Children are treated like kings in Spain. They are allowed to shout in restaurants and run around in shops. Doing the laundry or cooking they normally do not have to learn before they leave their parents’ place which means in general around 30 years.
More individualism is needed to stirr VC market
For the Spanish economy this missing spirit of individualism and independence is rather bad. One good example is the venture capital market. If a youngster needs money to set up an own business, normally the parents are the first ones to address. Private business angels rarely exist. Too bad for those innovative fellows who are not integrated in a strong family network.
There are just a few private Spanish venture capitalists (VC) and the big multinationals normally do not invest in small seed projects. If those do not have an own fortune or get a surety from someone also most of the Spanish banks will deny to lend them money. Also state help is bureaucratic like in many other countries.
Without networking nothing works
This is especially bad for foreigners who settled in Spain and do not have that network like the German photographer André Okada. For the expansion of his Barcelona based model-portal www.okada.spainproductions.com he looks mainly for investors in Germany and the US: “Here I have no chance.”
But the strong dependence on the family influences the Spanish Economy on various ways. Companies like Europe’s biggest ham producer Campofrío, the world hugest sparkling wine brand Freixenet or Spain’s number one bank Santander Central Hispano are run by rich and influential traditional families, which often hinder younger generations to come up and make traditional internal procedures more transparent for the public.
Family helps familiy, but no civic spirit
The best example is Santander Central Hispano’s passed away president Emilio Botín and his clan – one of the most wealthy and powerful families in Spain with mighty contacts up to former Prime Minister José María Aznar and former Economy minister Rodrigo Rato. About 15 years ago Botín inherited a bank from his father which already his grandfather has built up and which his daughter Ana Patricia is likely to take over as the next Botín-generation.
Although the bank is very successful by now, the absolute power of Botín’s family in that listed financial institute, having participations in most of the other big Spanish industrial companies, has led to a bad communication policy and little democratic internal decision procedures, which makes it difficult for business partners to deal with, but also for journalists and shareholders.
“Like in a lot of other big Spanish companies, Botín behaves like he owns the bank, but in reality, of course, he just possesses five percent of the bank,” says Javier Vega, professor at the prestigious IE Business-School in Madrid. “Instead of defending the interests of the shareholders, first he would think of his familiy members” argues Vega. Botín has for instance rarely given any interview during his long banking career. „I do not want to see my face in the newspaper“, he argues. “An arrogant behaviour,” says Vega.
It is the same for Inditex, the world third largest textile retail company. Founder and majority shareholder Amancio Ortega denies speaking to the public – although his young fashion shops Zara have an enormous success all over the world and the company has this year been listed at the stock exchange.
Since the tailor never is present to any company events there exists just one press photo of him. But the case of Inditex reveals another problem Spain has to face in the upcoming years: Who will take over the management of former family run companies, if the children prefer to go other ways as in case of Ortega’s sons and daughters. “One reason why we had to go to the stock exchange and find institutional investors,” says former Inditex-CEO José María Castellano.
Big frustration amongst youngsters in Spain
Many youngsters in Spain would be happy to get an opportunity like Ortega’s children. Because another bad side effect of the traditional family and still patriarchal oriented society is that graduates without good connections face enormous difficulties to get immediately an appropriate job, especially women. In order not to hang around they go on studying or do little side jobs. One reason why Spain on one hand has one of the highest percentage of graduates but on the other hand the highest youth unemployment rate in Europe.
Marcos Guillén is an exception in every way. The graduate engineer did neither rely on his family in business matters, nor did he wait until his 30th birthday to get the first job which would allow him to pay the rent of an own apartment. He set up his own computer company at the age of 20 which he sold in 1994 to create the internet provider Ran Internet. But nevertheless he also experienced the leadership of the old in his country: “It is a problem to be young in Spain, in business they do not take you seriously.”