Is Spain a country of entrepreneurs?

The business history of Spain is determined by the leading role of its many nations and cultures (Phoenicians, Romans, Arabs, Italians and others), its laws, its leaders and the states that ruled them.

“The state has historically taken a leading role in developing business, sometimes helping, other times hindering the development of private initiative.”

The state has historically taken a leading role in developing business, sometimes helping, other times hindering the development of private initiative. In our recent history major corporations in our country have come from the public initiative. Some of them were created to develop industries that later on where privatized. Other business were supported through concessions or monopolies given by the state precluding the entrance of the private sector.

The joining of Spain to the European Union and its adaptation to their rules diminished the role of the State, allowing a more open and stable environment. This openness facilitated the development of private initiative resulting in many cases of successful private companies that have been able to compete in mature and highly competitive sectors, achieving sustainable success.

“The joining of Spain to the European Union and its adaptation to their rules diminished the role of the State, allowing a more open and stable environment.”

This recent favorable environment for private initiative is allowing its further development, but we are still far from other countries like the U.S., Israel and some E.U. neighbors.

Access to finance remains an issue in our country. Historically, funding sources for entrepreneurs have been very few and even more after the recent financial crisis. Neither banks nor the state nor the private sector financed entrepreneurial projects leaving personal heritage, friends and family as the only real sources of funding for entrepreneurs. But in recent years, the financial environment of low interest rates and market volatility, is creating an increased interest of private investors in alternative investments. There is also a growing interest in promoting access to finance for entrepreneurs and small businesses by the government, where much of the business community and potential for job creation and welfare is concentrated. Both private and public sectors are developing the venture capital industry, which has grown substantially over the last few years, giving greater access to entrepreneurs to finance their projects.

Now that the appropriate conditions are given to entrepreneurs in order to develop their projects, in a legal, tax, regulatory and financial framework as never before, we will see if Spain is a country of successful entrepreneurs.

In Spain the self-employed and micro family businesses account for almost 60% of employment, similar to that of many economies in the world which are based on a business network of freelancers and shopkeepers.

But how many small businesses were launched by necessity and how much by vocation? According to the annual report of GEM (Global Entrepenurial Montior) that monitors the global entrepreneurial activity, 17% of businesses that were created in Spain were by vocational entrepreneurs, the rest were undertaken by necessity (to find a way of living). As reflected by the data, the vast majority of businesses are created by motivations unrelated to the business itself. They are created primarily by a need to find a job or a living.

“The 17% of businesses that were created in Spain were by vocational entrepreneurs, the rest were undertaken by necessity.”

Therefore there are two types of entrepreneurs. Entrepreneurs by necessity, and the other type that we might call: “entrepreneurs by vocation”. “Entrepreneurs by vocation” are those who create a business motivated to solve, improve or update a problem or need. They are those that are formed properly and are not afraid to fail, innovate and go against the establishment. There are environments where it is more difficult to find entrepreneurs by vocation, as their environment penalizes failure, innovation, change… resulting in fear of failure and the uncertainty that changes may bring to the rest of the environment. But there are other environments where it is understood that failure is a personal and professional development phase and that in innovation and change is where progress and success relies.

“There are two types of entrepreneurs. Entrepreneurs by necessity, and the other type that we might call: “entrepreneurs by vocation”. “Entrepreneurs by vocation” are those who create a business motivated to solve, improve or update a problem or need.”

Spain, as the rest of the world, is changing rapidly. The environment in which we live today is much more conducive for an entrepreneur than before. Today we have better facilities, with a more stable and open regulatory framework, with increased access and diversity of financial instruments with competitive costs in a market with great infrastructure, within a larger market such as the E.U. and a changing culture that develops financial and business culture to be open to failure, change, uncertainty and personal initiative. Spain is a country of entrepreneurs, like many other countries that for different reasons, their people decide to undertake a personal project.

“The challenge of entrepreneurs in Spain and around the world is to ensure they add value by creating a business that is not motivated to solve a family or economical problem, but it is focused on solving, improving or updating a problem or a need, only this way they will become successful entrepreneurs.”