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Weekly UpdatesThe employment target is highly ambitious to create 100,000 jobs in the 22@ Barcelona District versus around 25,000 today. Over 900 new firms have set up there already. The 22@ Barcelona District anticipates that around 20 to 25% of the workforce in these new firms and knowledge-based industries could be from the international community, creating a demand for schooling to support an additional 5 to 10,000 children from the international community.
By the time of our study, a good deal of infrastructure has already been put in place, almost 2 million square metres of the 4 million square metres of new development planned had been built or was in progress. The District had around 180 million euros of investment in new centralised heating and air-conditioning, electricity distribution, pneumatic waste disposal, telecommunications infrastructure, including extensive dark fibre, and smart traffic management systems.
The city has taken a strategic approach to the development of this district, balancing the creation of new employment, mixed residential development including social housing, live-work spaces, relocation of universities, and the development of leisure facilities, new green spaces, and rapid transportation systems both within the district as well as between it and the rest of the city. The objective was always to exploit the centrality of this district and dramatically increase the density of employment and workspaces, rather than see new industries develop on the edge of the city.
Barcelona and more generally Catalonia has been a leading exponent of industry clusters since the 1980's. In the 22@ District takes this to a new level with a focus on four industry clusters--ICT, Media, Bio-Medical, and Energy. Each cluster involves a dedicated locality within the 22@ District, the relocation of leading firms within those industries, research centres, university departments and their technology transfer offices, dedicated space for SMEs, as well as provision of space for start ups, incubators for new ventures, and appropriate residential and leisure amenities. Such a clustering approach, the triple helix, has been more generally exploited, but what makes Barcelona and the 22@ District unique is the proximity not only of the four clusters to the city centre, but also to one another.
The strategy for economic development of Barcelona recognises that innovation occurs not only within each of these four industry clusters, but also through interaction and collaboration between them. The physical proximity of the firms and institutions, and the physical proximity and engagement between the skilled knowledge workers within them, is expected to deliver greater innovation and the faster exploitation of that innovation both locally and internationally. What we find in Barcelona, therefore, is not only the regeneration of the physical infrastructure of the city but, in the 22@ District, the execution of a strategy that integrates, economic, physical and social regeneration with investment in economic and social programmes as much as in property development. The challenge the city recognised was how to make this not only a hub of innovation locally, for Catalonia and for Spain, but how to do this internationally, and what role the international community that was already present might play.
The challenges faced by the city authorities
The goal of the city is highly ambitious: it is to make the 22@ District the city's new hub for innovation, especially in the knowledge intensive industries. Our research highlights five major challenges:
* The human capital was originally not aligned with the needs of industry clusters, with only 15.2% of the working age population of this district educated beyond 18 years of age (Ajuntament de Barcelona 2007)
* The incipient level of local entrepreneurship was very low as measured by the Global Entrepreneurship Monitor (2007). Adult-age participation in high-expectation entrepreneurial activity is just 0.2% in Spain, the lowest within the EU, and contrasts with observed levels in North America, Australia, Ireland, New Zealand and the United Kingdom, which range from 0.8% to 1.6%
* Venture capital funding is crucial to attracting firms and supporting start ups in industry clusters such as those developing in the 22@ District. However, early stage funding is scarce, especially under one million euros (Guillot 2006)
* Large firms, especially those headquartered in the region, are 'essential to the innovation system', (EU, 2006). However, Barcelona has historically had few large firms outside the financial services industry, with most local Spanish firms selecting Madrid as their main headquarters and international firms favouring Madrid as their main administrative centre.
* Barcelona's attractiveness to members of the international community is not reflected in its business linkages to other global cities (Taylor 2003). This analysis shows that its global connectivity is inferior to that of Stockholm, Dublin and Madrid and that its international connections to Latin America, surprisingly, lag behind Cologne, Dusseldorf and Manchester.
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In summary, while Barcelona is highly attractive to the international community at the level of both individuals and firms, this does not translate into the same level of international engagement and interaction with major firms and institutions as occurs in other global cities. Further, some of the key enablers recognised by international research for innovation and transformation, including attitudes towards entrepreneurship, the availability and access to venture capital, the presence of large firms in the local industrial landscape, and strong and established international business connections, are weaker in Barcelona and Spain in general.
While these represent some of the challenges the city faces, it also has the opportunity to build on past experience and some significant assets. For instance, Barcelona has been and continues to be a leader in undertaking public sector-led initiatives for economic transformation, including pioneering industry clusters and the establishment of Spain's first Science Park which is now serving as a role model to other regions in Spain (Reichert 2006). There is also a significant international community already present in Barcelona and in the 22@ District, representing 13.1 per cent of the population in Sant Marti; this community is highly educated and has the potential to raise the skill base of the district, as well as improve the relatively low level of local entrepreneurship activity.
THE STUDY
The study whose results are reported here included use of existing data on international comparisons of entrepreneurship, urban clusters, transformation to the knowledge economy, and local demographic and economic indicators. We particularly included data from studies of other cities in Europe and North America, including Geneva, Otaniemi/Espoo, Austin and Montreal.
Second, thirty two face-to-face interviews were carried out between February and April 2007 with leading members of the international community, local institutions and local firms with a high degree of international engagement. The interviewees included members of nine different nationalities, self-employed and freelance professionals, local and international entrepreneurs, TV and press journalists, middle and executive management in international companies, local and international business and academic institutions, human resource (HR) directors from international firms, relocation companies and members of the 22@ District Executive team. The interviews covered a number of areas critical to understanding the extent to which the international community was already engaged with local firms, institutions and the community, and the reasons that inhibited greater engagement.
Third, an on-line survey, conducted in March and April 2007, targeted 287 influential members of the international community. The response rate was over 40 per cent (124 respondents). Names of people to be included in the survey names were supplied by international firms, relocation agencies, entrepreneur organisations, local economic development groups, the 22@ District, and through personal contacts and individual recommendations. While by no means a scientifically selected group, the survey's respondents seem to represent a valid cross section of the target communities that Barcelona is trying to reach and engage with, as confirmed by discussions with the 22@District Marketing and Business Development Group.
We used cognitive cluster analysis on comments from the interviews and the survey to determine key themes and issues raised. These key themes were then validated in a workshop with 12 members of the international community and members of the Ajuntament. A focus group then verified findings and brainstormed ideas for increasing engagement between local and international newcomers. Finally, the findings were subjected to a review with the Ajuntament and a prioritisation workshop with members of the Executive team for the 22@ Barcelona District.
The sections below present the main findings from both the interviews and the survey. These overlapped considerably, with the survey responses adding issues with communications in terms of local knowledge about the scale, scope and opportunities offered by the 22@District and the level resourcing of the project team charged with the economic and social development of the 22@District.
The topic most relevant here related to the general barriers to engagement, seen both from a business-to-business perspective and from the perspective of those seeking employment with local firms. Responses covered both work and personal issues: Employment opportunities and pay levels: the lack of major national and international firms headquartered in Barcelona limit career opportunities and pay levels within local firms are perceived as being low by international standards; Language in the work environment: the working language is overwhelmingly Catalan, as is the language for social exchange within business. This language dominance extends to the internet and the web presence of many firms and to their intranet. The international community is ready to invest in learning Spanish as this investment can be exploited elsewhere in Spain but willingness to learn Catalan is much lower and even members of the Spanish community perceive a glass ceiling beyond which even Catalan speakers who are fluent but for whom Catalan is the second language are unable to progress; Work Culture and organisation: the dominant work culture is perceived to be very hierarchical, with decision-making almost exclusively executed by the CEO, proprietor or senior divisional heads of a business. Similarly, access to these executives was reported as being difficult both from both within the firms or institutions as well as from outside; Openness to new ideas and risk: local firms were perceived as being unwilling to share information, jointly progress new ideas or take the risk of being an early adopter, say, of new technologies, practices or business models.
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