So, come on then, how is Spain going to get it’s unemployment down? Frankly, I’m surprised there aren’t riots in Madrid. They say there are 1,400,000 households in Spain where nobody has a job. How do people accept that? I know that people are angry with the government and will vote them out next year, but how can it be that the PP politicians receive a lower popularity rating than their PSOE counterparts?

What does Spain have to do to pull itself out of the crisis? In the sixties, emigration was generally uneducated labour - construction, hospitality, transport etc. This time it’s the highly skilled that are leaving, graduates, engineers and such like. Unlike the emigation in the sixties and seventies, I don’t think that many of the new emigrants will return. How can Spain attract foreign investment, attract industry, commerce etc?

Any ideas?

Good questions.

When building a country, the foundations seem to be: education, productivity, and finance. In Spain’s case, you might throw in tourism (2nd most popular destination in the world after France… wait, I stand corrected. It’s now the 4th most popular. Where’d China come from on that list??? I digress). Here are the industries where I’d see opportunity for Spain to step up to the plate and take a leadership position, bringing opportunities, and therefore jobs and business, back:

? High tech - Spain’s population is probably the most highly educated with the best access to entrepreneurial resources than any other Spanish-speaking country in the World. With over 800million Spanish speakers and growing rapidly, especially in the US, this is a key opportunity.

? Finance - Spain’s banking sector has survived and some of its banks are in a good financial position to continue to bring European investment to the booming economies of South America.

? Fashion - traditionally a Spanish strength, companies like Zara and Camper are growing quickly. The trick is get them to keep their manufacturing based in Spain… trickier, but with wages becoming more competitive and lots of unemployed to draw from, perhaps they’ll reconsider moving manufacturing to China.

? Food - considered to be the best food in Europe, Spain’s restaurants are the zenith of the industry worldwide. Now we just need a couple Jamie Olivers and Wolfgang Pucks to make it into a real industry to employ folks.

Bottom line is that Spaniards need to clean up their act, get confident and get out there and promote themselves. French entrepreneurs are traveling around the world, drumming up interest in the latest projects coming out of universities. I never see that from Spain.

If Spain really has all these excellent and talented companies and people why I ask are we not yet moving out of the recession and unemployment going down and not rising.
Many factors, firstly the blatant use of over optimistic professes by Zapatero to ensure his re-election in last last National elections, a slow an inadequate response to the crisis and a failure to implement real changes quickly.
I have started up 5 companies over my 25 years in Spain so can assure readers that the paperwork involved in set up and then running a company is large and costly, restrictive practise abounds.
The state educational system may produce graduates but we need many more youngsters with basic and practical skills, sadly those who do obtain these skills are now heading abroad to fullfill their ambitions.

This is because companies are fearful of expanding or employing more staff as the market is still shrinking, credit not available, and fixed costs are soaring.
Only an export led recovery, an improvement in the management of existing small and family owned companies, a willingness of both employers and staff to attend real re-training courses, not the false ones controlled by the unions.
How is it that a close Spanish friend, an excellent sales person, was sent on a TWO WEEK long course to learn English ! No follow up, and of course no English.
With huge cut backs due after the coming local and regional elections I see no quick end to the high number of un-employed, if the unions continue with their restrictive practices this will be of no help either.
My sadness if great as I see many ex employees, friends and families suffering the real consequence of political dithering with no real change in sight.
I ask the question, does Spain need a Thatcher style government and would it support it ?
I should add that I am recently retired so have only suffered the freezing of my Pension during this year

I’d agree. Unions are far too powerful in Spain. I’d say the single most important change that could be made would be to make it easier to fire or layoff employees. It strikes fear into the hearts of management to have to hire, knowing they might have to later fire someone at exorbitant cost to the company!

Don’t know about the Thatcher-style government (am not British) but certainly a government who was willing to work with business on implementing employment reform would be very helpful.

I have to say that the Thatcher government was very divisive and decimated many communities in the North of Britain, but with hindsight, the loosening of union power has been a good thing in the UK. By nature I’m more left of centre than anything, but would have to agree that Spain needs to change it’s labour laws. In my opinion, the last agreement a few months ago done nothing to ease unemployment, and I’d go to say that the unions’ stance, whilst aiming to maintain workers’ rights, actually harmed the unemployed. I would have to agree though with those commentators who say that these types of reform should have been done in times of growth, in times of hardship… well, things get harder.

As to where the problems stem, I’d say that is down to short-termism in Spanish politics. As far as I have seen there is little long-term planning, neither for education nor for industry. Spain needs to set it’s goals long term, 25 or 30 years down the line, with agreement between political parties, unions, educators, industry and social entities. It seems to me that the last time this type of consultation took place was with the writing of the constitution. Here’s the other side of the coin, though, the constitution was written post Franco and really hasn’t been touched since. The world has changed since then, and the rigidity of the constitution has held Spain back somewhat, some clauses make no sense at all; there is no right to dignified employment - nearly 5 million can testify to that, nor the right to decent housing.

My last two points may seem to contradict eachother, but a long term plan, reviewable now and again to take account of changes in society, technology etc.

Overall, I’ve come to the conclusion that some of the things that have drawn us ex-pats to Spain, things like the laid back attitude to authority, the siesta, the working hours etc, do Spain more harm than good in the global economy in which we live. It’s true that it’s no fun working in the heat of a midday Seville summer sun, but being in time with the rest of Europe economically, especially in Madrid, and the North would bring more gains than losses.

As for where Spain should be headed in the long term, well, yes the banking sector is strong globally - in Spain I’d say that it’s grossly inefficient at present, but in time…. Renewable energy is another sector where Spain has an opportunity to lead the world, the State should be looking to invest in R&D here and now. Spanish companies lead the world in roadbuilding, technically advanced and globally competative, Spain needs to nurture and encourage the companies in this sector. Although as yet the same cannot be said for rail networks (yet), with investment Spain could be dominant aswell. Spain produces a large number of highly skilled software designers, network engineers etc, but where are the opportunities in Spain?, How many Spanish software companies are there? Here is an opportunity that has to be investigated. Although it’ll be unpopular here to say that Telefonica is a model for Spanish industry, it is like Inditex (of Zara fame) a global player and leader in it’s sector and well worth studying it’s methods.

Spain has some great selling points to attract investment - great climate, quality of life, gastronomy, culture; things that attracted us, Spain needs to promote these attributes to industry to bring foreign companies to Spain, not just individuals. The thing that I do not understand is why our (Spain’s) politicians, industrialists, unions - everybody who has influence - haven’t - like two years ago - been finding out why other economies have weathered the crisis without such massive destruction of employment. Sadly though, I don’t think that their is the political will to set aside the back-biting to actually pull the country together. The PP will surely win the next elections, they say that they have the solutions to the crisis but don’t tell us what they are. If they have ideas, for the sake of the 5 million unemployed, the 1,4 million households where nobody has a job, for the future of my little boy, they should tell us what the solutions are NOW, and not wait for elections. I’ve got no faith however that they have solutions, or even understand very well the nature of the problem.

<< Rant Off >>

Katelyn, I’ll contact you on the web address you have given. Pleased to share my experiences.

On the P.P I’m sure they will give some strong indications closer to national elections, but not all as they, like I, fear that the average Spaniard doesn’t want to hear the hard truth. The Unions less than anyone, they seem to now be part of the Government and will oppose the P.P. with all the violence we have seen in earlier times.
Nevertheless I do meet many decent young company CEO’s, who if given half the chance would lead Spain forward but they are not going to wait for ever.  So many have opened up in South America or Asia and even other EU states, where they have been welcomed with open arms

Hi Katelyn, I’ve started a few businesses along the way as well. I’ll chat over twitter though.

We’re on the same page - to be more competitive, to reduce barriers to entry, Spain must take care to optimize the process of starting and building businesses. There’s no way around it.

Optionally, we can create businesses outside of Spain, then open a “branch” here. That makes things quite a bit easier as I understand, bureaucracy/visa/financing-wise.

It’s nice to see that the 15 Mayo group has finally set up a popular protest against the political class here. I wish them luck but it’ll need more than luck to get the politicians here to act as an efficient ruling class. I’ll be heading down to the Obelisco in a Coru?a on Saturday - the day of reflection - As the movement isn’t party based, I cannot see how they can stop the protest on Saturday. It’s good to see that it’s not only the young that are getting involved aswell.

dixon - 21 May 2011 02:24 PM

Some really great posts here. From experience the barrier to starting a small business here does nothing to promote entrepreneurialism. The minimum level of tax for the self employed means you need to be earning significantly from your start up just to prevent yourself from losing money.

Once you’re established, you’re fine… it’s just getting from points A to B in the meantime that’s the problem.

Never more so than when unemployment is high, should a government be looking to aid and support small and independent enterprise, actively encouraging people to work for themselves, or start small businesses.

I’m no expert and much bigger brains have placed good postings on this topic, but agree there has to be some changes to Spanish employment laws. 
We’ve had friends with great businesses who are struggling to keep up with the work, but terrified of employing someone in this country.
I also know of someone who is sueing their previous employer (who went bankrupt) as they never got their social security or tax paid officially, it seems there are bad employers also, and that there have to be laws and committments to employees, but not at the risk of your business failing…..

The key is the spanish employment laws and a need for investment in public services - ie. the Hoover dam was built during an economic depression in USA and led to the expansion of Las Vegas and Los Angeles. It gave a lot of jobs to people and created more jobs.
Its been interesting to read all the good postings on here, just thought I’d add my bit.