The zeitgeist: Movida verte and Arty

One of the city's major assets is also its strategic position. With its historical proximity, Madrid has close links with Latin America, reflected in the number of flights departing from Barajas airport - around a third - bound for the sub-continent. This gateway to a market of over 500 million people explains why Spain is the second largest foreign investor in Latin America after the United States. As an economic hub between Europe, Africa and South America, the city has everything it takes to attract investors. Aware of its role as a crossroads at the heart of the Iberian Peninsula, the region has also embarked on vast infrastructure improvement projects over the past decade. A huge network of high-speed trains, the most recent of which opened a few months ago and runs to Valencia, now links the capital to the rest of the country, and soon to Portugal.

This is one of the reasons why 85 %d Spanish logistics companies are based in the capital. “The city has become a real hub, both for rail and air transport,” says Roberto Diez, export adviser for Ubifrance Spain, “and that is undoubtedly why, over the past three years, the region has regained the lead in terms of growth and foreign investment in Spain; ahead of the Basque Country and Catalonia”.

 

Despite a debt level of around 15 billion euros, the Autonomous Community of Madrid is leading the way. While its large-scale projects have cost it a great deal of money, the whole dynamic of the city and region has been transformed as a result. Among these major projects, the most impressive is undoubtedly Madrid Río, a plan to redevelop an entire district along the banks of the Manzanares river. But before that, there was, among other things, the refurbishment of the old central post office where, this summer, the new town hall was installed, at a cost of well over a hundred million euros. Or the IFEMA convention centre near the airport, where two pavilions were recently inaugurated and which attracts nearly 5 million visitors every year. Or Barajas airport, which added a fourth terminal and two runways in 2006. And finally, new roads, new motorways and 200km of additional metro lines in just ten years, giving the city one of the most extensive networks in the world, and certainly one of the most modern.

 

 

So there are debts, of course. But that's because Madrid is thinking far, far ahead. "These new infrastructures have contributed to the city's greater international influence, and therefore to the development of tourism in general and business tourism in particular," says Roberto Diez. Especially when you consider that the costs of organising corporate events here, as in Berlin, are among the lowest in Europe. Today, even on a national level, Madrid is the most attractive city in Spain, ahead of Barcelona, which has long been the leading Spanish destination. Tourism, one of the driving forces behind both the Spanish and Madrid economies, is set to be strengthened, in particular by diversifying and specialising in the business, health and e-tourism sectors. "Madrid is the Spanish region that seems to have coped best with the crisis," says Roberto Diez. And the projects continue. Mayor Alberto Ruiz-Gallardón has announced that his city is once again bidding to host the 2020 Olympic Games, and there is already talk of renovating a stadium near the airport.

 

 

With Madrid-Barajas and the IFEMA exhibition centre as the main contributors to GDP, the services sector now accounts for 83 of the workforce and has gradually established itself as a key driver of the local economy. Through this major shift towards the service sector, Madrid has undoubtedly risen to the rank of a European financial centre. This is a welcome step towards reducing its dependence on the property sector, which remains very significant at national level. Yet, as is well known, when the construction sector is struggling, nothing else goes well…“If Spain was hit so hard by the crisis, it is also due to the bursting of the property bubble around ten years ago,” explains Julie Muro, head of the economic and financial sector within the economic department of the French Embassy. “Between 2004 and 2008, there were around 800,000 new housing starts, far more than in France or the United Kingdom.”

Today, the country is seeking to invent a new, more productive growth model, particularly in the renewable energy sector, with a large wind farm, but also in the aeronautics and aerospace sectors", continues the economist. These are two areas in which Madrid has already positioned itself and, with several production sites, accounts for almost two-thirds of Spain's aerospace sector.

With the aim of stimulating innovation, research and development, particularly in the fields of health, safety, aeronautics, but also the media and renewable energies, the Autonomous Community launched Madrid Network in 2007. Its aim: to make the region one of the ten most advanced in the world and create some 28,000 jobs in growth sectors. The strategy: clusters and technology parks, such as Tres Cantos, located around twenty kilometres from the city centre. The interaction between universities, research centres and young companies specialising in high technology and information technology is a model that has already proved its worth elsewhere, and one that Madrid is enthusiastically adopting. In all, a dozen clusters have been defined, including aeronautics, logistics, biotechnology and health, information and communication technologies, hotels and restaurants, audiovisuals, etc., as well as finance, publishing and the automotive sector, a sector in which French companies stand out, with the presence of the PSA group in particular. French companies that appreciate Madrid.

"Last year, we registered 55 companies", explains Bertrand Barthélemy, Director of the French Chamber of Commerce in Madrid. "And if any further proof were needed that trade relations between France and Spain have always been good, the Madrid Chamber, founded in 1894, is one of the oldest in the world.

 

Of the 1,200 French subsidiaries in Spain, more than 500 are said to be based in the Spanish capital, where the activities of the French are concentrated mainly in services, reflecting the economic trend in the region. "Although the Spanish market is already saturated and spontaneous requests to set up in Spain are rare, it is nonetheless possible to break into buoyant sectors, such as mass retailing or top-of-the-range products, which benefit from a very good brand image", adds the director. But a word of friendly advice: "You must never forget that the Spanish live at a different pace, and that Spanish time is not a legend", says Bertrand Barthélemy. Here, a 1pm appointment is a "late morning" appointment. The days end late, people are often on first-name terms, and professional relationships require less distance than in France. Sometimes, replies to emails are a little slow... "You don't have to formalise, you have to adapt", concludes the director. But in Madrid, with its 300 days of sunshine a year, it would seem that business can only be good.