• Madrid Investment Attraction

“Promoting the Madrid brand is a task for everyone, not least for foreign multinationals based in the capital of Spain”

A conversation with Martín Pérez, General Manager of Multinacionales por marca España

June 2020

The global of COVID-19 pandemic, in addition to impacting foreign investment and reinvestment forecasts in the short and medium term, has disrupted global value chains throughout the world, forcing multinational companies to carry out strategic analyses in this new scenario, both in terms of their global presence and talent needs, and of new ways of working and integration with local economies. In this context, we spoke with Martín Pérez, General Manager of Multinacionales por Marca España, an association that brings together around fifty leading multinationals in their respective sectors of the Spanish economy and which has emerged as the voice of foreign multinationals operating in Spain.

M.I.A.: The forecasts for foreign investment and reinvestment for 2020 and 2021 announced by UNCTAD point to a global reduction of 40%. How have the main multinationals installed in Spain reacted to this news? What prospects for reinvestment do you foresee in the short term? Are there activities that can be compromised in the near future?

M.P.: Bearing in mind that we are Spanish companies with foreign capital, we must take into account that this crisis will bring some opportunities to Spain by favoring sectors that can act as tractors of the economy, such as finance, energy, telecommunications, technology and textiles, as well as biotechnology.

Moreover, the country’s good relative position in aspects that may be favored by the new global concern for prevention and care in the face of the risks of viruses and their mutations may also present an opportunity for Spain. These include a lower urban concentration favored by tourist housing developments, limits imposed on forest clearing, a reforestation drive and strengthening awareness of climate change, which will favor renewable energies such as wind and solar.

Spain will count on the financial support of the European Union, which was enshrined in the agreements reached on April 9. These include an emergency package of more than half a trillion euros to fight the pandemic and the pending reconstruction plan, a kind of new “Marshall Plan”, to be channelled through financial instruments and subsidies and which will be included in the 2021-2027 budget framework.  Nonetheless, there are still some differences between the alliance of the Mediterranean countries and some of the eastern and Hanseatic countries regarding funding.

In this sense, Spain must demand that the EU improves European governance to ensure financial support to its member states and prioritizes policies that strengthen the productive fabric, especially SMEs, employment, industry, digitalization, R & D & i, the energy sector and climate change. The EU must support open global markets and multilateral solutions, playing its part in the recovery of world trade and the recovery of value chains.

M.I.A.: What activities is the Association carrying out during this crisis? And, individually, the companies of the Association?

M.P.: For the Association its mostly business as usual thanks to the use of new technologies, although we have been forced to cancel face-to-face meetings, though we hope to resume them as soon as possible. One of the tasks to which we have dedicated greater effort has been to value the initiatives that our associated companies are undertaking to curb the pandemic in support of employees, suppliers and customers, and society as a whole.

Important decisions have been made to preserve jobs and the safety of workers, enabling teleworking and electronic commerce, and making sure that the  technological resources that allow professionals to continue with their daily activities are accessible.

Our companies have been able to reorient themselves, adding value where it has been necessary and multiplying their efforts to apply innovative solutions in logistics and manufacturing, to guarantee the supply of their products and to share their technical experience, supporting operations on the front line or developing innovative solutions wherever possible..

Many have launched donation programs, adapting to the needs of each community, in collaboration with the authorities and social entities.

Once again, it is confirmed that multinationals play a key role in the economic and social development of Spain, as well as being an example of good practice.

M.I.A.: The COVID-19 pandemic has disrupted global value chains worldwide. How has this affected the Association’s companies? Is a change in geographic supply plans expected between multinational companies towards closer suppliers in the short or medium term?

M.P.: Global pandemics and crises make global responses and more global governance increasingly necessary. The value chains of most products or services, albeit with significant changes, will also remain global. The gains in terms of efficiency and the accessibility of citizens to goods and services are so vast that we could not afford to do without them.

However, lessons are being learned from this crisis, and there will be opportunities for those who take them onboard and are able to apply them in the most efficient way. We must update our contingency plans to remain a part of our value chain or even consider the possibilities of changing to alternative value chains.

As Spanish companies whose headquarters are abroad, we must understand that we will have to include alternatives for critical supplies, including corporate, delivery and export logistics, in which some national options will have a role to play in the face of the not-so-impossible closings of borders.

M.I.A.: Are multinationals carrying out strategic analysis regarding possible changes in  talent needs, new ways of working or integration with the local economy?

M.P.: An overarching agreement on education, professional training and a substantial reinforcement of R&D and innovation focused on the needs of the 21st century and the potential of Spain and its companies is paramount in order to deal with this crisis.

At Multinacionales por marca España we believe in nurturing entrepreneurship in a knowledge based economy for which fostering a wide range of qualified professionals in skills close to the reality of the company is vital. Curricula should encourage an entrepreneurial spirit by creating new attitudes and competencies and new companies that create jobs that may not even exist yet, where it is not what you know, but what you can learn that makes the difference.

We are also pushing for universities and business schools of international excellence. Spanish public and private universities as well as international institutions must strive to attract and retain people with excellent qualifications or proven talent, with initiatives to promote the mastery of foreign languages such as recovering emigrated talent.

M.I.A.: What role do you think local corporations such as Madrid City Council should have in supporting multinational companies in the territory? And in ensuring that large cities like Madrid continue to be on the radar of investors?

M.P.: Madrid is an open and inclusive city that combines modernity and tradition, culture and innovation. Its privileged geographical position, at a crossroads between Europe, America and Africa, makes it an ideal location to host international organizations and become the scene of global events.

Madrid is a business friendly capital, it has great appeal for international talent. Its educational ecosystem, with first-rate universities and business schools,  give it enormous potential to establish itself as a center of knowledge in Europe. Spanish, the second most spoken language in the world, is also a major asset. All these aspects set us apart.

In economic terms, Madrid is one of the main engines of the Spanish economy and host to a significant number of multinationals with foreign capital; In total, more than 4,800 companies employ 812,000 workers with a turnover of more than 300 billion euros in the city .

Promoting the Madrid brand is a task for everyone, not least for foreign multinationals based in the capital of Spain. It should be remembered that some of them have been present in Madrid for over a century, others many decades, a time in which they have witnessed moments of prosperity, crisis, social changes… and in which they have adapted their structures to continue innovating and offering what the Spanish and Madrid society demands.