On Wednesday 23rd of February, the Export Cooperation Sweden-Finland project hosted a webinar for 30 interested participants from Finland, Sweden and Spain to learn about opportunities in the Spanish export market. Participating companies represented, for example, the automotive, gaming, health tech, logistics and recycling industries. In this article, Spanish market experts share their practical tips for companies entering one of the most interesting export hot spots in Europe at the moment.
The purpose of the webinar was to introduce Finnish and Swedish high-technology companies to Spain as an export market opportunity. The companies were also introduced to the Business Finland and the Swedish Spanish Chamber of Commerce services in Madrid, Spain, that help ambitious growth companies to enter the market.
Mr Guillermo Solano, Advisor, Business Finland in Madrid, opened the webinar with an introduction to the Spanish market, regional approach and business culture. He also introduced the automotive industry as one strategic investment area providing new opportunities for Nordic companies; the Spanish car industry is the driving force behind the country’s technology and economy. Spain is the second-largest automaker in Europe and the eighth largest in the world. According to Instituto de Comercio Exterior (ICEX), the key sectors for investments are: Industry 4.0 (the digital transformation of manufacturing/production and related industries and value creation processes), digitalisation, vehicle lightening (sustainable materials reducing the mass of the vehicle for CO2 improvement), recycling in the automotive industry, safety and connectivity, new propulsion systems and energy storage batteries.
Guillermo explained that Spain is a highly competitive internationalised country; most of the expected international competitors are represented in the country. This, coupled with the language barrier, is why it is crucial to have a local partner to support the market entry. Regarding business and organisation, Spain responds to a more hierarchical decision-making model. Marketing materials in Spanish are necessary due to the language barrier and the wearing of formal business attire is also strongly recommended. Social interactions such as business lunches or coffees are a perfectly reasonable way to carry out business.
Next, Ms Rebecka Svensson, Senior Business Consultant, Swedish-Spanish Chamber of Commerce, focused on the National Recovery Plan and business opportunities. Rebecka reminded participants that the NextGenerationEU (NGEU) package allocated to Spain is predicted to have a transformative impact on the Spanish economy. The total amount is equivalent to all the structural funds that Spain has received since its entry into the EU. Given its magnitude, the NGEU funding will be crucial for a full recovery and will be a conditioning factor for economic evolution in the coming years.
The so-called “PERTES” (Strategic Projects for Economic Recovery and Transformation in English) are large strategic projects which will serve as public-private collaboration instruments in important sectors. The Electric & Connected Vehicle was the first project to be approved and its aim is to turn Spain into the European hub of electromobility. The project foresees a total investment of more than 24 billion euros in the period 2021-2023.
In light of the large amount of funding that is being funnelled into the economy, and the potential for growth that it presents, there is a great opportunity for Swedish and Finnish companies with innovative, sustainable and technological solutions to benefit from this momentum and find opportunities in the market.
The Finnish iLOQ and Swedish Charge Amps companies share their key tips for successful market entry
iLOQ is an Oulu-based Finnish company leading the technological revolution in the locking industry since 2003. The company introduced the first electronic lock in 2008. The company manufactures smart electronic and battery-free locks; they don’t require any kind of battery because the energy is created while inserting the key. Today, the company has about 230 employees and has operations in 30 countries. The unique technology, combined with a worldwide sales network, has enabled the company to build strong organic sales growth; turnover increased from 40,3 million euros in 2017 to 74,1 million euros in 2020. Of course, the development of ISO/IEC quality management systems has also played an important role in providing a high-quality service to customers.
Mr Joaquim Serrahima Arbestain, Global Key Account Director Telecom was the key person in setting up the Spanish subsidiary iLOQ Iberia SLU, which covers Spain and Portugal. But what was their secret? Joaquim explained that they decided to set up a 100% subsidiary. It is an agent company, meaning that they have only a sales team focusing on promoting the products. All the other functions are performed at the headquarters in Oulu. “Our way of operating is super-easy to implement. This way we have no duplicating structures such as administration, people, invoicing or maintaining products or marketing tasks. This is a very quick set up and has proved to be a success”. Joaquim has enjoyed working for the Finnish company. “Spain is such a big market, but still often ignored by the Nordics! Yet, we are very open to Nordic technology, we have the talent, good universities, and high-quality business schools. We have excellent roads, high-speed trains, and plenty of sea. Also, Spain is a super-nice hub for opening the door to Latin America and Africa. I really think Spain is your company’s next business opportunity!”
Charge Amps is a leading Swedish-developed provider of innovative and sustainable charging solutions for electric vehicles. Charge Amps develops smart and user-friendly products for use in homes, offices and public places. Charge Amps was founded in 2012 in Stockholm, Sweden, and is undergoing rapid international expansion, with 120 employees in seven countries, and sales across 15 markets.
Mr Henrik Bergman, Head of Market Area Spain & Portugal, ended the webinar with his insights into the Spanish market, gained over 25 years. He emphasised the fact that you need to know your competitors well so that you can identify your company’s and solutions’ market position, and how to differentiate yourself from the competition. Henrik also revealed that it is very important to provide local knowledge and guidance to the company headquarters about the Spanish market specialties, features, rules and regulations to localise products and services to meet the export market’s customer demands. Henrik concluded with this advice: “Be patient, have perseverance, and be present here locally. Spain is definitely worth the effort!”
Eleven practical tips for entering the Spanish market
- With 140 billion euros, Spain will be the recipient of the second-highest amount in the EU’s public investment by 2026. The National Recovery Plan includes an unprecedented commitment to green transition (37% of the funds) and digitalisation (33% of the funds).
- The transition to a green economy is the most highly prioritised area in the recovery plan, which is to “decarbonise” and electrify the economy, improve energy efficiency, invest in the development of a circular economy, green and blue infrastructure, etc. According to the Europe Sustainable Development Report 2021, Spain ranks 21st in Europe when it comes to reaching the sustainable development goals, whereas, for example, Sweden ranks second. So, there is much room for improvement, which also provides new business opportunities for ambitious high-growth Nordic companies.
- When it comes to digital transformation, the major focus is on investments in strategic sectors such as the automotive industry, tourism, health and commerce and the digitalisation of SMEs and start-ups as well as the entire public sector.
- Regarding the EU-funded projects and other public investments, the year 2022 is crucial for Spain, and the Spanish economy is expected to grow above the EU average (5,6%, source: Funcas1). The goal is not only to recover from the global COVID-19 pandemic, but also to focus on the structural transformation of the economy and society. The government predicts that the recovery plan may have economic significance in line with Spain’s accession to the EU or the introduction of the Cohesion Fund in the 1990s. From the second quarter of 2021, the public administrations have been publishing official calls for public tenders, subsidies and grants that are open to companies, organisations and private citizens.
- The moment for Nordic companies to look for partnerships is right now. Later it will become more difficult to enter, since right now is when corporations are open to hearing about solutions: they need to scout for innovative, efficient and digital solutions in order to be capable to apply for the EU projects. Nevertheless, this will be a medium – long term run. Right now, it is very important to gain visibility and understand what and how companies are going to undertake their projects linked to EU funds.
- Spain is very diverse, so don’t consider Spain as one country. There are 17 autonomous regions and two autonomous cities. Although there are some common denominators, it is important to understand that these regions are specialised in different industries, so companies need to find out where their industry fits in. Business Finland and the Swedish-Spanish Chamber of Commerce can help Nordic companies to understand in which regions Nordic companies may have the best opportunities.
- Spain is a very competitive and aggressive market, so you need to be physically present. It is also a prerequisite for building trusting, long-term relationships.
- Build a local team! Even though the English language is becoming increasingly common, hire talent with local language skills, who understand the local rules and regulations and have the skills to manage, for example, the administration and paperwork.
- With regard to the Spanish business culture, the Spanish people prefer oral communication (face-to-face) to emails or business calls. Personal relations are very important.
- Reserve enough time to conduct proper market research. Don’t expect that you will be able to just transfer your successful Nordic product into a new market without localisation; find a product market fit.
- Consider what the optimal company structure is for your business case. Find out and learn from other companies how they have made successful market entries into Spain.
How can Nordic companies continue exploring the new market opportunities in Spain?
The Spanish Market 2022 activities continue with a business delegation trip to Spain in June 2022. As part of this export service package, Oulu region and Norrbotten region high-technology companies are offered tailor-made B2B meetings and networking opportunities that have been pre-organised by local specialists and co-operators. For this delegation trip package, we can also support companies with a 50 % discount on travel and accommodation costs, which will be funded by the Interreg Nord and Export Cooperation Sweden-Finland projects.
Companies in Oulu: Spain – A Hot Spot for Cool Business
Business Finland in Madrid: Information about Spain and Services for Growth Companies
Companies in Norrbotten: Följ Med Oss Till Spanien
Swedish-Spanish Chamber of Commerce in Madrid: Information about Spain and Services for Growth Companies
Advisor, Exports, Business Finland, Madrid
Tel: +34 667 869 645
Senior Advisor, Exports, Business Finland, Madrid
Tel: +34 603 645 130
Advisor on International Affairs, BusinessOulu
Tel: +358 50 432 8873
Senior Advisor, Business Development, OAC - Oulu Automotive Cluster, BusinessOulu
Tel: +358 40 773 8414
Senior Business Consultant, Swedish-Spanish Chamber of Commerce
Tel: + 34 627 18 56 22.
International Coordinator, Norrbotten Chamber of Commerce
Tel +46 70 540 03 93
This article was written in collaboration with the Export Cooperation Sweden-Finland project, the Oulu Automotive Cluster and the Business Finland Madrid office. The activities in Spain are supported by the Export Cooperation Sweden-Finland project and the Oulu Automotive Cluster, and funded by Interreg Nord, the Regional Council of Lapland, Tillväxtverket and Region Norrbotten.