Economy
Sections
Highlight
Sections
Highlight
Malaga sits in fifth place for the Spanish provinces with the most companies, standing at a figure that exceeds 132,000, according to data from Spain's INE national statistics institute. It follows Madrid, which has more than half a million companies; Barcelona (just over 445,000), Valencia (177,339) and Alicante (136,754). However, the statistics also show company data broken down by number of employees. There, the picture alters for Malaga - and worsens - as the number of workers rises, showing that the province does not have a problem with the size of its productive fabric, but rather with the size of its productive units.
So, what hinders business growth in Malaga? Is it a fear of business expansion among entrepreneurs? Are they more timid or less ambitious than in other parts of the country? Is it some legal limitations, or is it the areas of activity in which the province specialises that put a cap on growth?
Whatever the reason(s), let us look at employee numbers, starting with those companies with zero employees (sole traders etc): Malaga occupies fourth place in the ranking, overtaking Alicante, with nearly 74,000. The Costa del Sol province returns to fifth position in terms of the number of companies with just one to nine employees. At 10 and 19 employees it jumps to sixth place, overtaken by Seville. As we reach those companies with 20 to 49 workers, it drops another place to seventh, ahead of another southern province, Murcia. Malaga drops another place when we talk about companies with between 50 and 99 employees - surprisingly beaten by Vizcaya. Malaga is even lower still in the Spanish ranking ordered by number of companies with between 250 and 999 employees: it is in tenth place. Worse still, it falls nearly another 10 places (to 19th) with companies of 1,000 to 4,999 employees. When talking over 5,000 employees, there is only one company domiciled in Malaga compared with 100 in Madrid, 24 in Barcelona, 7 in A Coruña and 3 in Seville. Malaga, therefore, stands out for the volume of its productive fabric, but fails in that its large companies do not match up to the importance of its business base.
José Antonio Muñoz, from the team of number-crunchers at Analistas Económicos de Andalucía (part of Unicaja Group), summarises the situation in Malaga well with illustrative data: in the province there are seven large companies (defined as those employing more than 250 people) for every 10,000 companies, whereas in Madrid there are 30, 12 in Seville and 14 in Murcia per 10k.
Muñoz explained that there are two conditions underlying this situation. On the one hand, the 'headquarters effect', or rather the fact that Malaga is neither a regional capital (Seville is Andalucía's regional capital) nor, of course, of the country. This is why Seville beats the Costa del Sol province and why Murcia also has practically twice as many large companies in relative terms. This factor is also pointed out by Natalia Sánchez, executive vice-president of the Confederación de Empresarios de Málaga (a representative group for entrepreneurs and employers in the province): "Traditionally the capital of each autonomous region has had a greater capacity to attract companies and here we do not have that advantage but, in recent years, Malaga has managed to compensate with the development of the technology sector, although we still need a few years, because although we constantly hear that Malaga is a very interesting place to create a company and that one in three of those born in Andalucía is from Malaga, the great challenge we have is that they consolidate and grow."
However, there is another factor that Muñoz considers to be more influential and more profound in explaining the smaller size of Malaga's businesses: the productive structure. As José Manuel Cansino, professor at San Telmo Business School, pointed out, "each economic sector and each industry requires a different size." Thus, the hotel and restaurant trade is full of small companies or self-employed people with no employees. So said the provincial secretary of the UGT trade union, Soledad Ruiz, pointing to Malaga and right along the coast. In contrast, the steel industry or the manufacture of car components require a much larger number of employees. "So the main explanation for Malaga's business size lies in the sectors active in the local economy. If we had a steel industry, the volume of larger companies would be more important" said Prof Cansino. For Malaga's entrepreneurs, Sánchez had this point to make: "Industry has a larger wage bill, three shifts to cover 24 hours, and in Seville and Murcia it is more present than in Malaga." She further pointed out that the latest labour reform, which enables discontinuous workers to be contracted on a more permanent basis, may have contributed to the fact that the average size of service sector companies has increased in areas such as Malaga, as they are no longer subject to the seasonal nature of employment.
In Malaga province the driving force is the tourism sector, which is very labour-intensive, Muñoz adds, but spread over many companies, making it a very fragmented productive fabric. Moreover, Muñoz pointed out, although there are hotels in the province that employ many workers, they do not contribute to increasing the average size of Malaga companies because most of them belong to chains whose head offices are located elsewhere. Alicante faces a similar situation: it has a demography - both in terms of staff and company size - very similar to that of Malaga and the same problem of lack of size. So, if the Costa del Sol province lags behind Seville, the same is true of Alicante compared to Valencia.
But Javier Font, secretary of the Colegio de Economistas de Málaga (the professional body for Malaga's economists), takes a step back to consider the overall panorama: he explained that, in general, Spain's productive fabric is mainly made up of SMEs (small-, and medium-sized enterprises), micro-SMEs and the self-employed. Together they account for more than 90% of the country's business landscape. Still, he admits that this circumstance is accentuated in areas such as Malaga.
Font outlined other possible causes, which have to do with the fact that employers become a tad reticent about growth when they reach certain figures. For example, once they go beyond 50 employees they have to accept the constitution of a works council or, that with a turnover of more than six million euros, they are then classed as a large company for tax purposes. So it is this sense of vertigo that slows down the growth of entrepreneurs, according to Font. In fact, he has observed that some entrepreneurs choose to create an additional company rather than allow the original one to grow.
Natalia Sánchez agreed on these issues: she believes that the labour and reporting obligations for larger companies should be applied once the circumstances that make it imperative are consolidated (four years of retaining more than 50 workers, for example, not as soon as that figure is reached), so that this "regulatory step" is smoothed out. She said: "With the current situation, having one worker more or less means a big difference in terms of costs and commitments for companies."
Font added an idea, the scope of which is not limited to Malaga and not even Spain, but which extends to Europe: "It is something cultural: being a big company is associated with having big problems. So, although there are very dynamic companies with a lot of potential, it is difficult for them to make the leap, to grow and become a big company." Soledad Ruiz also pushes the cultural issue: "There is a lack of culture of social dialogue in small and medium-sized companies and it is something very Spanish; they think that having a works council is going to create conflict." She continues: "The larger a company is, the more capacity we workers have to negotiate good agreements: we want companies to be competitive, but we also contribute to the creation of wealth in which we want to participate."
Does the lack of large companies have an impact on the economy? In Font's view this creates a weakness that is particularly apparent in times of uncertainty, when there is economic turbulence: "In times of crisis, a big ship sails better than a small one." He goes on to list the disadvantages faced by small companies compared to large ones. Firstly, it is more difficult for smaller companies to access financing and, furthermore, when they do get it, credit is more expensive, which reduces their competitiveness. José Manuel Cansino added another problem associated with a productive fabric made up mainly of small companies: lower productivity, because, unlike large companies, they cannot make use of the economies of scale inherent to large corporate conglomerates. This is why he argues that European economies are generally less productive than those of the United States or China where there are large corporate giants.
Economist Javier Font, however, advised against becoming obsessed with the creation of large companies, as the flip side of this is the decline in competition: "The world seems to be tending towards this with giants such as Amazon, Google or Ryanair: it seems that we will only be able to buy on one platform, use one search engine and fly on one airline."
Malaga also stands out for its booming start-ups and entrepreneurial projects, especially in the technology sector. Can this contribute to the future of larger companies? Experts disagree on this question. On the one hand, Font points out that the success rates of these types of companies are low, and that they also have the problem of difficult access to conventional bank financing. They tend to depend on private funds that, as soon as they see that the business is not prospering, withdraw and let these incipient businesses fall. For his part, Prof Cansino explained that the process by which start-ups often grow is that, as soon as they are successful, they are usually acquired by other large companies. There are several examples of this type of phenomenon in Malaga, such as the acquisition of VirusTotal by Google around a decade ago.
However, Muñoz explained that data from Andalucía's institute of statistics and cartography (IECA) shows that the information and communications sub-sector, which is where computer-related companies are located, is notable for having large companies. The other derivative of the effects of technology on the size of companies - especially if measured by number of workers - lies in whether robotisation contributes to reducing staffing requirements. That said, according to Cansino, studies reveal that the companies that have incorporated the most advances maintain large workforces.
In any case, in Malaga there are large companies that are not afraid to grow, to export or to have and manage subsidiaries abroad, such as Famadesa, a name to which Font adds that of Unicaja, which is also a company listed on the Ibex-35. Other examples are the Maskom supermarket chain and Medac. There are also Dcoop or Trops, which the UGT general secretary cites as a paradigm of successful cooperation. "These are models that everyone should look to", said Font, adding: "Companies have to overcome that fear, that vertigo that comes with growth, although they don't have to do it in an uncontrolled way."
What needs to happen to increase the number of large companies in Malaga? For the employers and business owners, Natalia Sánchez stresses that it is necessary to work on their consolidation, so that they manage to overcome the critical moment they go through between three and five years of existence and that they can grow from that point onwards by joining forces with others, diversifying or developing organically. To this end, she believes that the emphasis should be placed on advice and support for companies. For example, she pointed out that, even in terms of public aid, companies between three and ten years old are left out because they are neither in their incipient period nor at the most powerful moment of investment, which is when most attention is paid to them. She agrees with Soledad Ruiz, who states that companies need support in order to grow and become more competitive.
Cansino pointed out that what is really effective is to attract companies in the economic sectors that require the greatest number of employees. "We need a more balanced economic structure, not only based on services as it is now", said the provincial secretary of the UGT. However, Muñoz reflects that changing the productive structure is very complex and can only be undertaken in the long term, although he suggests that: "In Malaga this has already happened: it has been transformed from the industrial look it had in the 19th century to its current one of tourism."
Publicidad
Publicidad
Publicidad
Publicidad
Sigues a Cristina Vallejo. Gestiona tus autores en Mis intereses.
Contenido guardado. Encuéntralo en tu área personal.
Reporta un error en esta noticia
Necesitas ser suscriptor para poder votar.