By Linda Lawson
Due to its geographical position and value inside of the tourist industry, Spain is highly profitable for international trade and business. Besides economically engaging with the other countries that encompass the EU, Spain serves as a gateway with Latin America and the Caribbean thanks to a shared language and historical connections.
Spain holds a particular position as one of the top economies in the world. This is partly because of its location, finding itself between Southern Europe and North Africa. Additionally, it also has access to both the Atlantic Ocean and the Mediterranean Sea. As presented in “Invest in Spain”, this makes it a logistical centre and perfect place for outsourcing due to its cost-risk terms. The country stays connected through maritime ports, airports, and one of the highest speed railroads of Europe. Altogether, these characteristics make Spain a hotspot for tourism and trade.
As for today, it holds a spot as one of Europe's most attractive markets. After surviving a long recession, it now possesses a $1.4 trillion in gross domestic product (GDP) (Silver, 2020). Even with the hard impact that COVID-19 had in the country during the early months of 2020, it is open for business, and overall the economy has presented a gradual and steady recovery in most of its industries. During these last years, costs dropped and consequently had an impact on the productivity which increased. This is a direct result of the reforms done to the financial sector and labour laws. This makes now the perfect time to invest in Spain and take advantage of the market entry it has for Latin America and Africa. All of these aspects bring new expectations for the future of Spain. Now the country's panorama is attractive for immigrants and opens opportunities for locals.
When it comes to investing inside of the country, the purchasing power inside of Spain is higher than in other places inside of the EU. Its open economy increases competitiveness which has a direct effect on the growth of the imports and exports sector. Nowadays, according to “Invest In Spain”, around 43% of the exports in Spain are the result of the investment of foreign multinationals. This number is constantly growing since new export companies are accessing the market each day. Both local and multinational companies export or import in parts of the industry such as technology, cars or vehicle parts, refined petroleum, and pharmaceutical products as the Observatory of Economic Complexity (OEC) report stated. In 2016, the value of exports in Spain exceeded €63 billion. This contributed to their placement as the 11th greatest global exporter of commercial services (Invest in Spain, 2020).
This strong presence of far-flung companies besides fueling local businesses as local suppliers or service providers also increases exports. As expressed in the report of the “International Trade Administration”, investors from the United States (US) hold a significant percentage of shares in some of Spain's largest companies. It was mentioned by the Spanish Ministry of Industry that this accumulated investment was worth an estimated €64 billion in 2017. Taking into consideration only the US, they open throughout their investments around 163,000 people. As a result, this shows the notable role this type of commerce has within the economy.
It is clear that for the years to come, Spain will maintain its important position in the business industry. To open space within the market, it is also important to understand some factors about the way industries work in the country. This includes the creation of relationships between professional representatives, adding that personal touch that's characteristic of Spaniards. The dynamism this adds to the game, allows corporations, both national and international, to advance smoothly inside the global trade sector, bringing opportunities to network within the value chain.
Linda Lawson is an intern at M74 from Panama. She is based in Barcelona, Spain, where she studies Fashion Marketing and Communication at the Istituto Europeo di Design. Her plans for the future include working in public relations and consulting.
This article is the third in the Why? Series of introductions to M74's target markets.
The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.