#BIOSPAIN2023 Interview | "Entrepreneurial activity in Spain is lower, but more resilient than in other countries"

The latest GEM Spain Report 2022-2023, prepared by the Entrepreneurship Observatory of Spain, highlights that recent entrepreneurial activity (TEA) in our country has managed to recover to pre-Covid-19 pandemic levels. In this way, we see that in 2022, 6% of the Spanish adult population is starting a new business project with less than three and a half years of existence. The percentage of people with an intention to start a business in the next three years, 9.4%, is the highest since 2012.

The entrepreneurship landscape in Spain as presented in the mentioned report reveals some noteworthy aspects, such as the entrepreneurial vocation of highly educated women and the increase in technological proficiency. The service sector continues to represent the majority of entrepreneurship in Spain, so expanding this entrepreneurial character to other sectors is one of the challenges we face.

A challenge in which Spain Up Nation, an initiative of the Government of Spain that encompasses the efforts of various entities to highlight Spain's entrepreneurial capacity, plays a crucial role. Among its key principles, the work of ENISA is to promote funding for viable and innovative business projects of Spanish SMEs, fostering diversification of their sources of financing. Public-private collaboration is essential in this path, and the biotechnology sector is gaining increasing relevance.

This is a scenario that Spain Up Nation will analyze at BIOSPAIN 2023, the international reference event in the biotechnology sector, in collaboration with ENISA, CDTI, and ICEX-Invest in Spain. As the platinum sponsor of the event taking place in Barcelona from September 26 to 28, it will delve into Spain's entrepreneurial capacity under this initiative. To gain a deeper understanding of this work, we spoke with José Bayón, CEO of Spain Up Nation.

AseBio. What is the current snapshot we observe of Spain in terms of entrepreneurship?

José Bayón. It's a picture with brightness, a lot of strength, and reflects a country where the digital economy, closely linked to entrepreneurship, already accounts for approximately 23% of the national GDP. This has a lot to do with public policies and collaboration with the private sector, which have been decisively promoted in recent years. It's a partnership that must continue to strengthen Spain.

Additionally, I would like to mention the GEM Spain Report 2022-2023, supported by ENISA, which shows how Spanish entrepreneurial activity is returning to pre-pandemic levels, surpassing the economies of our surroundings. Furthermore, investments in startups in Spain have multiplied by five in recent years. Never before has there been such a significant boost to the ecosystem as there is now.

The public policy in recent years has been based on the transformation of the production model around the two major drivers of change in our time: ecological transition and digitalization (investing, for example, €20 billion in the latter by 2025 through Spain's Recovery, Transformation, and Resilience Plan). This amount marks a milestone as it represents a 30% increase in resource volume for the first time.

AseBio. In which sectors are the best figures being recorded?

José Bayón. I'd like to talk about our loans as benchmarks for what we see. With that said, of the 7,581 loans that are under monitoring, signed, and disbursed, the sectors, from highest to lowest weight and percentage, are as follows: 2,370 in ICT (31.26%), 1,821 in Other Services (24.02%), 840 in Manufacturing Industry (11.08%), 804 in Trade and Vehicle Repair (10.60%), 335 in Professional, Scientific, and Technical Activities (4.41%), and 284 in Biotech (3.74%). The rest are spread across other sectors such as education, hospitality, or the supply of electricity, gas, steam, and water. It's important to note that in the so-called ICT sector, due to the cross-cutting nature of digitalization, many companies are included that may also affect or could be included in other sectors. Similarly, I want to highlight the significant importance of the biotechnology, science, and health sector in our portfolio, whose percentage in terms of amount is even higher than the aforementioned one in terms of the number of companies.

AseBio. In the last two decades, the number of biotechnology companies in Spain has gone from just over fifty to nearly 900. According to the AseBio 2022 Report, an average of 48 biotech companies are created each year in our country, with a business landscape dominated by SMEs and micro-enterprises. What scenario do you observe regarding investment in the Spanish biotechnology sector?

José Bayón. I would say it's a thriving sector, strongly rooted in science and technology, and therefore synonymous with growth, innovation, the creation of quality employment, and progress in all aspects. It's a sector that is undergoing a rapid modernization process. I also believe that within the framework we are operating in, which aims to accelerate the digitalization of companies, with a particular focus on SMEs and startups, and create favorable conditions for the emergence and maturation of technology-based startups until 2026, this thriving scenario will continue to grow. Spain must drive large disruptive projects that bring about profound changes in the structure of its strategic sectors, and the biotechnology sector is undoubtedly one that is also interconnected with others such as agri-food and healthcare.

AseBio. What are the main barriers you identify when it comes to entrepreneurship in Spain?

José Bayón. While it is true that entrepreneurship levels have increased, I believe there is still a need for more support, particularly from education. I mean reinforcing and learning from an early age that entrepreneurship is a form of employability and, beyond that, also a valuable attitude in any job role.

Contrary to what it may seem, the gap that existed in the past due to a lack of financing is not the primary problem now, at least in the initial stages. There are many doors to knock on, and most importantly, public administrations that offer the necessary support network. Our funding has continued to grow, not only in terms of amount but also in expanding to critical sectors due to their contributions.

So, I repeat, I believe we need to accelerate in the education aspect, which is crucial, and in the case of the biotech sector, it's also linked to STEM professions. This is very important because our country's future is at stake. We need to boost the number of young entrepreneurs to maintain an entrepreneurial profile with a similar trajectory to other countries.

In a world that is moving faster and faster, thanks in large part to advances driven by digitalization, we need to step on the accelerator so that younger generations see that job opportunities are becoming increasingly technological. If predictions hold true, by 2025, 45% of jobs will be related to digital environments. However, this situation is also expected to leave around 900,000 job positions unfilled in Europe according to various estimates.

AseBio. In terms of entrepreneurship, how does Spain differ from our European neighbors?

José Bayón. I'll answer based on the data from the GEM Report because the highlighted indicators are essential to explain how entrepreneurial activity in Spain is lower but more resilient than in other countries, with the lowest closure rates in its reference group. In this regard, during the pandemic years (2020-2021), Spain positioned itself as one of the European countries where entrepreneurs coped better with the period of uncertainty, maintaining established businesses and avoiding the closure of entrepreneurial initiatives. However, in 2022, there is a purification of companies in the consolidation phase. The percentage of entrepreneurs leading established businesses decreases slightly compared to the previous year, reaching 7%, a level equal to that of 2014, and business abandonment increases to 2.5%. However, the rate of the population that definitively closes the business is 1.5%, meaning some individuals abandon one activity to start another, while other entrepreneurs resume their previous initiatives.

This reflects a healthy entrepreneurial dynamic with growth potential. Autonomous communities with larger populations and concentrations remain the most favorable environments for entrepreneurship. At the European level, Spain is still slightly behind its reference countries in terms of the recent entrepreneurship rate (TEA). However, the business closure rate is the lowest in its group, and in terms of the number of startups, we are the fourth country in the eurozone, solidifying these countries as a favorable environment for the survival of entrepreneurial initiatives.

The motivations for entrepreneurship in Spain continue to be less ambitious than in other countries and have been negatively affected by the pandemic years. In 2022, three out of four entrepreneurs still stated that they were starting a business to make a living because jobs are scarce, although the percentage of entrepreneurs considering other reasons such as making a difference in the world or creating wealth is gradually increasing. Although men remain more motivated to create wealth through their entrepreneurial initiatives than women, female entrepreneurs maintain the motivation to make a difference in the world, which has not decreased in the pandemic years as in the case of men.

AseBio. What are the main short-term and long-term goals and challenges you highlight from Spain Up Nation?

José Bayón. I'd like to connect the question to the implementation of various regulatory changes, particularly the Startup Law, which we consider highly relevant not only to position our country as a nation for innovation and work but also because it will facilitate a ripple effect: the creation of new startups and existing companies that are ready to scale up. With the mandate we have received as a certifying institution for emerging companies and as responsible for promoting the new Spain Up Nation brand, we aim to demonstrate to the rest of the world that our country is a great place to start and invest in businesses. We are increasingly aware of our role as agents of change.

Until 2026, the challenge is to accelerate the digitalization of companies, with special attention to SMEs and startups, and create favorable conditions for the emergence and maturation of technology-based startups. The digital transformation of strategic sectors also has the potential to contribute to ecological transition and generate a pull effect on employment, economic growth, productivity, and innovation in the business fabric and society as a whole, fostering collaboration between institutions of different nature and scope.

AseBio. What are your expectations for BIOSPAIN 2023?

José Bayón. As always, we expect to witness the excellent exchange of ideas and the presence of the best talent, which BIOSPAIN is known for. It is undoubtedly a sign of a bright future that is on par with the country we live in, and it has nothing to envy from others. BIOSPAIN represents the best company.