Interview with Antoni Cañete Martos, President, Micro, petita i mitjana empresa de Catalunya (PIMEC)

13 Jan Interview with Antoni Cañete Martos, President, Micro, petita i mitjana empresa de Catalunya (PIMEC)

What makes Catalonia an ideal launchpad for a successful business?

One of Catalonia’s key elements is the diversity of its economy, which allows for many opportunities. Catalonia has a significant agri-food industry, which is becoming increasingly important. Additionally, it houses prominent chemical and automotive industries. We have also grown a robust and diverse healthcare sector, with some of the leading hospitals in the world that practice state-of-the-art specialized treatments. The region has also become a global reference in digital transformation and the creation of a digitized economy. Tourism is one of our most productive sectors, alongside the services sector. Our economy is a solid mix of primary, secondary and tertiary sectors. Catalonia is now one of the top places in the world for startup creation, and we are actively driving this rapid growth by creating spaces for new economies, such as hosting the Mobile World Congress.

One of the region’s key drivers is its geographical location. Situated in the north of the Iberian Peninsula, the region brings Spain closer to major developments in Southern Europe. We have a very high level of connectivity. Our airport has the highest number of connections with Europe, and we are working to increase international connections. Our climate and living conditions are excellent, with favorable weather, geographical features and gastronomy. Our Mediterranean lifestyle makes Catalonia an attractive place to live and do business. More and more international fairs and congresses are being held here and many lead companies aim to establish themselves in Barcelona; 80% of these congresses already have installations in the city, which adds to its appeal. Another attractive aspect is our long-term investment in talent; the region is a key center for knowledge. Barcelona has multiple educational centers and some of the world’s best business schools. Major changes happening in the world will only be led by countries and regions that invest in knowledge, which makes us stand out.

What are Micro, Petita i Mitjana Empresa de Catalunya’s (PIMEC’s) main mission and key focus areas?

PIMEC has become the most important business organization in Southern Europe. We are a social and economic agent with the highest level of representation. We participate in social dialogue tables and negotiate with governments and representatives. This gives us full visibility and the ability to analyze problems and propose solutions. We facilitate dialogue on key issues and propose changes to our methodology. PIMEC has a unique way of working; we are a data-driven organization. Our studies department, the PIMEC Observatory, is where we base all our data work. From here we initiate discussions on issues that require change such as absenteeism.

Our objective is for small and medium-sized enterprises (SMEs) to have a strong and independent voice to address their challenges, propose solutions and advocate for their needs. SMEs represent 99.8% of businesses in Spain, Catalonia and Europe. We are the engine of the economy, yet our voice is often unheard and inadequately defended. SMEs lack the lobbying mindset that large companies have, which means their presence in decision-making spaces is minimal. This has resulted in many laws benefiting certain types of companies over others. At PIMEC, we emphasize three important concepts. First, we must be business activists. This means actively participating to defend our interests with the ultimate goal of ensuring SMEs have a seat at the table where decisions are made. For this reason — after 50 years of democracy — PIMEC has succeeded in gaining representation in parliament. This business activism has enabled us to grow by 20%. PIMEC is also committed to the planet and has advocated for the energy transition. We remain dependent on nuclear energy and have not yet reached our goals. We are raising awareness in society and have created a carbon footprint calculator for SMEs.

We advocate for SMEs to have a voice in leadership positions and for laws to be created with small businesses in mind as this is crucial for economic growth. We successfully reduced fiscal pressure by 20% and implemented the first-ever SME-specific legislative package. We recognize how rapidly the world is changing and have established an organization that ensures SMEs have a voice. We have also reflected on the need for a new form of capitalism — an inclusive capitalism that moves away from the controlled neoliberalism that privileges certain systems while not opposing the system entirely. Inclusive capitalism demands a fair economy with competitive practices and price configurations that allow businesses to thrive. PIMEC is making proposals for this new model to enhance the competitiveness of our countries and businesses. We see alliances with the United States as a vital strategy for achieving our goals. While some operate within theoretical economic frameworks, we focus on practical and business-driven approaches.

We also created the first social action foundation in Europe within a business organization to help with social issues. When the 2008 crisis hit, Europe did not have a culture of second chances. When the head of the US SME sector came and explained how they helped SMEs, we created a second-chance program to help entrepreneurs during the crisis have this opportunity. We made a short film to explain the importance of entrepreneurs, how they contribute and the culture of second chances. The short film won more awards than any other in history, including the Catalonia Award, the Goya Award and the International Short Film Award. We even went to the Oscars. It is rare for a program to have such an impact. We have already helped over 3,000 people, and 80% of them have gone on to start new ventures as a second chance. We have changed the law in Europe and Spain regarding second chances.

What major challenges do SMEs currently face and how is PIMEC tackling these hurdles within Spain and the EU?

When the economy in Spain and around the world performs well it can often lead to distortions in the market such as an increase in absenteeism. We demonstrated this with data and proposed solutions. We were the first to bring this issue to the table. It is interesting to note that when comparing absenteeism between employees in companies and self-employed individuals, the latter showed 20% less absenteeism. Absenteeism is a multi-layer challenge that involves those issuing sick leave, the testing process and the companies themselves. Similarly, we have tackled the issue of bureaucracy, which is a significant problem. Europe is regulating this, and we have shown with data that we need to reduce bureaucracy in our economy. As members of the European Association of Craft, Small and Medium-Sized Enterprises, we have spent a long time explaining that dealing with new regulations for companies with 1,000 employees has a minimal impact of 0.1%, while new regulations for companies with 10 employees represent an impact of 10%. Therefore, the same requirements cannot be applied to both.

In Europe, we have led a package of measures for SMEs. Although progress is slow, we are working at the European, national and Catalan levels because administrations usually create a general rule, adapt it to a country and then refine it at the regional level. PIMEC has led the most important movement in Spain and Europe regarding payments, which are currently detrimental to SMEs. In 2009, we created a platform with associations from all over Spain and organized the first business rally in Spanish history. We went to the Congress of Deputies and explained the problems created by our economy. We created a platform against late payments because Spain had the worst payment delays in Europe. Laws allowed large organizations to pay smaller ones whenever they wanted. We spearheaded this movement, and the platform has managed to change laws and reduce payment terms. This effort is part of the SME Relief Package, which simplifies bureaucracy for SMEs, separates them from larger corporations and ensures they have fewer requirements than large companies.

We are also critical when it comes to competitiveness and fairness, particularly in terms of taxes. Previously, SMEs faced a higher real tax burden than large corporations. By advocating for fairer taxation, we managed to reduce the tax burden on Spanish SMEs by 20%. Fairer taxation allows for greater competitiveness and resilience, which ultimately leads to talent and investment attraction. Public procurement is another fundamental challenge for SMEs that we have put on the table. We are working on policies to ensure that SMEs can access public procurements to grow in size. We are critical when it comes to competitiveness and fairness. One major problem with Europe is that decisions are slow because they require a lot of consensus. We need to build a stronger Europe to respond to the situations and challenges ahead. The world is rapidly changing and more profoundly than we can see or explain. If we do not make rapid decisions, we will fall behind.

What efforts is PIMEC making to upskill the workforce and address knowledge gaps in key sectors?

One of the most important issues is working to create, retain and attract talent. In the creation phase, all the resources we allocate are limited. We see ourselves as a formative agent because employers in Spain and Catalonia pay monthly contributions to ensure resources for the continuous training of workers. Consequently, both workers and employers share the responsibility for continuous training. PIMEC provides the most continuous training in Catalonia. We respond quickly and concretely to the needs arising from any changes. We participate in the governing body under the joint commission for professional training law. This commission includes the most represented unions and the government and works to integrate professional training. We also collaborate with universities. For instance, we have created — together with the Open University of Catalonia — an innovative barometer that aggregates big data from all job offers and identifies training needs in real time. This was something globally unprecedented.

We are addressing a significant issue related to supply and demand. Educational institutions are not adequately meeting the demands of the business world. Finding qualified personnel has become the primary challenge for companies, with absenteeism and bureaucracy following behind. We are working to determine skills that need to be developed. Universities are often slow to update their programs, and we are working to align supply and demand. We also focus on guidance and helping individuals understand what they should pursue. For example, there is a shortage of installers that is preventing us from completing the energy transition. We need to inform people that studying this field guarantees employment. Similarly, we must communicate to educational centers the importance of training individuals to meet market needs. There are three types of training: those provided by universities or regulated institutions, those for unemployed individuals such as occupational training and continuous training for workers and employers. We have taken the needs and policies of the first two types to the local level. To address the third type of training, we have created a professional body that includes the government, workers and employers. This entity is a crucial launchpad for training development.

What is PIMEC doing to digitally enable SMEs and help them take advantage of new digitization programs?

Digitalization and technological changes are giving SMEs a level of competitiveness never seen before in history. With limited resources, it is now possible to access advanced technology. However, there are challenges related to the mindset, capacity and vision of entities working in this area. Europe has made a significant effort by allocating resources to avoid falling behind in innovation, particularly through the NextGenerationEU funds. When these funds arrived in Spain, a portion was specifically dedicated to a digitization program for SMEs. However, SMEs need to be informed about these opportunities and require guidance to take advantage of them. As an organization, we work closely with businesses to assist and represent them. One such initiative is the Digital Kit program, designed by the government in collaboration with PIMEC. It enables SMEs to access digitalization and digital transformation without bureaucracy. It is a good starting point, but there is much more to be done in terms of policy to support SMEs.

How important is internationalization for Catalonian SMEs?

We differentiate between helping companies export and supporting them in their internationalization. We have a department within PIMEC dedicated to assisting businesses in both areas. SMEs often experience low sales volumes that do not justify hiring personnel to manage exports. Although companies often have excellent products with competitive pricing and technology, these goods often remain unsold because no one is promoting or explaining them.

We help SMEs identify which products have competitive potential and evaluate opportunities. We stress the importance of having a professional for export activities. To address this, we hire export directors who work across multiple companies. In this way, businesses can begin exporting and grow substantially with minimal economic investment. We also offer specialized export managers with expertise in specific countries. When a company wants to enter a particular market, they connect with these professionals for tailored support. We are also frontrunners in internationalization. When Eastern European countries opened up, it was challenging for businesses to enter these markets because they were not yet fully accessible. To address this, we set up a landing area for internationalization in Romania, which included an industrial park with small facilities for SMEs to establish themselves. This PIMEC-led project is the only successful implementation of its kind, and the pilot program is expected to expand to more countries.

What assistance is PIMEC giving to companies looking to enter the USA?

Entering the US market is complicated. For example, industrial products have specific regulations and standards that differ from European ones and require significant investments to penetrate. PIMEC has an agreement with various areas in the USA such as Virginia Beach where companies setting up shop are allowed special conditions. We have done this to expand possibilities and generate further agreements for market penetration. Our strategy in the USA is to work through agreements with local companies. These alliances allow our teams to share information. Our products are adapted and gain competitive advantages. The USA and Europe have the necessity and obligation to build together; we will only be able to build a sustainable future if we work together to provide the right responses to oncoming challenges.

How do partnerships between SMEs help to strengthen their capacities, such as synergies created through the electrical manufacturing alliance COFME?

When we come together, we not only add but multiply — in some cases exponentially. COFME is a project that has been around for 27 years. It unites nine companies that manufacture electrical materials. While these family-owned businesses originally faced more challenges than larger ones, when we united to internationalize, we managed to create a catalog similar to what large corporations offered and multiplied our impact. By joining forces and offering a portfolio of high-quality products at good prices, we greatly reduced risks in our internationalization efforts. We focused on Singapore, Southeast Asia, Dubai and Mexico to expand our operations. We have been establishing ourselves in different parts of the world together. COFME is an excellent model of how to compete with companies like Siemens in the globalized world.