Spain’s economic downturn began well before that in the US. One can see photos of huge housing developments outside Madrid lying virtually empty. Jobs and credit are scarce. Today unemployment is over 15%. As a result, entrepreneurship is again on the rise after declining post-Internet bubble and 9/11.
In the Universia-Knowledge@Wharton article “Innovation ‘Out of Necessity’: Entrepreneurship during a Downturn,” Ignacio de la Vega, director of the IE Business School’s Center for Entrepreneurial Management and president of the Global Entrepreneurship Monitor (GEM), says “since there are fewer job opportunities today, many unemployed people will have to look for refuge in self-employment.”
Obviously, there are obstacles to successful entrepreneurial activity – fear of failure, lack of financing, diminished demand for goods and services in this down-turning economy, and increased competition locally and globally. None are easy for the individual entrepreneur to deal with – de la Vega suggests a variety of government interventions to encourage banks to ease credit availability and lessen the tax burden on entrepreneurial activities.
In line with the turning to entrepreneurship out of necessity, Spain’s “typical entrepreneur is maturing and aging.” De la Vega suggests that this can be advantageous because more mature entrepreneurs have more knowledge of their sectors and industries. This will help entrepreneurs develop more competitive businesses, even in this very tough environment.
Regarding financing, [t]he entrepreneur contributes part of the funding from his own pocket, which means that there are fewer and fewer [external] sources of funding.
Roughly even numbers of men and women are entrepreneurs, with women starting businesses more often within the services sector. The start-up costs are lower in that sector, and it favors people who work at home. Additional opportunity exists for entrepreneurs in the renewable energy field; Spain is one of the world’s leaders in wind and solar energy technology.
Lessons for the US?
- As jobs disappear, more entrepreneurs will emerge by necessity.
- Unemployment benefits can be a great life-line as one starts their business.
- Services require less start-up capital.
- Use technology as the platform for your business and to market yourself.
For those seeking a job, use your job search as a place to practice entrepreneurial skills. Identify your goal, figure out if you have what it takes to do the job right now, and come up with a plan to get the skills and market yourself effectively to employers. The internet abounds with great recommendations for how to do that – many of my posts address it, too.