KITE Invest had the pleasure of recently meeting with the British Chamber of Commerce in Spain in preparation for KITE Invest’s forthcoming Invest in Spain Forum, to which the essential and strategic bilateral relation between Spain and the UK will be showcased. As the President of the British Chamber, Mr. Roger Cooke, plays an integral part in the economic and investment relations between the two countries. Upon discussing Spain post-crisis, Mr. Cooke recounted that it is now “almost fashionable to invest in Spain.”
KITE Invest: We would like to begin this interview by discussing Spain in terms of foreign direct investment and the international perception of Spain. As a result of the crisis, Spain’s main economic sectors have been affected as far as their large scale potential. In this regard, how do you consider Spain as a competitive market for foreign investors and do you see Spain’s competitiveness growing in the near future?
Mr. Roger Cooke: Over the last year we have seen a fairly large change in Spain’s economy. For instance, a year and a half ago the discussion was about Spain being rescued by its European partners. Spain has been hit hard and suffered a lot, especially in terms of its local internal economy, image, perception, and as a result the amount of confidence international investor had in trading with Spain was affected. The last year and a half has seen a massive change, to which some people say it’s almost fashionable to invest in Spain at the moment. Investors of all different types have suddenly reappeared on the scene and are actually spending their money here.
I think Spain started off as a destination for more distressed opportunity-type investment looking for higher returns. One of the challenges the country now faces is making sure that it converts quickly to value added and/or core type of money, which looks for longer term investment and lower return.
The other image from overseas is that everything is for sale in Spain and at massive discounts. No doubt there has been adjustment in pricing, there is more availability to invest – in the financial sector, industrial sector, real estate – but not everything is being sold or gifted to investors. There is a fairly coordinated and logical approach to asset disposal and welcoming international investment.
KITE: Mentioning image and perception, how would you classify Spain’s brand? Do you see Spain’s image improving in the coming years and if so, how would you like to convey that message to UK readers?
RC: Oddly, I think that the crisis is going to be positive for Spain in the long run. Undoubtedly the country was in denial and slow to react for too long, and only took actions after receiving external pressure. Although Spain felt a lot of pain and there is still going to be a lot of pain, I think Spain’s brand is going to come out ahead. The necessary changes are being made and no one is being criticized for not living with the past and changing for the future. If there are going to be changes, now is absolutely the time to capitalize on the fact that the image of Spain is changing.
There are three phases to a crisis. One is going through the crisis and being rescued. Two is putting the economy on a recovery route. Three – probably the most challenging and interesting – is figuring how to become more competitive in an increasingly global market. This is most interesting piece of the jigsaw puzzle for an international investor and for the country itself.
KITE: What are some of main ways that Spain can become more competitive?
RC: I think there is still a disconnect between some of the perceptions held be people overseas and the reality here. From the local standpoint, I think Spain and Spanish people in many areas have a too negative and a too critical approach of their country, their economy and their politicians. On the other side, from overseas, I think there is the opinion of bureaucracy, corruption and lack of available financing, which requires companies to finance themselves outside of Spain. I think all of these areas have to be understood and a lot of it is a communication issue.
KITE: At KITE Invest we firmly believe that there is a direct correlation between economic growth, investment and communications. What value do you place on the importance of countries communicating the right message and at the right time?
RC: It is absolutely critical. Spain has to be proud and has to sell itself. All of the changes that are happening are being adequately communicated. Whether it is changes to the legal system or changes to bureaucracy or changes to the banking system. At times people get tied up with communicating single world brands, but I think there needs to be a coordinated campaign, because all of these varying brands make up the entire brand of Spain. At times other brands or aspects or perceptions are stronger than others, and there needs to be better coordinating amongst these differences. As well as, tying together regional brands and national brands with the corporate brands.
KITE: In terms of the relationship between Spain and the United Kingdom, how is the British Chamber of Commerce in Spain working to promote this relationship and how do you value the Spanish brands that are entering the UK market?
RC: The UK has always prided itself on being a pretty open and transparent economy. Although regulation exists, most Spanish companies that are invested in the UK also see it that way. It is an economy where foreign capital is well accepted, and international investors own most of the big businesses. At a commercial level many Spanish brands have taken a foothold and have become household names in the UK over the last 5 -10 years.
One of the big challenges faced by Spain, the UK and probably all the European countries, is the growth and competiveness is going to come more from outside Europe than from within Europe. As a result, UK and Spanish companies need to figure out how can they work together to access different markets, for instance, Spain is perhaps stronger in Latin America and the UK in the Middle East. This is great opportunity for the UK and Spain to come together; therefore, the more communication, the more contact that there is between businesses of both countries, it can only be positive.
KITE: You have brought up a very interesting point on how the UK and Spain could collaborate and join forces in terms of working with markets abroad. What measures do you think could be taken to align the two countries together in order to approach these various markets abroad?
RC: There are two parts to this. The first is whether or not the governments are supporting this and encouraging this. While this would typically be considered a business environment, the Public Administrations must set the initiatives.
The second factor must come from a communication standpoint, particularly the communication between businesses at all levels, from CEO to technical. Part of the partnering challenge is how the dialogue is created and instigated. At the Chamber one of our greatest challenges is making sure that there is communication between businesses and that there are key networking spaces.
KITE: What other initiatives does the Chamber engage in apart from networking to ensure that businesses connect?
RC: I am a firm believer in that relationships have to be fairly natural. There is only so far that the Public Administration can push and direct collaborations. If there is no interest, it will only go so far. However, there needs to be more and easier access to information, as this will help ensure that the right opportunities are found. Information, in a slight variation of the word communication, is absolutely critical for economic growth.