A thriving start-up, a world-renowned economist, a country’s largest airline and most powerful bank. These are just some of the different perspectives that we got to hear from this week in Madrid. Each Spanish leader we had the chance to meet with offered different financial insights about the Spanish economy and how it affects their work.
The economy of Spain is the world’s fourteenth-largest by nominal GDP, the fifth largest in Europe, and it is also one of the largest in the world by purchasing power parity. It is however often cited for high unemployment and taking off the entire month of August. In our first meeting with TV analyst Daniel Lacalle, we quickly learned that this unemployment number (occasionally in the 20 – 25% range) is actually much lower based on how they calculate full-time employment and the underground employment. For example, the current unemployment rate of 17% would actually be 12% if calculated the same way as the US.
Geoblink, led by Jaime Sánchez-Laulhé, a CEO with an MBA, also touched on the differences of trying to make it as a start-up in Spain versus Silicon Valley. He noted 2 key differences in working in Madrid versus the Bay Area. One, wages for software engineers are much lower and less competitive than SF making it more sustainable to be a start-up. Secondly, there is much stronger company loyalty in Spain. Because of government regulations that make laying off employees very expensive, people then do not regularly switch companies because the hiring process is much more difficult. He, in fact, has only had one employee leave in 3 years with the company and a staff of 40.
It’s been exciting to learn about the pride and power of the Spanish economy.
That’s it for now.
-Patrick Sofen ’19-