Spain does not know how to value its entrepreneurs

The self-employed in Spain have been fighting for fairer conditions for decades. (Getty Images)

There is a lot of talk about the American dream, that idea of “everything is possible” that focuses on financial freedom and growth opportunities in a country admired in the world thanks to a simple concept: hard work finds its benefit. As is often the case, not all that glitters is gold and in American society there are many flaws worthy of criticism, but one thing is clear, and that is that professional and personal ambition are as widespread as the risks taken by the workforce. Failure is linked to success and is understood as part of the process towards glory in all types of workers, especially entrepreneurs, a sector that has an agile business creation system and a fairer state and federal tax burden -or at least, more bearable- than in Spain.

If the concept of the American dream in professional terms is so well known globally, what is the Spanish dream?

There are several ways to answer this question: you can talk about the concerns that young people have regarding their professional future, the ability to adapt and reinvent middle-aged workers or much more tangible elements such as tax pressure to those who dream of developing an idea into their way of life.

We will have to start at the end. The reform proposal of the special regime for self-employed workers presented last week to social partners – instead of to self-employed associations – whose details you can review in this article, are further proof of the obstacles that Spain has historically placed on the self-employed. The latest draft of the listing proposal for real income, known last Wednesday, provides for quotas that range between 90 and 1,220 euros per month based on income. Difficult to digest situations occur in the proposition, such as a self-employed person with a net yield of 3,000 euros pay 2,400 euros in installments (in the US I would not pay a cent) or that, at the end of the period, a self-employed person with 37,000 euros of income is quoted half that one with 49,000 euros (that difference is 2% both state and federal in the US). ).

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Demonstration in 2009 to improve the conditions of the self-employed.  REUTERS / Dani Cardona.Demonstration in 2009 to improve the conditions of the self-employed.  REUTERS / Dani Cardona.

Demonstration in 2009 to improve the conditions of the self-employed. REUTERS / Dani Cardona.

It is not an exaggeration to classify the self-employed as true survivors in a jungle teeming with predators and without the benefits of which wage earners enjoy. It is difficult to become obsessed with an idea, in a dream, and survive a host of adverse conditions that could be perfectly avoidable. And it is that adversities are not only those expected in environments where they reign the laws of supply and demand, competitiveness etc, but are imposed by rules of the game that make things very difficult. Therefore, recent surveys that indicate an increase in the number of young pre-university students who dream of entrepreneurship show a change of trend in a Spain which in recent decades has been more akin to civil service and being company employees.

According to the VII Young Business Talents Report, promoted and carried out by ABANCA, ESIC ‘Business and Marketing School’, Herbalife Nutrition and Praxis MMT, 27% of young Spaniards they would like to be entrepreneurs in the future and create your own company, versus being officials (19.9%) or be employees in a company (13.8%). The figures show a slight increase compared to last year, when 26.8% of the youth wanted to be entrepreneurs, and a decrease in public workers (22.6%) or employees (22.3%). However, 82% of young Spaniards He has confessed that he would choose to live abroad to grow professionally. USA (36.8%), UK (15.9%) and Germany (12,1) are their favorite destinations. This speaks volumes about their conception of the ability they will have to make their dreams come true in Spain.

Young people’s entrepreneurship intentions quickly meet reality. According to the analysis of the Labor Force Study (EPA) presented in the first quarter of 2020 (prior to covid-19), the private sector had 532,000 fewer wage earners than in 2007, just before the recession; while the public sector, however, incorporated 284,000 more employees than then. In other words, private companies are very far from the figures prior to the previous crisis, and the Administrations (state, regional and local) have much larger staff.

As is the case in the current crisis, in 2008, the self-employed were the worst hitters.  REUTERS / Juan Medina.As is the case in the current crisis, in 2008, the self-employed were the biggest losers.  REUTERS / Juan Medina.

As is the case in the current crisis, in 2008, the self-employed were the big losers. REUTERS / Juan Medina.

Does bureaucracy make things easier for entrepreneurs?

No. At least as stated by the economist and academic from the Royal Academy of Moral and Political Sciences, Juan Velarde, to ABC before the pandemic.

“This growing administrative power triggers the bureaucracy, which slows economic activity in an extraordinary way and, in addition, breaks market unity, because it turns out that the regulations that apply in a certain area in one community are different from those that govern in another, and different from those that exist in a third … It is a worrying fact, “he said.

In other words, the increase in bureaucracy costs money and makes things difficult for entrepreneurs, something that took into account the world Bank when he studied the Spanish case in his report, ‘Doing Business’, where he places Spain as a country that is not precisely among the easiest to do business with. This context in which the civil servant (He planted all those who have gone through the harsh universe of oppositions) that the entrepreneur does not help to create a mentality marked by the growth, innovation or creativity that they do have other countries. Spain has just over three million freelancers and it is they who have once again suffered the consequences of the umpteenth crisis in their lives. Few and late aid during the pandemic have caused that around 20 percent of businesses do not reopen their doors, and now, the new reform proposal leaves them against the ropes again.

This situation does not serve to make a country, but to cut the dreams of that 27 percent of young Spaniards who they dream of materializing their ideas of business. Only in this way can a conformist mentality prevail instead of an entrepreneurial one. And all this in an atmosphere of constant economic uncertainty, with generations of the workforce anchored in precariousness since 2007. None of this helps entrepreneurship.

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