Spain’s Expansion Abroad – a textbook strategy for an ailing economy

As with any difficult, but worthy undertaking, sustained focus and execution are key to achieving lofty goals. Recovering a country’s’ economy through exports is one such goal that any nation would be well advised to have in its arsenal.  A lot has been written about Germany as the model for a high labor cost economy that is one of  world’s leading export nations.  Yet, other high labor cost nations can certainly  compete successfully in the export arena if they focus on defining and maintaining their competitive advantages.  And as Spain’s example clearly demonstrates strong focus on exports and overseas expansion is even more vital in tough economic times.  We discussed this before. Yet what has not been as obvious, is how exports  and country’s international promotion generate direct foreign investment into the exporter country, thus providing a strong added economic benefit and a job creation platform.  Spain should serve as an interesting case study for the U.S. to continue its export expansion efforts and to pursue direct foreign investment into our economy as a by-product of such efforts.

by Evan on Friday, April 08, 2011  Global Edge

As of recent, companies in Spain have been following a common trend of expanding overseas. The country’s ability to grow in foreign markets is on the rise as successful Spanish companies turn their focus to manufacturing and developing new products in emerging markets abroad. Over the last three years, Spain has maintained a 1.8 percent share of world trade despite the rise of China and the Far East. As Spain looks to retain its position as a strong exporting nation by expanding into new markets, the domestic workforce will face steady unemployment.

Businesses in some of Spain’s fastest growing sectors, including technology and renewables, expect to reduce or at best maintain their domestic workforces as they expand into foreign markets. With Spanish companies moving into emerging markets such as Brazil and Russia, the unemployment rate in Spain could remain around 20 percent for several years to come. Companies will make an effort to correct the problem of unemployment while also maintaining further expansion. Many Spanish companies will look to hire upcoming graduates from Spain’s technical colleges and universities ranked third in Europe. Spain’s major obstacle may be unemployment but expansion overseas will continue to provide companies with many opportunities.

Everyday Spain has no less than ten companies making deals with foreign countries meaning exports will continue to be a major aspect of Spain’s economy. Exports to China increased to Spain’s highest levels last year valued at 2.6 billion euros. As government officials continue to promote foreign trade, Spanish companies hope to maintain their success abroad. Expanding overseas is also attracting foreign companies to invest in Spain. Recently, GlaxoSmithKline has made plans to open a large research and development center in Spain to improve its products. This is not the only case of foreign investment in Spain. During the past three years, foreign investment in Spain has increased 5 percent at a time when the European Union has seen a 20 percent decrease. These factors will hopefully produce jobs for the domestic workforce in Spain while also allowing further movement into foreign markets.

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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

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