Tech park. Dozens of technology firms are showing an interest in locating in Malaga. / SUR

Malaga's tech pull is stronger than ever

The Costa del Sol's attraction for technology investment shows no sign of slowing down, with a new wave of announcements contrasting with warning signs from the USA

NURIA TRIGUERO

According to scientists, 'chemical' attraction lasts between 18 months and three years. Once the passing enthrallment caused by hormones passes, love begins: a deeper union in which intimacy and commitment take over - partially - from passion. A year and a half has passed since technology fever broke out in Malaga city, thanks to Google with its upcoming cybersecurity centre of excellence; enough time for the sceptics to accept that this area's relationship with technology giants is not just a passing "affair".

Let's take a look back to gauge what has happened in these 18 months. The news about Google unleashed real demand which Malaga TechPark, the city council and estate agencies managed as best they could: many companies suddenly wanted their names to be linked with Malaga as well.

'The new Barcelona', 'The innovation hub of southern Europe', 'The Spanish Silicon Valley'... headlines like these went with every new announcement.

Just one day after Google, Dekra - a German multinational with a presence in Malaga since 2015 - redoubled its commitment to the city by opening a global information technologies hub staffed by 100 professionals.

The following month two more projects were announced: Argentinian multinational Globant's artificial intelligence innovation centre with 200 employees; and TDK's data science and machine-learning centre of excellence.

Vodafone

Then in May last year, Vodafone made Malaga a talking point again by choosing it from seven European cities for their European R&D centre for developing new technology solutions and digital services, with a planned 600 employees.

Meanwhile, calls to the technology park and the town hall's investment office continued to come in; last year the office attended to 152 companies that expressed an interest in moving to Malaga and 27 businesses with foreign capital did so, more than double the number in 2019.

No less important was the dynamism of local players: 2021 was the year that Besoccer became visible for what it is - a major company - with its move to a striking new head office.

It was also the year of the merger between Uptodown and Unity to challenge Google and Apple's world domination of mobile gaming. It was the year of Freepik's major spurt of growth, which, thanks to the fuel of EQT funds, managed to overtake its great rival Shutterstock with a 400-strong workforce. And not forgetting the birth of Innova IRV, the city's most ambitious economic investment since the technology park was created.

At an institutional level there was also great news: the regional government designated Malaga as the base for the Andalusian Digital Agency and Cybersecurity Centre and the free 42 Malaga programming school came into operation.

New impetus

Malaga's attraction as a technology hub, far from waning, has recently been boosted even further. In just one week, three new names have been added to the already-long list of firms that have chosen to locate technological development centres here: Banco Santander, GP Bullhound and Grupo Babel.

The bank is planning to open an office to provide technological support to its investment banking division.

Something similar is due in September with GP Bullhound, which may not be well-known to the general public, but is to the technology ecosystem. Its investment portfolio contains treasures such as Spotify, Glovo, Slack, Unity and Jobandtalent.

Meanwhile, Grupo Babel, which came to Malaga last year when it bought Ingenia, is now proposing to open a global cybersecurity centre and employ 700 people within three years.

These latest announcements contrast with the signs of caution emanating from the mecca of technology. In the USA, big names in the sector are putting the brakes on their recruitment plans due to fears of a new recession. In Malaga, this does not appear to be the case. In fact, the messages from the technology firms already in the city are quite the opposite.

In addition to the announcements listed above, Ernst & Young (E&Y), which opened its Malaga excellence technology centre in 2019 and now has 500 employees, has revealed that it plans to employ 2,000 people by 2025. And Globant, which arrived last year with plans for 200 staff in an artificial intelligence specialist centre, is now talking about 400. The French firm Capgemini presented its cybersecurity and cloud centre in March and is now looking to employ another 300 specialists.

Jaime Moreno / SUR

London-based tech investors say local talent drew them to the area

Jaime Moreno is a partner and chief strategy officer at GP Bullhound, a 'boutique' London investment firm with a focus on technology companies. Its portfolio includes names such as Wallapop, Spotify, Revolut, Glovo, Slack, Unity, Jobandtalent, Lingokids and Playtomic and from September, Malaga will be home to this global firm's 13th office. It will not be just another office, however, but a technology development centre, the first for GP Bullhound.

–Why is an investment bank opening an office with only technology professionals?

-Our business has quite a traditional focus. The piece of the puzzle that GP Bullhound needs consists of setting up a team of between 35 and 50 professionals in four different disciplines that we believe complement each other: data science, creative design, software development and research. The idea is that our business units can use this centre of excellence and choose which skills they need depending on their projects.

–Does that mean using technology to take better decisions?

–Yes. Most of our associates come from the fields of Economics, Business and Law and there are times when, in order to be able to predict market trends, we need a mathematical knowledge which goes beyond what we have available. What we want is to have a competitive advantage via these profiles which you don't normally find at an investment bank. We want to empower the firm through data.

–Why Malaga? Does it have anything to do with the fact that the founder of GP Bullhound lives in Marbella?

–Yes, Per Roman has been living in Marbella for many years and thanks to that he discovered the Spanish market that is giving us so much good cheer. When we were thinking of locations for our technology hub, which we wanted to be in Europe, we were struck by the attractive pool of talent there is in Malaga: a lot of young people who are keen to work, a powerful ecosystem and the quality of life necessary to attract talented people who would not consider moving elsewhere. There is a cost component as well, of course.

–Are you discouraged at all by the warning signs coming from the technology sector in the USA?

–The United States is a market where the upside and downside effects have always been rather exaggerated. It is evident that there have been declines in valuations but we are confident that it will continue to be a robust sector; what is happening is a correction to the dramatic post-Covid rally. It is true that there is a series of macro variables such as inflation, which could have an effect that is difficult to predict. We are keeping a careful eye on the situation, but it is not going to affect a project like ours in Malaga, which is a key part of GP Bullhound's growth over the next ten years.

Doubts on the horizon

So large are the figures and so grandiose the words associated with Malaga - R&D centres are no longer fashionable, now they are called innovation hubs and centres of excellence - that some people are feeling cautious, given the cold winds blowing from the other side of the Atlantic.

"According to the latest reports, Microsoft is shedding 1,800 staff, Meta has cut its contracts for this year by 30 per cent, Google is planning to reduce its recruitment and Apple has just announced that it is also reducing budgets for 2023.

Apart from rising concern over whether the economic crisis could frustrate some of these plans, there is also a lingering doubt over Malaga's ability to absorb this growth and not be a victim of its own success. The lack of office space and housing is worrying but, above all, so is the lack of specialist labour, which is already a problem.

The city has shown that it can attract professionals from elsewhere, including returning emigrants, but the recruitment expectations for the sector in the short term may be difficult to fulfil. No matter how many courses there may be to learn programming in just a few months, there are some skills that only a specialist engineer can provide, especially if we are talking about centres of excellence. And engineers cannot be trained overnight.