not need to be near the Bank of Spain"
"The companies that compete on a global scale do not need to be near the centre of power, Facebook and Google do not need to be near the Bank of Spain," he continues. For the expert, Seat is a clear example, as "their cars are sold in Europe, if the conditions and labour are what they want, they won’t leave, they do not have to convince any bank or anyone else to look kindly on them." In short, "companies that compete globally are not sensitive to the places of power."
To attract this type of company to Catalonia, the professor warns that we need to create a critical mass of the population with studies in STEM -the academic disciplines of science, technology, engineering and mathematics. "It would be a lot easier to attract these companies, which bring with them quality jobs and which raise the country’s competitiveness."