Spain is full of companies. Millions of them. But, as with demographics, the challenge is not only how many there are, but what they are like, what they produce, where they are and what value they provide. After the great shock from 2008 to 2012, the business fabric was purged and recomposed; after the pandemic, he resisted; and today, in the first quarter of the 21st century, it shows clear signs of favorable transformation. It is a very atomized mosaic, very tertiary and concentrated in a few territories. And, above all, with a well-known Achilles heel: productivity. This is one of the elements highlighted by the recent study published by the Afi Emilio Ontiveros Foundation entitled X-ray of the Spanish business fabric: in search of growth. The most recent photograph of the business census says that we have almost 3.25 million active signatures, but with an extraordinarily asymmetric distribution. More than half are initiatives by individuals without employees; 43% are microbusinesses with up to nine employees; Only 0.6% are medium and 0.2% are large. An economy, therefore, sustained by many small engines. Let no one be fooled: this is also the European norm – except for Germany, with a higher average size – but in our case it is combined with another characteristic: less industry, more services. The entire service sector (including commerce) now represents 82.8% of companies, while industry in the strict sense barely reaches 5.4%. It is not an anomaly, it is a model. But every model has its consequences. And in Spain they are summarized in a phrase that should worry us: we work a lot, but we generate less value per employee than our neighbors. Therein lies the challenge. If you look at the entire film, three structural dynamics have marked the century: persistent atomization, with an average size of 4.6 employees per company; accelerated outsourcing, which has consolidated the dominance of services and reduced the weight of the industry; and geographical concentration, with Catalonia, Madrid, Andalusia and the Valencian Community bringing together more than 61% of the companies. Madrid stands out in large corporations, especially in the service sectors; Catalonia, in industrial density; and the Basque Country–Navarra–La Rioja–Aragón arc maintains a high industrial specialization. The Balearic Islands excel in construction and services associated with tourism. The sum of these vectors draws a business country very similar to the European one in structure – except for Germany, outlier in size and industrial weight – but with a particularity: lower apparent production per employee in all segments. Regarding the EU, the differential is around −20% and compared to Germany it is close to −30%. Being less productive has not prevented improving profitability. It is perhaps the most interesting surprise of the study: Spanish SMEs have converged with their European peers in margin on sales and profitability on assets since the great financial crisis. By adjusting, resisting and professionalizing, many small and medium-sized companies have gained operational efficiency. And they have capitalized a good part of these benefits: the ratio of equity to assets has doubled in a decade and a half to almost 50%; At the same time, the weight of bank debt on the balance sheet fell more than 10 points, in a permanent deleveraging effort. In practice, they are more solvent. How can we explain this “paradox” of increasing profitability with productivity that remains low? Partly due to the differential value of proximity, but above all on the cost side: the Spanish unit labor cost is 20%-30% lower than that of the euro zone and Germany, in line with the productivity gap. To a large extent we compete by adjusting relative wages rather than raising value. It is effective in the short term; It is fragile in the long run. Increasing the average size and focusing on sectors with greater added value helps, but it is not enough: even within each sector and at all sizes, Spanish productivity is lower than European productivity. In industry the gap is smaller (−7%), but in construction, commerce and “other services” it widens (−12% to −19%). The conclusion is clear: in addition to “where we are” (sector) and “how big we are” (size), there is “how we work” that makes the difference: organization, technology, processes, talent and corporate governance. And another key piece: financing is no longer an excuse for not growing. The banking offer improved, both in available volume and in concession conditions, and venture capital—although far from Anglo-Saxon levels—grew in investment and fundraising volumes, providing not only money, but also advice, networks and credibility. According to international evidence, companies supported by venture capital grow faster and survive better. That the Spanish SME is not growing today seems to be due less to a lack of financing, and more to management decisions and appetite for risk. The study does not stop at the diagnosis, but carries out a monitoring exercise of a large sample of medium-sized companies – almost 9,000, employing more than a million people – in their growth dynamics year after year, to identify the leaders, or scalers, as the OECD calls them, which supports the exhibition of these best practices as a factor that stimulates growth. The most gratifying and hopeful thing is that this top 100 of medium-sized companies that are leaders in growth extends in very diverse. In the decade and a half since the financial crisis, they multiplied their sales by more than ten, and their staff by eight, invested twice as much as the average, and obtained productivity and profitability 50% higher than the average. On the other hand, more than half of them made the leap to the category of large company, showing that when there is a strategy and ambition to grow, those size thresholds that are often used as a brake on growth are less relevant as it imposes greater accounting, tax or labor demands. But above all they constitute a clear stimulus for many other companies. The country that will soon reach 50 million inhabitants also needs 50,000 ambitious medium-sized companies spread throughout all territories. Not to replace large companies – essential due to scale, capital and markets – but to create productive density and opportunities close to where people live. It would be very useful to contribute to territorial rebalancing: less dependence on the center, more value on the periphery. Let’s return to productivity as a challenge for companies; of the country’s growth capacity, in short. If we do not “govern” it, it will be productivity—or its lack—that governs us: with contained salaries, with less added value, with less resilience to shocks. Spain has demonstrated its ability to improve its financial health; has shown that it can converge in profitability; has demonstrated – with a hundred scalers – that it is possible to grow in size, innovation and margins. Now it’s time to turn the exception into a rule. And do it with an agenda that looks squarely at what we are—many small, few big, a lot of service, little industry—and acts on what we lack: value per employee. It’s not about counting how many there are; It’s about measuring what you create. And, above all, to make them grow.Ángel Berges and Daniel Manzano are president and trustee, respectively, of the Afi Emilio Ontiveros Foundation.
