In an exclusive interview, this executive spoke to Iberian Property on ICEX’s role and, particularly on the «commitment to the international expansion of the Spanish economy on two fronts: diversifying the markets where our corporations operate and attracting Foreign Direct Investment to our country», recalling that «collaboration with the real estate sector is fundamental» to implement this strategy.
How has ICEX–Invest in Spain evolved over the years?
ICEX-Invest in Spain has spent more than 15 years helping foreign companies establish themselves in Spain. Throughout this period, we have offered an extensive range of services that have expanded and adapted to new challenges.
Currently, we are not only helping attract new investment projects to Spain but also work to attract talent and innovation, thanks to the implementation of new programs like Rising Up in Spain and Fondo Tecnológico Inteligente. Both of these factors are fundamental to our strategy.
Another element where we are increasing our focus is Aftercare. This involves accompanying the companies already established in Spain so that, in a more complex international economic scenario such as this one, the subsidiaries of foreign firms in our country continue to consider Spain an excellent ally for their business.
Finally, ICEX-Invest in Spain, affiliated with the Secretary of State for Trade and Tourism, is in a unique position to connect with the autonomous regions and our network of Spanish Economic & Trade Offices abroad. From that position, maintaining close contact with corporations, we are developing the Policy Advocacy with other administrative entities to generate investment projects and improve the business climate in Spain.
What are the sectors that carry the most weight in your activity?
At the moment, ICEX-Invest in Spain is working with ten priority sectors: renewable energies, Information & Communications Technologies (ICT), life sciences, agri-food sector, automotive & mobility, aerospace, logistics & transport, tourism & leisure, the audio-visual industry and chemical industry. Furthermore, in every industry, at ICEX-Invest in Spain we focus our interest on projects that produce high added value, attract quality jobs and present an inclusive and sustainable growth model.
In this sense, entrepreneurship, innovation and sustainability are the pillars with which we want to help drive the growth of the Spanish economy.
What role does ICEX-Invest in Spain play in attracting foreign investment to Spain? And to the real estate sector?
ICEX-Invest in Spain stands out because we bring value to the investment process for any entrepreneur interested in investing in Spain. For this, we have a team that specialises in the Spanish market and provides customised support and consulting on business opportunities, tax and labour legislation, immigration, public subsidies and incentives and, overall, any practical aspect of living in Spain. We offer market intelligence so that potential investors can make decisions based on the best information possible.
Identifying locations to implement foreign investment projects is one of the services we provide that corporations most value. Therefore, the real estate sector is also strategic to our operation, since it provides information about supply and the availability of different types of spaces, which is key to the decision-making process in any of the sectors we work with. Consequently, our collaboration with the property sector is fundamental, especially for the purpose of developing value proposals that meet the investment and reinvestment needs of foreign companies. Thus, the work we develop is complementary to the work carried out by the industry through its international network and, at the same time, positions Spain as an attractive destination for real estate investment.
In order to drive and attract investment, ICEX-Invest in Spain actively collaborates and participates in multiple seminars on the business panorama in Spain and professional events in the property sector on an international level, such as the Iberian Property Summit in London in the last two years.
What has been ICEX-Invest in Spain’s main priority since the beginning of the pandemic?
Since the onset of this crisis, we have strived to be part of the solution. Under the slogan “Don’t stop, ICEX is with you”, we developed the 2020 Action Plan, digitalising the services we offer and adopting a flexible focus to help companies maintain their production activity as much as possible and avoid disruptions in the production chain.
One of the key aspects in our activity involves reducing the uncertainty generated by the health crisis and its impact on the economy. For this, we have maintained close communication with the players involved in attracting and retaining investment: network of economic and trade offices, regional directorates of the Secretary of State for Trade, autonomous regions, as well as the chambers of commerce of third countries in Spain. And we have reinforced our support and guidance to companies who were considering Spain as an investment destination when the pandemic erupted, to help them bring their projects to a successful conclusion.
During this period, the collaboration with other similar entities that attract investment has also been extremely important, to share an analysis of the situation and the best practises to face the external shock that is taking place.
What has been the impact of the pandemic on foreign investment in Spain?
The COVID-19 emergency has had an intense impact on key economic indicators on a global scale. According to UNCTAD, foreign direct investment dropped 49% worldwide in the first semester of 2020. This decline was especially evident in developed economies which, during the first semester of the year, received approximately 98 billion dollars in FDI, only one quarter of the figure received in the first semester of 2019.
Spain also registered a drop in foreign investment, although not as intense as was observed in other countries. According to data by the Foreign Investment Register (RIE-Registro de Inversiones Exteriores) of the Ministry of Industry, Trade & Tourism, foreign investment in Spain for S1 2020 dropped 37.6% compared with the same period in 2019. Nonetheless, most of this decline was accumulated during Q1 2020.
In Q2 2020, foreign direct investment displayed an encouraging upturn. The gross FDI received in Spain in Q2 2020 reached 4.64 billion euros and grew 75% compared with the same indicator in the first three months of the year. Most importantly, this number was approximately 8.2% higher than in Q2 2019.
These figures seem to indicate that, following the initial negative impact of the COVID-19 pandemic, investors resumed their operations in Spain, reflecting the confidence of corporations in our country’s macroeconomic fundamentals.
The data provided by FDI Markets regarding greenfield projects presents the same trend. In Spain, between January and August 2020, a total of 329 greenfield projects took place with foreign capital, 42% less than the previous year. Nonetheless, despite this and given the widespread global decrease in greenfield projects, Spain was the fifth-largest recipient of greenfield projects in the world in the first eight months of the year.
Will the internationalisation of Spanish businesses be vital to the recovery of the country’s economy?
In the current scenario, ICEX is committed to the international expansion of the Spanish economy on two fronts: diversifying the markets where our corporations operate and attracting FDI to our country. We are convinced that, like in the 2008 crisis, internationalisation will be part of the solution for this extremely complex economic situation the world faces. In our search for new markets, ICEX will continue to guide the corporate fabric in its international expansion process with new programs and new tools adapted to the new challenges that lay ahead. Accordingly, on 17 November, the Minister for Industry, Trade & Tourism and the Secretary of State for Trade announced the launch of the platform #Juntosmaslejos (Together, Further) in collaboration with CEOE and the Spanish Chamber of Commerce, to provide Spanish companies with tools and services that can help them find business opportunities in foreign markets.
Once we are on the other side of this crisis, what do you think the economic recovery will look like?
The indicators available at the moment show that the Spanish economy is in a recovery phase. Since last May, the Spanish GDP resumed an intense growth that has persisted until now. In the third quarter of the year, within an atypical setting that is still marked by relapses and the absence of international tourism, the Spanish economy has grown more than 16%, substantially surpassing the Government’s forecast of 13.5%.
Nonetheless, it is very difficult to make economic predictions in these circumstances. These must be presented with great prudence and caution because the situation remains extremely volatile, and there are still various elements that increase the uncertainty of the current economic scenario.
Considering this uncertainty and a health crisis that has no precedent in the recent history of the European Union, the response must bring certainty and stability. That is why, the strong and unanimous commitment from the entire EU to provide a common response that is proportionate to the challenge we face has been key to mitigate the crisis impact.
What are ICEX’s key strategic goals for the upcoming months? And for 2021?
The new ICEX 2021-2022 Strategic Plan, in close coordination with the Action Plan of the Secretary of State for Trade, will support growth in the number of regular exporting companies, market diversification, an increase in the added value of our exports and the attraction of talent for international expansion. All of this, while driving sustainability and the digital transformation of corporate projects undergoing internationalisation.
In terms of attracting investment, we will develop new hight value – add projects for production implementation, focusing particularly on an investment retention strategy, thereby consolidating Invest in Spain’s role as a leader that helps improve the business climate in Spain.
Therefore, in 2021 ICEX will keep working to ensure that the international expansion of our economy drives an increase in potential GDP and sustainable job creation and that foreign direct investment restores the country’s pre-COVID-19 growth trajectory.