Barometer of the Business Climate in Spain 2011 results
Index Presentation 3 Executive Summary 5 Background 7 General results 9 4.1. Overview 10 4.2. Main strengths and weaknesses 11 4.3. Comparison 2010-2011 12 4.4. Main areas for improvement 13 Foreign companies prospects in Spain 14 5.1. Investment prospects 15 5.2. Employment prospects 16 5.3. Turnover forecasts 17 5.4. Export forecasts 17 Results by areas 18 6.1. Labour market 19 6.2. Taxation 20 6.3. Regulatory environment 21 6.4. Infrastructures 22 6.5. Costs 23 6.6. Credit 24 6.7. Human capital 25 6.8. Innovation 26 6.9. Size of market 27 6.10. Quality of life 28 Methodology 29 Annex 1 30 Index 2
Presentation Presentation 3
1. Presentation 1. PRESENTATION This edition of the Barometer of the business climate in Spain from the perspective of the foreign investor is the fifth to be published, having firmly established itself as a flagship publication within Spain. The 2011 edition details the assessment of and importance given to the business climate in Spain by over 300 foreign companies. This allows us to identify the strengths that need to be maintained and the main areas for improvement that will require the most attention. The overall rating of the 2011 Barometer is very similar to 2010 s, with practically the same results from the survey as last year, although there was a slight drop in the importance section rating. Looking at the trend over the past four years, there has been a significant drop in the rating, a fact that should be seen within the framework of the economic crisis which has lasted since 2008. The Barometer has been jointly conducted by INVEST IN SPAIN and the INTERNATIONAL CENTRE FOR COMPETITIVENESS (ICC) at the IESE Business School. INVEST IN SPAIN is the Government agency dedicated to promoting and attracting foreign investment, part of the State Department for Tourism and Trade of the Ministry of Industry, Tourism and Trade. Its mission is to promote, attract and maintain foreign investment in Spain, as well as reinvestment from established foreign companies, serving as a reference point for foreign investors and point of contact for all state, regional and local institutions engaged in promoting and attracting investment. El IESE (the Institute of Further Business Studies) is an educational institution dedicated to the teaching of further business studies. The ICC is one of its research centres, whose mission is to promote scientific knowledge and rigorous learning in the area of competitiveness and its implications in a number of different fields. Led by Professor Antoni Subirá and set up in collaboration with the Institute for Strategy and Competitiveness under Professor Michael Porter at the University of Harvard, the ICC places special emphasis on the European Union and creating a favourable business climate. Presentation 4
Executive Summary Executive Summary 5
2. Executive Summary 2. EXECUTIVE SUMMARY Spain s overall rating is little changed from 2010 The results of the Barometer of the Business Climate in Spain 2011 are very similar to those obtained in 2010. Within an evidently negative international environment, investors continue to rate Spain similarly to last year (an average rating of 2.9 in both 2010 and 2011). The highest-rated areas are Infrastructures, Costs, Quality of life and Human capital Foreign investors have said that the areas they rate highest in Spain are infrastructures, costs, quality of life and human capital. Their opinions have enabled us to identify the areas where investors believe there is room for improvement. Areas highlighted as priorities include the labour market, credit and innovation. As far as the labour market is concerned, investors have requested reforms which would make the employment market more flexible and reduce labour costs, particularly redundancy costs. With respect to credit, investors have appealed for greater availability, both in terms of public and private credit. They also feel that investment incentives and subsidies should be improved. In the investors opinion, improvements could also be made in the field of innovation, such as the availability of researchers and incentives and subsidies for R+D+i. Forecasts for 2012 are positive in areas such as investment, turnover and export volume, showing an improvement over this year The general assessment of foreign investors in terms of forecasts for 2012 is very positive, with a definite improvement noted with respect to 2011. Investment perspectives are significantly better than for 2011, with a notably high percentage of companies expressing their intentions to increase investment next year. There has also been an important reduction in the percentage of companies forecasting further staffing cutbacks, a very positive indication. As far as export volume is concerned, greater value than last year was noted, which would seem to indicate that from an investors perspective, the forecast for the coming year is better than it was for this year. The forecast for turnover is also extremely positive, with a very high percentage of companies expecting increased figures with respect to this year. Executive Summary 6
Background Background 7
3. Background 3. BACKGROUND Foreign investment in Spain: Evolution throughout 2010 After 2009 saw a sharp drop in foreign direct investment (FDI) on a worldwide level, the situation began to recover last year, increasing by 5% to US$ 1.24 trillion, according to figures published by the United Nations Conference for Trade and Development (UNCTAD). 2010 also saw further improvements in the dual performance of emerging and advanced economies as recipients of investment, with the amount received by the former - representing over 50% of world FDI - increasing by 12% in contrast to the slight decrease of 0.1% in the case of the latter. According to UNCTAD, the flow of FDI should continue to grow throughout 2011 to stand at between US$ 1.4-1.6 trillion. This upward trend is expected to continue in 2012 and 2013, when it will reach approximately US$ 1.9 trillion. In 2010, FDI in Spain - according to UNCTAD figures - increased by 177% to stand at US$ 25 billion. Spain s quota of total foreign investment worldwide reached 1.89%, making it the 14th largest recipient of investment flow. According to data from the Foreign Investment Register at the Ministry of Industry, Tourism and Trade, FDI inflow also showed signs of recovery in 2010, with growth of 41.5% to reach 23.4 billion. In the first quarter of 2011, FDI inflow was 114% up on 1Q 2010, although 42% less than the first quarter of 2009. Foreign companies play a crucial role in the Spanish economy. There are currently 12,000 foreign businesses operating in Spain, employing 1.3 million people. These companies are also essential to Spain s balance of trade due to their evident profile as exporters, and, equally relevant, they play a key role in modernising and revitalising the Spanish business sector, bringing in activities which represent great added value as well as a high technological content. The continued low interest rates worldwide, positive business results and the strong growth of emerging markets should all help to boost international investment operations in 2011 and 2012. We should however stress that there are still risks attached to FDI recovery, such as finding a solution to the European debt crisis, fiscal imbalance in the United States or possible overheating that has been detected in the growth of principle emerging countries. Background 8
General results General results 9 Barómetro del clima de negocios en España, Resultados 2010 Introducción 9
4. General results 4. GENERAL RESULTS 4.1. Overview Figure 1 shows the level of importance and rating that foreign investors have ascribed to each of the 10 areas covered by the Business Climate Barometer 2011. The areas that have the greatest importance for foreign investors are those relating to Human Capital and Market Size, as they were last year. These were closely followed by Costs and Infrastructures, with the least relevant area deemed to be Innovation. The areas that were given the highest rating by investors were those relating to Infrastructures, Costs and Quality of Life, slightly increasing with respect to last year. Among the aspects given least importance are the Employment Market and Credit, which a significantly lower than last year. Nevertheless, this should be seen within the context of the current global financial crisis. The areas in which the differences between the rating they are given and their importance to foreign investors are Human Capital and Market Size, closely followed by Labour Market and Regulatory Environment. Quality of Life and Infrastructures obtained an almost identical rating and importance, perfectly meeting the expectations of investors. Figure 1 Labour market Importance and ratings by areas 2011 Quality of life 5 4 3 Taxation Innovation 2 1 0 Regulatory environment Human capital Infrastructures Market size Costs Importance Financing Rating General results 10
4. General results 4.2. Main strengths and weaknesses Spain s main strengths in the opinion of foreign investors are shown in Figure 2. The strengths highlighted include high-speed rail links, airports and roads as key elements of the country s infrastructure. The quality of business schools, cost of transport and leisure and culture also stand out as highly valued areas, all rated considerably higher than in 2010. The weaknesses that the investors highlighted are displayed in Figure 3. The speed and efficiency of commercial courts was given the lowest rating of the whole barometer, further down on 2010, clearly setting it apart as Spain s greatest weakness. Redundancy costs are also rated low, constituting one of the main improvement priorities in the investors view. Nevertheless, with the exception of redundancy costs, the main weaknesses correspond to areas identified as not having great importance to investors. Figure 2 Main strengths High-speed train Airports Business school quality Highways Transport costs Leisure and culture 3.35 3.4 3.45 3.5 3.55 3.6 3.65 3.7 3.75 3.8 Figure 3 Main weaknesses Speed and efficiency of commercial courts Alternative stock market Total public R+D+i spending Business angels Redundancy costs Mutual guarantee company 2.1 2.15 2.2 2.25 2.3 2.35 2.4 General results 11
4. General results 4.3. Comparison 2010-2011 In general there is a great similarity between the 2011 and 2010 results, with an average rating that is practically identical. As can be seen in Figure 4, there is no significant variation in assessment, with the results from both years quite similar. It is worth highlighting the increased rating for Infrastructures, Costs and Human Capital, with results improving in almost all aspects. Three factors have contributed considerably to these increases: the high speed train network in the area of Infrastructures, the cost of electricity in the Costs field and the availability of skilled labour in the Human Capital area, all of which rose a quarter percentage point with respect to 2010. In other areas such as the labour market, the regulatory environment, market size and credit, there were slight falls, whilst in fiscal matters, innovation and quality of life the situation is practically the same as last year. Figure 4 Comparison of ratings 2010-2011 Labor market Taxation 2010 2011 Regulatory environment Infrastructures Costs Credit Market size Human capital Innovation Quality of life Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones 10. 0.0 0.5 1 1.5 2 2.5 3 3.5 4 General results 12
4. General results 4.4. Main areas for improvement The priority areas of action have been selected based on the size of the gap between the importance investors attribute to them and the rating they have awarded them. It should be pointed out that the first positions are identical to last year, meaning that they clearly continue to be areas requiring action. This year the size of the local Spanish market, the flexibility of working hours and the speed and efficiency of commercial courts also appear as areas requiring attention. 1. Language skills As was the case last year, the expectations of foreign investors have not been met. They consider language skills to be the most important investment aspect, and yet it is an area which holds one of the lowest ratings. It constitutes the main area in which action needs to be taken given that the situation is seen to have actually worsened with respect to 2010. 2. Assumption of responsibilities and objectives This is the second most important aspect of the whole survey for foreign investors. Whilst its importance was slightly down on 2010, the rating it was given was also lower, meaning that it is still an area that should be considered a priority for improvement. 3. Redundancy costs Redundancy costs represent one of the main concerns for investors. It continues to be the third most important priority, as it was last year, although this year it received the second lowest rating of the whole survey. This area is also highlighted in prestigious international indexes such as the Competitiveness Report from the World Economic Forum, which also situates Spain in a very poor position. 4. Adaptation of labour law to the needs of the company This aspect was given a low rating, although somewhat better than last year. However, investors give this aspect great importance, making it an area requiring urgent action. 5. Size of local Spanish market Assessment of the size of local Spanish market has dropped considerably compared to the 2010 rating. It represents one of the most important aspects for investors, greater even than in 2010, whilst the rating is lower this year. 6. Flexible working hours The rating given to this aspect is one that has fallen most with respect to last year. The importance that investors give this aspect has increased, making it another area requiring action. 7. Speed and effectiveness of commercial courts Once again this is an area that continues to concern investors in Spain. The situation has improved slightly compared to last year, although it continues to be an area for priority action. General results 13
Foreign companies prospects in Spain Barómetro Barometer of del the clima Business de negocios Climate en in España, Spain, Resultados 2011 results2010 Introducción Foreign companies prospects in Spain 14
5. Foreign companies prospects in Spain 5. FOREIGN COMPANIES PROSPECTS IN SPAIN 5.1. Investment prospects Foreign companies investment forecasts are very positive. Figure 5 shows an increase in the prospects for increasing investment compared to 2010 of more than 10 percentage points. There has also been a 13% reduction in the number of companies that expect lower investment in 2011. Figure 6 shows that more than half expect that investment will fall be less than 5%. Figure 5 Investment comparison 2010-2011 Figure 6 Planned investment 2011 60% 2010 2011 60% over 50% between 25% and 50% 50% 43.69 46.55 50% less than 25% 40% 37.24 40% 30% 26.96 29.35 30% 20% 16.22 20% 10% 10% 0% Increase Maintain Decrease 0% Increase Maintain Decrease Foreign companies prospects in Spain 15
5. Foreign companies prospects in Spain 5.2. Employment prospects Employment prospects are also better in 2010. Figure 7 shows an increase in expectations for staffing levels. Figure 8 shows in greater detail the forecast in terms of the number of employees per company. It is worth highlighting the fact that there is a considerable decrease in the number of companies at are seeking to further reduce their workforce, with over 90% of these businesses expecting cuts of less than 25%. Figure 7 Comparison of staff numbers 2010-2011 Figure 8 Planned staff numbers 2011 60% 50% 2010 2011 50.85 52.27 60% 50% over 50% between 25% and 50% less than 25% 40% 40% 30% 20% 21.36 28.10 27.80 19.64 30% 20% 10% 10% 0 Increase Maintain Decrease 0 Increase Maintain Decrease Foreign companies prospects in Spain 16
5. Foreign companies prospects in Spain 5.3. Turnover forecasts Expectations for 2011 are extremely positive, with almost 60% of companies forecasting an increase in earnings whilst less than 10% expect them to shrink. Furthermore, of those companies forecasting reduced turnover, only 2.7% expect the fall to be greater than 25%. In comparison to 2010, the situation has notably improved as the number of companies expecting lower turnover has dropped by half. Figure 9 Turnover forecast 2011 60% 50% over 50% between 25% and 50% less than 25% 40% 30% 20% 10% 0 Increase Maintain Decrease 5.4. Export forecasts As far as export volume is concerned, 40% of companies surveyed expect to increase or maintain their export volume whilst 50% forecast no change to current levels, both of which are very positive figures. These percentages are slightly higher than those for 2010, where increased investment expectations rose from 30% to the 40% noted in this year s survey. Figure 10 Expected export volume 2011 60% 50% over 50% between 25% and 50% less than 25% 40% 30% 20% 10% 0 Increase Maintain Decrease Foreign companies prospects in Spain 17
Results by areas Results by areas 18
6. Results by areas 6. RESULTS BY AREAS 6.1. Labour market There are evident problems with the labour market in the opinion of foreign investors. Redundancy costs and flexible working hours have been highlighted earlier in this report as the main areas of action; however, in almost all areas, significant discrepancies can be seen between the importance to and rating given by investors (see Figure 11). With respect to 2010, there has been a general decrease in the rating of the aspects that make up this area, with only redundancy costs and geographical mobility showing higher ratings than last year. The flexibility of working hours has been the aspect that has most decreased compared to the past year, closely followed by speed of visa processing in order to attract staff. The overall importance of the labour market continues to carry significant weight on the Business Climate Barometer, albeit slightly less than in 2010, making this area one where work is still required. Figure 11 Labour market Redundancy costs Adaptation of labour laws to the needs of the company Working hour flexibility Employment incentives and assistance Operation of the current collective bargaining system Geographical mobility Ease of visa processing to attract labor Ease of work and residency permit processing Assessment of Spain Importance for Your Company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones 10. Results by areas 19
6. Results by areas 6.2. Taxation As far as taxation is concerned, foreign investors believe that measures should be implemented to reduce Corporation Tax and Value Added Tax (VAT). It is also worth highlighting the positive rating given to the usefulness of double taxation agreements and taxation on non-residents. In general, results are very similar to 2010. There has, however, been a sharp drop in the rating given to the VAT burden and other special taxes on products and services (which has to be seen in the context of the recently approved increase in VAT from 16% to 18%). There have also been two significant increases in the ratings given to corporation tax and social security contributions per worker. Figure 12 Taxation Worker contributions to Social Security Corporate Tax Burden VAT burden and other special taxes on products and services Usefulness of double taxation agreements Taxation of non-residents Assessment of Spain Importance for Your Company 0 1 2 3 4 5 6 Additional question Have the VAT increases in the past 12 months affected demand for their products/services in Spain? 50% 5% 32% 13% Yes, very high Yes, moderately No I don't have enough information This additional question sought investor opinion with regard to recent VAT increases. Half the investors surveyed replied that they had not noticed a significant influence, whilst the other half felt the opposite. Among those investors who said that demand for their products has been affected by the higher VAT rate, approximately two thirds considered the impact to be moderate, whilst the other third felt it had had a great impact. Results by areas 20
6. Results by areas 6.3. Regulatory environment As far as the regulatory environment is concerned, various areas of improvement are needed, especially in matters relating to the speed and efficiency of commercial courts, the bureaucratic burden on the company and the stability of the regulatory framework. There has been a significant drop in the assessment of practically all aspects in this area, even where the importance given by investors has increased. However, although the rating given to the effect of the underground economy on the businesses of those questioned is down on 2010, investor expectations are still being met. The only aspect showing an increase in this area is that of the bureaucratic burden on the company, although there is still a considerable difference between the rating given by and the importance to the company. In general, this area is one where investors have the greatest difficulties, requesting reforms such as the standardisation of regional regulations, a stable regulatory framework and greater control over tax fraud. Figure 13 Regulatory environment Speed and efficiency of commercial courts Bureaucratic burden in running the company Stability of the regulatory framework Development and application of fair competition legislation Protection of intellectual property rights Effect of the underground economy on your business Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones 10. Results by areas 21
6. Results by areas 6.4. Infrastructures Infrastructures are one of the areas receiving the highest rating in the survey, with all aspects increasing with respect to 2010, showing once again that this is evidently an attractive area for investors in Spain. Special mention should be made of the assessment of airports, ports and Spain s high-speed train network. The aspects showing the greatest discrepancies between the rating given and the importance to investors are broadband coverage and the road network. Nevertheless, these two aspects show notable improvements compared to last year. In any event, and despite the positive rating, foreign investors still want to see further improvements in this area, especially to Spain s ports and its rail network. As can be seen in Figure 14, the availability of industrial land is also an aspect that is well rated in terms of its importance to companies. Figure 14 Infrastructures Broadband availability Highways Availability and quality of distribution networks Availability and quality of supplier networks Area covered by logistics centres Railways Airports Ports Availability of industrial land High-speed train Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Results by areas 22
6. Results by areas 6.5. Costs For the second year running, costs are an area that is rated increasingly highly by investors. The ratings of virtually all aspects are up on 2010, a very positive evolution. Mention should be made of the slight drop in the assessment of unskilled labour costs compared to 2010 and the notable increases in the ratings given to the cost of electricity, broadband and transport. The cost of industrial land and gas was well rated, although it is necessary to bear in mind the cost of skilled labour. In addition to being the aspect showing the greatest difference between rating and importance, it has also maintained the same position as in 2010. The cost of broadband and telephone services should also be mentioned, as should the cost of transport, as in these areas there is a notable difference between rating and importance to foreign investors. Figure 15 Costs Skilled labour costs Telephone costs Broadband costs Transport costs Cost of adapting to various regional and local laws Electricity costs Unskilled labour costs Raw material costs Cost of adapting to environmental legislation Gasoline / diesel costs Office rental costs Cost of industrial land Gas costs Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones 10. Results by areas 23
6. Results by areas 6.6. Credit The area of Credit and Financing has seen a considerable drop in the rating given by investors in all aspect in comparison to 2010. In general, the rating given to all aspects is low, although it should be pointed out that lines of credit from ICO, the Spanish Official Credit Institute, were rated the highest. In terms of lines of action, credit availability and cost within the commercial banking sector is an area that needs to be improved. Although the low rating in these areas is probably as a consequence of the international financial crisis, are two of the most important aspects for investors, making them priority areas of action. As far as alternative sources of credit are concerned, the rating given to the credit lines offered by the ICO, Business Angels, Mutual Guarantee Company and Alternative Stock Market is in all cases greater than their importance to investors, meaning that although they have a low rating they are not considered to be priority areas. Figure 16 Credit Availability of credit from commercial banks Cost of credit from commercial banks Availability of investment incentives and subsidies Availability of other types of credit Venture capital ICO credit lines Business angles Mutual guarantee company Alternative stock market Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones. Additional consultation How would you rate the evolution of access to credit over the past 12 months? 7% 9% Improved greatly Improved moderately In this year s survey, foreign investors were also asked to rate the evolution of access to credit over the past year. Half of those who responded said it had got worse. 32% replied that there had been no change whilst only 7% said that situation had improved. 32% 52% Worsened No change I don't have enough information Results by areas 24
6. Results by areas 6.7. Human Capital The general Human Capital rating is positive, showing a slight increase with respect to 2010. There are, however, two key aspects requiring improvement in this area: language skills and the assumption of responsibilities and objectives. The discrepancy between rating and importance regarding spoken and written expression skills should also be mentioned, with the gap between the two increasing compared to last year. It is also essential to keep working to improve the situation with regard to skilled labour, where although the rating has increased significantly, is still below the importance afforded it by foreign investors. This and the other aspects relating to human capital are of fundamental importance in ensuring Spain s medium- and long-term competitiveness, and thus it is necessary to continue working hard in this area. Figure 17 Human Capital Language skills Assumption of responsibilities and objectives Spoken and written expression skills General assessment of the advanced education system (University) Learning capacity Availability of skilled labour Maths skills Business school quality Availability of unskilled labour Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones. Results by areas 25
6. Results by areas 6.8. Innovation In general, the area of innovation shows one of the lowest ratings in the whole survey, with a slight fall compared to 2010, although it should be taken into account that this is not deemed to be one of the most important areas for investors. The only aspect where the rating exceeds the level of importance is in the availability of researchers. There are, nonetheless, significant differences in other aspects related to investment that foreign investors consider important, such as R+D+i incentives, an aspect in which the rating has fallen considerably with respect to last year. Compared to 2010, the rating and importance levels were also inverted when it came to the existence of scientific and technological parks, with the rating this year falling slightly below the level of importance. All of this indicates that this area should be considered as requiring action, one where Spain need to work hard in order to remain a competitive country. Figure 18 Innovation Business application of R+D+i Total public R+D+i spending R+D+i incentives and subsidies Existence of science and technology parks Availability of researchers Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Results by areas 26
6. Results by areas 6.9. Size of market The size of the Spanish market represents two very different aspects. Investors rated access to foreign markets positively, higher than last year, whilst the assessment of the local Spanish market fell significantly, in particular for non-european companies. For foreign investors, both aspects are seen as very important, registering the highest values across the survey. There is therefore room for improvement, taking advantage of one of the main strengths that Spain has to attract foreign investment. Figure 19 Size of market Size of local spanish market Access to foreign markets Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Fuente: UNCTAD y páginas web de las Agencias de Promoción de Inversiones. Results by areas 27
6. Results by areas 6.10. Quality of life The rating that foreign investors give to Quality of Life in Spain is positive, although there is a slight decrease both in the rating given and its importance. Attention should be drawn to a number of aspects that make Spain a very attractive destination for expatriates and their families, such as the availability of international schools and the quality of the healthcare system. Expatriate integration and leisure and culture are two clear strong points for Spain, whilst the cost of living is seen as its greatest weakness, showing a drop in its rating for the second consecutive year, which should be seen within the framework of the current difficult economic situation. Security in Spain is also a strong point in the opinion of foreign investors, who actually rate it higher than last year. Figure 20 Quality of life Cost of living Security Availability of international schools Quality of the healthcare system Integration of expatriates Leisure and Culture Assessment of Spain Importance for your company 0 1 2 3 4 5 6 Results by areas 28
1. Introducción Methodology The Barometer has been jointly conducted by INVEST IN SPAIN and the International Centre for Competitiveness (ICC) at the IESE Business School. The 2011 survey has maintained the same structure as in previous years, asking the same questions. This year, however, questions have been added which seek investors opinions on a number of matter of great importance to Spain, such as labour and VAT reforms and access to credit. As in other years, the methodology used in the survey involved over 300 foreign companies operating in Spain filling out a questionnaire. In order to ensure continuity, the following areas have been included in the questionnaire since 2007 and are divided into four main groups: General Panorama in Spain, Costs, Infrastructures and Resources and Quality of Life. The average rating for Spain is obtained from the average rating obtained from each of these four groups. 1) GENERAL PANORAMA IN SPAIN Labour market Regulatory environment Size of market 2) COSTS Costs Taxation Credit 3) INFRASTRUCTURES AND RESOURCES Infrastructures Human capital Innovation 4) QUALITY OF LIFE The questionnaire seeks both the rating that companies give Spain in each aspect and the importance they give to each factor, in order to be able to assess results based on the real interests of these businesses. Each of the questions require foreign investors to give a score from 1 to 5 of the importance that this aspect has for their company and a second assessment using the same scale of the rating they give to Spain in this regard. The questions which show the greatest gap between the importance to and rating given by investors are flagged as requiring priority action, as this difference in assessment shows that foreign investor expectations are not being met. Methodology 29 Barómetro del clima de negocios en España, Resultados 2011 Introducción 29
Annex ANNEX 1 : PROFILE OF SURVEYED COMPANIES The profile of the companies that participated in this study is quite diverse. Businesses of all sizes are represented, although most have between 11 and 250 employees, as can be seen in Figure 22. Figure 21 shows that these companies set up their Spanish operation in the past 20 years, whilst less than a third started up before 1980. The sectors represented in the survey are similarly diverse, as seen in Figure 23. The most represented sector is the chemical sector, closely followed by the car and parts manufacturing sector. Figure 21 Figure 22 Year the company started up Number of company employees 2001-2011 21% Until 1940 13% 1951-1960 3% From 501 to 1000 8% From 1001 to 10000 11% From 1 to 10 9% 1961-1970 4% 1971-1980 10% From 251 to 500 10% From 11 to 50 31% 1991-2000 30% From 51 to 250 31% 1981-1990 19% Barómetro Barometer of del the clima Business de negocios Climate en in España, Spain, Resultados 2011 results2010 Introducción Annex 30
Figure 23 Business sector Chemical, pharmaceutical, biotechnological and science products Car and parts manufacturing Commercial distribution, retail sales and consumer goods Construction and engineering services Electronics and engineering services Logistics and transport Food and drink Energy Professional services Renewable energy sources The environment and water supply, wastewater and sewage treatment Banks, insurance and other financial services Agriculture, forestry and fishing Aerospace and aeronautical industries Travel, tourism and leisure International organisations, NGOs and other organisations without Mass media and entertainment Commercial associations and advertising organisations for 0 10 % 20 % 30 % 40 % 50 % As far as the reason for setting up in Spain is concerned, the vast majority of surveyed companies that this was due to the geographical location, as well as size of and access to markets. Other important factors were staff costs, infrastructures and quality of life. Figure 24 Reasons for setting up in Spain Geographical location Market size Access to markets Staff costs Infrastructures Quality of life Spanish language and cultural awareness Workforce qualifications Other Tax framework Incentives and subsidies R+D+i framework 0 50 100 150 200 250 300 Annex 31
Orense 58, 3º 28020 Madrid T: (+34) 91 503 58 00 F: (+34) 91 503 58 03 investinspain@investinspain.org www.investinspain.org