BARCELONAInnovative & Creative Business

Continued on Page 2

FINANCIAL TIMES SPECIAL REPORT | Tuesday March 22 2011www.ft.com/barcelona­2011 | twitter.com/ftreports

Art andindustrymake for agaudy mix

Barcelona has neverbeen afraid of the new.This is, after all, thecity that in the 13th

century opted for a form of gov-ernment closer to democracythan most other systems of thetime – the Consell de Cent, orCouncil of One Hundred, whoseimposing assembly hall adornedwith Catalan flags can still beseen at the municipal offices inthe old city centre.

The Council lasted more thanfour centuries, its durabilityattributed by Robert Hughes,author of a cultural history ofBarcelona, to the fact that itwas flexible and not completelydominated by wealthy mer-chants. “A leather worker, a tai-lor, a cooper, or a smith mightsit in session with a tradingbanker or the biggest spiceimporter in Barcelona in termsof voting equality,” he wrote.

But the innovations of Barce-lona, capital of Catalonia andSpain’s second city, did not stopat politics and administration.

This is a city of Europeancommerce and industrial revolu-tion, but also of art and culture.Barcelona is the city that nur-tured artists Pablo Picasso andJoan Miró, and the home ofarchitect Antoni Gaudí, whoselong unfinished Sagrada Familia(Holy Family) church wasfinally consecrated last year byPope Benedict XVI. Not every-one likes the works of Gaudíthat dominate parts of Barce-lona, but no one ever accusedhim of lacking originality.

Barcelona has repeatedlyrebuilt and modernised itself tomaintain its hard-won prosper-ity, as it did in order to make anexemplary success of hostingthe 1992 Olympic Games.

Now it must do so again, asCatalonia, Spain and indeed thewhole of southern Europe strug-gle to emerge from a globalfinancial crisis and the subse-quent eurozone sovereign debtcrisis – a challenge that hasalready driven Greece and Ire-land into the arms of rescuersfrom the European Union andthe International MonetaryFund, with Portugal perhapsnot far behind.

Julia Prats, assistant profes-sor of entrepreneurship at Iese,the Barcelona-based businessschool, says these crises seem tohave galvanised Barcelona soci-

ety into action after a decade orso of shrugged shoulders andunproductive nostalgia over thesuccessful initiatives of the past.

“The crisis is helping to pulltogether civil society and thereare a lot of initiatives from peo-ple not involved in politics.”

Ms Prats is part of a group oforganisations, entrepreneursand professionals called Barce-lona Global that is trying to pro-mote competitiveness, innova-tion and technological researchin the city, while improvingsocial cohesion, education andBarcelona’s international image.

For years, both the privatesector and government –national, regional and municipal– have targeted promising secto-ral clusters for investment inthe 27 municipalities of greaterBarcelona that together accountfor 60 per cent of Catalonia’s

gross domestic product. Suchgrowth businesses include fash-ion and design, an industry thatbuilds on Barcelona’s traditionalstrengths in textiles and archi-tecture and takes advantage ofthe creative flair of local andforeign inhabitants.

Barcelona and Catalonia havealso invested their hopes – andtheir money – in biotechnologyand biomedicine, and in high-tech electronics and servicescompanies that can movebeyond their involvement intraditional industries such asvehicle manufacturing to applytheir skills to the electric cars,aerospace applications andinformation technologies of thefuture.

Then there are the servicesconnected to tourism: cruiseship visits, hotels, trade fairs,and food, with Catalan chefs

such as Ferran Adrià alreadyrenowned throughout the world.

“Barcelona is a very diversi-fied city. We don’t have one sec-tor, we have several, old andnew: food, cars, housing, tour-ism,” says Jordi William Carnes,deputy mayor. “What we’vedone with all of them is helpwith their renewal.” BarcelonaActiva, the municipality’s localdevelopment agency, says itsupports more than 1,000 newprojects a year, and hosts 115companies at its business “incu-bator” and technology park.

Yet the length of the currenteconomic crisis affecting thewhole of Spain, and the eco-nomic austerity plans designedto cut the nation’s annualbudget deficit and limit thegrowth of government debt, are

Victor Malletexamines how creativeand design businessesare coping in the wakeof the financial crisis

Overseas investment intoBarcelona

Source: FDI Intelligence fromFinancial Times Ltd

Total project investment ($m)

0

100

200

300

400

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600

2003 04 05 06 07 08 09 10

MORE ON FT.COMFor more on FDI in the city, go towww.ft.com/fdibarcelona

Vibrant city: Barcelona is regarded as a world centre for design and architecture Dreamstime

Inside this issueAutomotiveGlobalisationhas forcedtraditionalmanufacturersto explorenew avenuesPage 2

Biotech Lack of alocal champion and offunding raise questionsabout the prospects forthe capital hungry sectorPage 2

FootballRunning thecity’s hugelysuccessfulfootballteam takesmore than

just skill on the pitchPage 3

Profit tonic Fever­Tree,which makes premiumdrink mixers, explains whythe group is expanding inSpain Page 4

Publishing Barcelona hasa rich literary historyPage 5

Gourmet reinventionThe chef behind El Bulli isshutting the restuarant toopen a culinary foundationPage 6

GuestColumnAlfonsSauquetexplains whyhe thinksBarcelonahas become a hubfor innovation andcreative industriesFT.com/barcelona­2011

More on FT.Com

2 ★ FINANCIAL TIMES TUESDAY MARCH 22 2011

Barcelona: Innovative & Creative Business

Gaudy mix: art and industry

already squeezing budgetsat every level of Spain’spublic administration. Thatin turn has raised questionsabout whether new indus-tries in particular dependtoo much on official sup-port, and whether biotechor computer software willever be able to provide asmany jobs as constructionand heavy manufacturingdid in the past.

Joan Sureda, director-general of industry in theCatalan government and aformer executive of Pep-siCo, accepts that labour-intensive industries are vul-nerable but says he is deter-mined to prevent disinvest-ment by foreign companies.“One of the big issues wehave will be not to lose asingle company in thiscountry, even if we knowit’s impossible,” he says.

Mr Sureda neverthelessdefends government sup-port for Catalonia’s export-oriented businesses as amodel that was shown towork in Germany and saysinvestment in innovationhas been rising steadily as ashare of GDP.

Big companies, of course,are always happy to benefitfrom government hand-outsor incentives, but they arealso eager for good policies.

Hewlett-Packard – thetechnology company thathas its global printing and

imaging research centrenear Barcelona andemploys nearly 3,000 in andaround the city – led for-eign multinationals threeyears ago in establishing afoundation to support inno-vation, promote Spain andlobby the government toheed the concerns of foreignbusinesses.

HP is a typical investor inthe sense that it moved itsmanufacturing from Spainto Asia a decade ago, butretained some high-valueresearch and developmentand management activitiesin Europe.

“Sometimes you get theimpression that if you don’tbelong to the Ibex-35 list ofcompanies, you don’t mat-ter,” says Irma Jiménez,HP’s chief of governmentalaffairs for Iberia and direc-tor of Innovación España,as the foundation is called.

Ms Jiménez says thatSpain lags behind its Euro-pean peers in terms of pub-lic investment in researchand development. Mean-while, foreign multination-als are pushing for bettertax and financial incen-tives, stronger links

between business and uni-versities and improvementsin education and skills.

Barcelona residents, fromHP executives to youngsoftware entrepreneurs,agree that the city’s dyna-mism, its transport infra-structure, pleasant lifestyleand proximity to the rest ofthe Europe make it a goodplace to do business –although it is hamperedlike the rest of Spain by thepolitical rivalry betweenthe centre and the autono-mous regions and betweenthe regions themselves.

Ms Prats of Iese says sev-eral businesses are leavingBarcelona for Navarra,where taxes are lower, andshe is not alone in com-plaining of the “horrible”and costly mess of a multi-tiered administration ofnation, regions, provincesand municipalities.

But the vital questions towhich investors in Barce-lona need answers arethese: Is public financingfor innovative and creativecompanies a substitute forvigorous private invest-ment? Can bureaucratschoose winners? And is thefunding sustainable in anage of austerity?

“I believe a bit in thecluster thing, but I’m a lit-tle afraid when the govern-ment decides,” says MsPrats. “A bit of governmentis okay, but let’s not allowthem to decide too much.”

ContributorsVictor MalletMadrid Bureau Chief

Miles JohnsonMadrid Correspondent

Edwin HeathcoteFT Architecture & designcritic

Ángel Gurria­QuintanaFT Contributor

Pascale DaviesFT Contributor

Tom GriggsCommissioning Editor

Steven BirdDesigner

Andy MearsPicture Editor

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Let’s notallowgovernmentto decide toomuch, saysJulia Prats

Continued from Page 1

From car door panels to hybrid batteries

Of all of Barcelona’ssurviving heavy indus-tries, few have beenforced to transform

themselves in the face of glo-balisation as much the city’svehicle manufacturers.

The Catalan automotiveindustry, which in 2009 made up10 per cent of the region’s out-put and 15 per cent of itsexports, has suffered a slowlong-term decline because ofincreasing competition fromemerging markets, combinedwith the impact of the economiccrisis on its domestic economy.

Spain’s share of vehicle pro-duction within the EuropeanUnion fell below that of easternEuropean countries for the first

time in 2007, while the numberof vehicles produced in Catalo-nia was 120,657 lower in 2009than in 2004, according to datafrom the Catalan government.

In an effort to combat thiscombination of vigorous foreigncompetition and a falling shareof exports to the European mar-ket, the region’s car industryhas begun to refocus on green

and electronic technologies toexport to other, faster

growing parts of theworld.

In March 2009, theCatalan govern-ment approved aprogramme forgreen vehiclesas part of a 10-year strategyfor the region’scar manufac-turers to ensurethe local indus-

try maintains itsweighting in Cata-

lan gross domesticproduct, and that

companies remain com-petitive in the global

marketplace.

Now, both the regional gov-ernment and local players in theautomotive technology sectorare hoping that a rebalancingtowards high-tech and green cartechnology will allow one ofCatalonia’s most importantindustries over the past 100years to remain relevant duringthe next century.

While the Catalan automotivesector is headed by two largeforeign vehicle assemblers, Seat(owned by Volkswagen) andRenault, a number of local sys-tem and component companiesoperate on a global scale,attempting to diversify theirbusinesses towards high-techand environmentally-focusedtechnology.

A report commissioned by theregional government last yearargued that “electric vehiclespresent an opportunity for theCatalan automotive sector toturn this situation round. Acapacity to produce green vehi-cles is not only an opportunitybut a necessity as, at first sight,the automotive sector’s futureseems to rely on getting on thisbandwagon”.

One company emblematic ofthis shift is Ficosa, a family-owned car parts manufacturerfounded in 1949 that has movedquickly to start producing anarray of green and electronicauto gadgets. These includetechnology to detect when adriver falls asleep at the wheel,and paper-thin car aerials.

In 2005, Vicenç Aguilera, headof research and development atFicosa, made the recommenda-tion to the company’s board tobegin shifting its strategic focusaway from making simple steeland plastic-based car parts, andinto electronics.

Focusing on three core areas –electronic safety devices, wire-less communication, and hybridand battery technology – Ficosanow invests 4 per cent of itsturnover in research and devel-opment.

“In the year 2000, the com-pany was in the process of glo-balising, and realised the needto invest in its own researchand development programme,”he says from the company’s6,000 square metre “innovationcentre” in Villadecavallis out-

side Barcelona. “We made theargument to move into what wecould see was the growing over-lap between the auto sector andelectronics.”

The Villadecavallis factory,previously used by Sony to man-ufacturer television sets andother home electronics, hasbecome the centre of Ficosa’sdrive to develop new technol-ogy, where it manages a portfo-lio of more than 600 active pat-ents and serves clients includ-ing Continental, the tyre group,and Hewlett-Packard.

Another Barcelona-based com-pany moving towards green cartechnology is Applus, Spain’slargest certification and carinspection company that hasallocated €7.8m to examineways to service electric andhybrid cars.

Applus, which employs 11,000globally and in 2007 received aninvestment of €1.48bn from Car-lyle – the largest private equityinvestment in Spain at the time,has said that it is aiming to gen-erate 15 per cent of turnoverfrom high-tech services devel-oped over the past four years.

As part of this strategy thecompany is investing in sourceand supply batteries, developingand testing safer types of chas-sis, and constructing a servicingsystem for electric motorcycles.

A study into the benefits ofgreen car technology for theCatalan regional governmentargues that companies in theregion are well placed in theelectric motorcycle industry,helped in part by demand fromthe large metropolitan area ofBarcelona, and closeness toother European export markets.

Ficosa’s Mr Aguilera says thatthe process of shifting the focusof businesses such as histowards innovative technologi-cal products for cars will enableFicosa to remain rooted in Cata-lonia while continuing toexpand in developing markets.

“The roots of the company arehere,” he says. “If you want tobe a leader, you need to be atthe front. Ficosa came into thispart of the car business as afollower. But you can’t expandyour business unless you putbetter solutions, and better tech-nology in front of your clients.”

AutomotiveGlobalisation hasforced traditionalmanufacturers toexplore new avenues,says Miles Johnson

Hub faces intense competition

Barcelona is a city thatmust play to its strengths.This was the philosophyadopted by the Catalan gov-ernment when decidingwhich research-based indus-tries would represent thefuture of the region’s econ-omy after the end of theFranco period.

Family-owned pharma-ceuticals companies hadexisted around Barcelonafor more than half a cen-tury and an abundance of

hospitals and universitiesmade the city an ideal petri-dish to cultivate existingresearch talent in life sci-ences and biotechnology.

“There was a strong, gov-ernment-led strategy tobuild a research base herein the 1980s,” says Montser-rat Vendrell, chief execu-tive of Biocat, a local gov-ernment-fostered umbrellaorganisation set up to pro-mote the biotechnologyindustry within Catalonia.

“We had the right ingredi-ents here in terms of hospi-tals and a consolidatedpharmaceutical sector, andthis was topped with theright management ofresearch and a scheme torecruit intentional talent.”

After a regional govern-ment-led drive to create anetwork of independent

research centres in the1980s, along with a schemeto recruit researchers fromabroad to join them, thenext decade saw a boom inscience parks being builtaround universities, helpingto foster research projectsbetween academia and com-panies.

This focus has helpedBarcelona become a centreof excellence for biotechnol-ogy in Spain, with almost aquarter of all Spanish bio-tech companies located inBarcelona.

The number of new com-panies being established inCatalonia is growing at arate of 30 per cent a year,while more than 60 per centof European researchgrants coming to Spain arenow awarded to Catalonia.

The region also benefits

from the presence ofMareNostrum, one of themost powerful supercom-puters in Europe, which in2006 saw its processingcapacity increased becauseof the big demand from sci-entific projects.

However, in spite of theseefforts, Spain and Catalonialack a local champion thatcan compete in scale andscope against the world’sleading companies.

Almirall, Spain’s largestpharmaceutical company,Barcelona-based and valuedat €1.2bn ($1.67bn), is smallin international terms, as isits peer Zeltia.

“There is no very largeSpanish biotech company,and this is important,” saysMs Vendrell.

“We have medium-sizedpharmaceuticals companies

located here in Catalonia,but nowadays the size youhave to achieve to be com-petitive is crazy. Even ifthey merged all of them, itwould still be difficult.”

Catalonia faces stiff com-petition from other biotechhubs in Europe, such asCambridge in the UnitedKingdom, and Flanders inBelgium, and researchersalso say that there is a lackof international privatefunding available, in spiteof local venture capitalgroups.

Ms Vendrell argues thatthe nature of the biotech-nology sector, whereprojects need large-scaleinvestment and many yearsbeing nurtured frominfancy to market, meansthe state can play a role inproviding early capital forimportant projects thatcould otherwise be ignoredfor being too risky.

“With biotechnology, youreally have to go a little bitfurther than you would doin other areas, since we aretalking about very riskylong development processesthat are far from the mar-ket,” she says.

Joaquim Vilà, professor ofstrategic management atBarcelona’s Iese businessschool and an expert in bio-technology companies, saysgovernment schemes to pro-mote the sector in Catalo-nia must merely augment,rather than crowd out initi-atives funded by privatecapital.

“Government is not analternative, but a comple-ment to private invest-ment,” he says.

Fledgling local companieshave been helped by theemergence of private inves-tors such as the €67m bio-tech investment fundlaunched by the Barcelona-

based venture capital groupYsios Capital Partners.

In 2009, Ysios and the Cat-alan savings bank, LaCaixa, made a €5m invest-ment in Sabirmedical, acompany based in the Bar-celona Science Park whichis developing a non-invasivedevice that continuallymeasures patients’ bloodpressure.

Ms Vendrell of Biocatsays it is crucial to continuefunding the sector, even asSpanish government auster-ity measures threaten to lop

millions off research budg-ets, if the sector’s potentialto benefit the economy is tobe realised.

“Funding research is stra-tegically important for acountry that wants to cre-ate its own knowledge-based economy,” she says.

“But the question is: Howfar should you go frombasic research to where themarket takes over to launcha sector? Our biotech sectorhas a short history and weneed a success story, des-perately.”

And, in spite of theprogress that Catalonia’sbiotech project has made injust two decades, the globaleconomic downturn mayhave made the prospect offinding a local success storymore remote.

“I am not saying there isnot a chance, but this fieldhas been very late in com-ing up in Spain,” says MrVilà.

“If companies that are 20years ahead are havingdifficulties, then it will bedifficult for our companies.”

BiotechnologyLack of local leaderand funding raisequestions, writesMiles Johnson

Mirror image:companies such

as Ficosa areshifting from

simple car partsinto electronics

Scientific rigour: Catalonia’s midsized companies struggle to compete at a global level

FINANCIAL TIMES TUESDAY MARCH 22 2011 ★ 3

Barcelona: Innovative & Creative Business

Graffiti Vandalism or oppressed street art?

Barcelona welcomes all kinds of art lovers.While tourists will queue for hours for the

Picasso Museum or endure the scorchingsummer sun to glance at the marvels ofGaudí’s architecture, those on a limitedbudget can simply stroll through the backstreets and stumble upon the delights ofthe city’s disorderly street art.

As a temporary resident of the city, Ihave to push my way past the touriststaking photos of my own graffiti­staineddoor.

But the artists who leave behind thesespray­painted lyrics are generally dismissedas “taggers” who vandalise property andgive street art a bad name.

“I could do it myself,” is the dismissivejudgment of Begoña Ochoa, a clothing storeboss who is confronted with such graffitievery day.

Yet there is a more serious side toBarcelona´s public art.

The international success of the streetartist, Banksy, has emboldened local artiststo try to be even more aggressive thanthose of contemporary London in both thestyle and the quantity of work displayedacross the city.

Among the Barcelona street artists is ElPez (The Fish), whose real name remains amystery.

He is identifiable by his images ofgrinning fish, which have now evolved intomore varied range of smiling animals. FujiSport hired El Pez to decorate their storeshutters – a typical commission for suchartists.

Another well­known Barcelona­based artistis Andrea Michaelsson, who goes by thename of BToy.

She sprays layer upon delicate layer ofpaint to create fragile and whimsicalportraits, reminiscent of Andy Warhol’swork, of celebrities such as Judy Garland.

It is a far cry from the boldness andaggression of much of the city’s otherstreet art.

Then there is the politics.Artists such as Uri and Zosen use their

illustrations to mock politicians fromCatalonia or further afield, with Uriportraying European foreign ministers asvillains from a Disney movie.

Sometimes the hostility is mutual.The authorities have begun strictly

applying anti­graffiti laws, promptingcriticism that the police are being deployedto stifle Barcelona’s bohemian spirit. Animage that took hours to create willtypically be erased within 48 hours.

It can be illegal for an artist to paint acompany’s shutters, even if commissionedby the company, and both face the risk ofhefty fines.

For this reason “most of the public artistsavoid having a bank account,” says RobertBurt of the art gallery Base Elements.

As the once­riotous colours onBarcelona’s streets are washed and scrapedaway, only a few small galleries are keepingalive the hope of preserving the city’sbohemian­chic vibe, while many of thelarger and better­known galleries shy awayfrom exhibiting public art.

Base Elements, now nine years old, is oneof the handful of galleries that will withoutembarrassment display the loud colours anddynamic shapes of public art across theirbleached white walls.

Stubborn street artists – who oncerefused to stoop to exhibiting their work ingalleries – now find they have little choice,given the hostile reception in the streets.

Mr Burt says the gallery has foundsuccess in part because public art,previously free, is now so commercial thatBarcelona families will buy its subversiveimages to be displayed awkwardly in theirliving rooms.

But if public art is no longer public, and ifstreet art is no longer in the street, can itbe worthy of the name?

Pascale Davies

The writer is a student currently based inBarcelona

El Pez’s distinctive signature

Lender weathers storm

La Caixa – or Caixad’Estalvis i Pensions deBarcelona (Barcelona sav-ings and pensions bank), togive it its full name – haslong been the dominantfinancial power in the cityof Barcelona and the auton-omous region of Catalonia,and a significant force inSpanish retail banking.

Formed in 1990 from amerger of two savingsbanks, one dating back to1904 and the other to 1844,La Caixa has weathered thelatest economic crisis inbetter shape than most ofits Spanish peers andremains the embodiment ofCatalan financial strength.

Yet even Isidre Fainé, thefamously canny La Caixachairman who began hisworking life in a bicyclerepair shop, was unable toresist the increasingly stri-dent demands of interna-tional financial marketsand of the Spanish govern-ment that unlisted savingsbanks become more trans-parent, improve their corpo-rate governance and rein-force their capital.

Sensing the changinginvestment climate in theface of a moribund Spanishproperty market, Mr Fainéand Juan María Nin, hischief executive, moved withcharacteristic decisiveness.

While absorbing themuch smaller Caixa Girona

– one of a series of mergersthat has already reducedthe number of Spanish cajagroups from 45 to 17 – LaCaixa’s executives in theblack towers of group head-quarters on Barcelona’sAvinguda Diagonal beganlast year to make plans fora listing of their bankingoperations.

As a result, they were thefirst big savings bank toproduce a detailed roadmap. In January this year,they unveiled their projectfor the listing of the bank,to be called Caixabank andwith a book value calcu-lated at €20.6bn ($28.7bn) –double the value mooted forrival Bankia, the bank com-posed of Caja Madrid andsix smaller savings banks.

Both the new structureand the process of buildingit are complex, some mightsay cunning. La Caixaalready has a listed entity –the industrial holding com-pany Criteria – and theSpanish and foreign bank-ing operations will be gath-ered under that umbrella asCaixabank.

To strengthen Caixabank,furthermore, the bank willbe endowed with stakes inRepsol, the energy group,and in Telefónica, and willtherefore benefit from thelatent capital gains of morethan €2bn in these twoholdings.

Meanwhile a “bad bank”of repossessed properties

will be placed not withCaixabank but with the oldindustrial holding group.Lastly, the bank will fur-ther reinforce its capital byselling €1.5bn in compulso-rily convertible bonds to cli-ents.

The result will be a bankwith a core tier one capitalratio of 10.9 per cent undercurrent Basel II rules, oneof the most robust ratiosamong Spanish lenders.

Bankers in Madrid saythat Caixabank will be oneof the more attractive finan-cial investments in what isset to become a crowdedfield, as Spanish cajas jostlefor fresh capital.

La Caixa is by no meansthe only financial institu-tion in Barcelona. Carlyle,the private equity group, isalso has its Iberian base inthe city, where it controlsApplus, an acquisitive tech-nology company in theautomotive, aerospace andpharmaceuticals sectors.

Yet La Caixa – whose col-ourful logo comes from adesign by Catalan artistJoan Miró – remains the BigDaddy of finance in Barce-lona and Catalonia, and thepaymaster for many invest-ments and innovations inSpanish finance.

Hewlett-Packard – alsobased in the Barcelonaregion – boasts of the threebig projects it has carriedout for La Caixa in recentyears: a “business controlcentre” to manage opera-tions in real time; a cus-tomer loyalty project formerchants receiving pay-ments by card; and a busi-ness intelligence system tointegrate La Caixa’s owndata with information fromother sources.

La CaixaBank remains adominant financialpower in the city,says Victor Mallet

The goal issuccesswithoutthe debt

If Barcelona is a citythat thinks of itself asdoing things differ-ently, its football club

is no exception.For years, the current

Spanish championsremained unique amongEurope’s top teams by obsti-nately refusing to carry acommercial sponsor ontheir shirts.

But while FC Barcelona’sbrand of free flowing foot-ball – known as tiki taka –has helped it enjoy sus-tained success on the pitch,with its team toppingSpain’s La Liga, the club’sfinancial performance hasbeen less glittering.

After reporting an annualloss last year of €79.6m andnet debt of about €400m, inDecember Barça tore up itshistorical policy and signeda five and a half year,€165m contract with theQatari government – themost lucrative shirt spon-sorship deal in football his-tory. Previously, it hadfilled the space with theUnicef logo free of charge.

Like other clubs duringthe credit boom Barcelonaburnt through its cash bypaying huge transfer fees.This resulted in the clublast year seeking a €150mloan to help pay player andstaff wages and ushered ina new period of austerity.

Heavily indebted teamsacross Europe must also gettheir houses in order aheadof Uefa, Europe’s footballgoverning body, introduc-ing new rules on how muchclubs can spend in relationto their income.

The Qatar deal is likely tosee the 121-year old club’srevenues stay above €400mthis year, and give it thechance to dethrone arch-rivals Real Madrid as thehighest grossing team inthe world.

Instrumental in the movewas the arrival of new clubpresident Sandro Rosell in

June 2010. He has pledgedto slash the club’s debt andto build on its success toincrease revenues throughinternational marketing.

After widespread criti-cism of the financial man-agement of his predecessor,Mr Rosell has outlined aplan to improve revenues,and pay down about €30min debt by the end of theseason without selling play-ers.

As part of the financialrestructuring Mr Rosell, aformer Nike executive andholder of an MBA from theEsade business school, hasrebuilt the club’s boardaround figures with bothmanagerial and interna-tional marketing skills.

Seven of the 15 seats areoccupied by holders ofMBAs and business degrees,while the appointment ofDídac Lee, a Catalan inter-net entrepreneur of Chineseorigin, was interpretedpartly as a reflection of theclub’s desire to bolster itsexpertise in the key Asianmarket.

The club’s earning capac-ity, which has seen it con-sistently ranked secondbehind Real Madrid inDeloitte’s annual footballmoney league, will behelped by the increasinglytight grip Spain’s two rich-est teams hold over domes-

tic and international broad-casting revenues.

Last year, Barcelona gen-erated €178.1m from broad-casting, or 44 per cent ofthe clubs’ total revenuesand an annual rise of 12 percent. The club also signed arenegotiated four year indi-vidual broadcast contractwith Mediapro, which holdsthe television rights forSpanish first and seconddivision football, underimproved financial terms.

“Throughout the world,people are interested inwatching Barcelona games,so there is a low level of

price elasticity as, if youincrease the price, TV sta-tions will still pay. There isno alternative for broad-casters if they want to showBarça matches,” says KimioKase, professor of strategicmanagement at the busi-ness school Iese.

Barcelona’s world famousplayers, such as the Argen-tine attacker Leo Messi,have also helped it toincrease international shirtsales, with other clubs look-ing upon its team of mostlyhomegrown stars withenvy.

All three finalists for the2010 Fifa Ballon d’Or – XaviHernández, Andrés Iniestaand Messi – were not justall Barcelona players, butthey had also been culti-vated in the clubs’ famedyouth academy.

Mr Kase says thatthe Barcelona managementfaces different types of pres-sure from other sports busi-nesses because of its owner-ship structure. Barça is oneof only four Spanish clubscontrolled by its members,or socios, alongside RealMadrid, Athletic Bilbao andOsasuna.

“When you are privatelyowned, or listed on thestock market, this moti-vates you to make moneyfor your investors,” he says.“While Real Madrid andBarcelona generate largeamounts of money, this isnot their main aim.”

Under the socio structureBarcelona’s members elect

the president, meaning thatMr Rosell’s attempts torestructure the club’sfinances must be balancedwith the feelings of theclub’s fans, estimated tonumber about 44m accord-ing to market research –greater than Real Madridand more than six times thepopulation of Catalonia.

For now, one of the mostimportant things working

in his favour is that theteam is winning.

“The sporting side ofmanaging a club is quiteindependent from the finan-cial side,” says Mr Kase.

“Supporters don’t careabout the financial state oftheir teams if they are win-ning. But if you lose games,they will kick you out, evenif you are financiallyresponsible.”

SportMiles Johnsonlooks at thefinancial challengesof running the city’sfootball team

Nimble footwork: Leo Messi evades a tackle from Arsenal’s Abou Diaby Reuters

Isidre Fainébegan hisworking lifein a localbicyclerepair shop

Supporters don’tcare about thefinancial state oftheir teamsif they are winning

4 ★ FINANCIAL TIMES TUESDAY MARCH 22 2011

Barcelona: Innovative & Creative Business

City vibrant despite economic stagnation

It was a quintessential Bar-celona breakfast: a group ofenthusiastic entrepreneurs– some Catalan, some for-eign, some young, some not-so-young – gathered arounda table of pastries, fruitjuice and coffee to discussthe future of their busi-nesses and the pros andcons of being based in oneof Europe’s most energeticand cultured cities.

Edward Hugh – a Cata-lan-speaking Briton whohas become a leading Euro-pean economic commenta-tor on Facebook – organisedthe meeting for the FT atthe Gild club, a venue forbusiness people in Barce-lona that is itself an entre-preneurial start-up foundedby Karen Reith, JonathanGoodman and JacquelineDoherty.

The discussion was proofthat Barcelona remains an

attractive destination forinvestors and that somesectors of the economy –particularly in informationtechnology and other serv-ices – are still rich in oppor-tunities, in spite of theeurozone sovereign debtcrisis and the stagnation ofthe overall Spanish econ-omy.

What remained unre-solved was the level offinancial support that gov-ernments – national,regional and municipal –should or could provide tofledgling businesses in anera of fiscal austerity.

Ferran Laguarta, chiefexecutive of Sensofar andcorporate developmentdirector of the CataloniaPolytechnic University’scentre for sensors, instru-ments and systems develop-ment, finds it importantthat Catalonia encouragesclusters of companies suchas those focused on illumi-nation and on optical engi-neering.

“This is the same situa-tion as in Singapore or theNetherlands,” he says.“These countries haveoptronics and photonics

clusters. This is an emerg-ing technology, a globalbusiness.”

Sensofar, which has asubsidiary in Tokyo, makes3D optical profilers, micro-scope-like devices that uselight to measure objects ona nanoscale – essential, forexample, in the semicon-ductor and medical equip-ment industries.

Pau Garcia-Milà, director-general of EyeOS, is manu-facturing software, not hard-ware, and says the growingcompany of 30 employees,with a presence in 65 coun-tries, constitutes the biggestopen-source project devel-oped from Spain.

The model is to sell serv-ices that allow users toaccess what they need fromthe “cloud” through theirweb browser – essentially aportable desktop and appli-cations that you can accessfrom anywhere.

The company has closed adeal with IBM as well aswith Spanish groups suchas Telefónica and benefitsfrom official soft loans aswell as the reinvestment ofits own profits.

Mr Garcia-Milà says the

Barcelona base is adisadvantage in so far asventure capital groupsapply a valuation to theSpanish company that is“extremely discouragingcompared with the valua-tion of the company in theUS”, but also an advantagebecause EyeOS is excep-tional in Spain.

He adds that he wouldnever move the company’s

headquarters, although ofcourse offices will have tobe opened elsewhere.

In short, being in a high-tech sector in Spain makesyou a big fish in a relativelysmall pond, whereas Cali-fornia is an ocean of high-tech enterprise and financ-ing.

Mr Hugh, the economist,says the same is true of hisprofession. “If I’d started in

New York and begun talk-ing about the economy, noone would have noticed,”he says.

Jonathan Hayes, co-founder and president ofDinube Mobile Payments,says his company did startin the US – as a spin-offfrom work done at the Mas-sachusetts Institute of Tech-nology Media Lab, wherethe concept was developed.

The beta version ofDinube’s website says itpulls together loyalty andpayment accounts to allowa transaction to be donesimply from any mobilephone. Dinube says that itis building a payments“ecosystem” and that infuture such operations mayalso be achieved using“near-field communication”with special microchips insmartphones.

Barcelona is also hometo service businesses thatare more traditional andperhaps less risky, althougheven these typically makethe most of new technologythat allows them to cutcosts or attract new custom-ers.

One of these is Nostrum,

the “home meal replace-ment” business of whichQuirze Salomó is executivechairman. Founded in 1998and built on the family’slong involvement with thefood industry in Cataloniaand across Europe, Nos-trum now operates 44Mediterranean ready-mealstores around Barcelonaand is planning to expandto Madrid, Valencia andFrance.

“One of the goals we haveis a very tight supply chain.We are running a very goodIT system,” says MrSalomó. “And with aniPhone or Android systemyou’ll be able to ask foryour lunch from the shopand pay – and won’t wait inthe queue. I know that inNew York some people aredoing the same.”

At this point Mr Garcia-Milà intervenes to reportthat he catered his com-pany’s end-of-year dinnerusing Nostrum food. KateTeesdale of Essor, a lan-guage training company,begs Nostrum’s boss tooffer good sandwiches aswell as prepared meals tofill a gaping hole in the fast-

food offerings on Spanishhigh streets.

Ms Teesdale says the pro-fessional language trainingmarket is changing fast withthe arrival of online train-ing, and she sees the modeldiverging: at the lower endof the market there will bemore “virtual classes”,including by mobile tele-phone; and at the top end,the continuation of tradi-tional one-on-one trainingfor senior executives.

The crisis and the result-ing budget cuts have putpressure on the prices thatcompanies such as Essorcan charge their customers.

Everyone at the breakfastnevertheless seems to agree

that Barcelona’s combina-tion of skills and hard work,a convenient geographiclocation and openness toinvestment and innovationmakes it an attractive base –even if it can never hope tomatch the sheer volume ofenterprises and venture-capital funds that enrichCalifornia’s Silicon Valley,and even if some areasdepend too heavily onpublic-sector support.

The crucial factors forBarcelona and Catalonia,says Salvador Garcia, abanker and former filmentrepreneur, are its “entre-preneurial spirit” and “akind of innovation atmos-phere”.

Entrepreneurs talkVictor Mallet meetssome of the region’smovers and shakers

Investment per head in the six largest Spanish cities€

600

500

400

300

200

100

0

Sources: Barcelona municipality, Spanish finance ministry, Institute of Fiscal Studies andmunicipal budgets (except Seville)

1988 90 95 05 10 112000

BarcelonaMadridMàlaga

SevillaValènciaZaragoza

Being in a high­techsector in Spainmakes you a bigfish in a relativelysmall pond

Conferences provide€2.5bn boost to city

In February, almost 60,000 people fil-tered past the 50 metre high Venetiantowers leading into Barcelona’s PlaçaEspanya to attend the Mobile WorldCongress. The three-day conference isregarded by the telecoms industry asan annual pilgrimage and the keynotespeeches from Google’s Eric Schmidtand Microsoft’s Steve Ballmer werebroadcast live to technology fanaticsaround the globe.

Away from the exhibition centre, itis also an event worth millions ofeuros to the economy of the city thathosts it. Local hotels are block-booked, plazas are filled with dele-gates, and it becomes a complicatedaffair to locate a restaurant table incentral Barcelona.

The Mobile Congress, and 80 othertrade fairs representing industriesfrom textiles to food, are all held atthe city’s main exhibition centre, FiraBarcelona, housed off the PlaçaEspanya. According to a study con-ducted by Iese, the Barcelona-basedbusiness school, the events held atFira generate €2.5bn a year for thecity, of which almost 40 per centcomes from the amount spent by visi-tors and exhibitors during their stay.

“We use the brand of Barcelona,which is very strong,” says AgustínCordón Barrenechea, Fira’s chief exec-utive. “Much of the money we gener-ate is made by our direct activities,but also what our events generate forbusinesses in the city.”

Fira traces its origins back to theuniversal exhibition held in the cityin 1888 – said to have featured a two-metre sculpture of a castle carved outof Manchego cheese, and seen bysome academics as an important influ-ence on the Catalan architecturalmodernism made famous by Gaudí.

Fira was officially designated by thegovernment as a trade show centre in1932, and went on to hold the firstdemonstration of television in Spainin July 1936 before being shut downthroughout the Spanish Civil War.

Mr Cordón Barrenechea is particu-larly proud of Fira’s ability to operatelike a private-sector company despitebeing city-owned: “Our business

model is not usually found [for confer-ence centres] in other countries,” hesays. “We have public shareholders,the city hall and the government, butwe are managed by representatives ofbusiness. There are no politicians inour business model.”

However, Fira will have to competeagainst rivals from Milan, Munich andParis to secure the Mobile World Con-gress from 2013 to 2017, having previ-ously snatched it from Cannes.

As well as liaising with Barcelona’shotels and leisure industries to planfor the thousands who attend, Fira isalso required to work closely withother parts of the city’s infrastructureto run its events effectively.

For the ITMA textile and garmentmachinery exhibition, to be held thisSeptember and expected to attract100,000 people, Fira has had to workclosely with the Barcelona portauthorities to arrange for machineryto be shipped in from Asia that can-not be transported by air.

Mr Cordón Barrenechea argues thatthe varying industries and geographi-cal regions represented in Fira’s fairs

are an indicator of the changing stateof the global economy: “We saw themix of the countries change, depend-ing on the economic performance ofeach country,” he says.

“For example, we had a record thisyear at the Mobile World Congress forpeople coming from Asia, while wehave fewer visitors coming from theUS. Internationally focused eventshave remained strong, but more localevents have suffered, as the Spanishmarket has obviously been hurt bythe crisis.”

The result has been that Fira’s busi-ness, while rooted in Barcelona, hasbecome more international, with exhi-bitions, such as its Alimentaria foodshow, travelling to Latin America inrecent years: “When the demand forour exhibitors is not ready in Europe,we are taking our exhibitors to eventsin local markets,” he says. “This issomething we have seen during thesetimes. Fairs are very efficient ways ofhelping companies internationalise.”

Trade fairsPrivate management helpscity­owned Fira cope withtough economic times,says Miles Johnson

According to astudy conductedby Iese, theBarcelona­basedbusiness school,the events held atFira generate€2.5bn a year

Spanish tastefor premiumgin gives duoa profit tonic

Ask for a gin and tonic inSpain, and the barman invar-iably asks you what sort ofgin – and gives you a wide

choice.On a March evening in Barcelona’s

Bar San Telmo, Charles Rolls andMarc Calabuig are comparing a Hen-drick’s gin flavoured with cucumberand a Whitley Neill (“with nine botan-icals, inspired by Africa, made in Eng-land”) from which protrudes a twig ofliquorice. It may seem counter-intui-tive in the midst of an economic cri-sis, but the premium gin market hasbeen growing rapidly in Spain.

Mr Rolls and Mr Calabuig are ridingthe wave, supplying the country’s pre-mium gin drinkers with premium mix-ers to match from Fever-Tree, the UKcompany founded six years ago by MrRolls and his partner Tim Warrillow.

Fever-Tree – with the UK and theUS as its other big markets so far –had a serendipitous entry to Spainwhen the artist Richard Hamiltonbrought some of its Indian tonic waterfrom Waitrose, the UK supermarket,and introduced it to Ferran Adrià, therenowned chef at the El Bulli restau-rant near Roses, two hours north ofBarcelona.

Mr Adrià does not merely serve thetonic with his gins. He even made asoup out of it, and suggested MrCalabuig of International CookingConcepts as a distributor.

“The connection is with the chefs.We started with the restaurants andthen we moved into the bars and theninto supermarkets,” says Mr Calabuig.“Catalonia and therefore Barcelona

have always been the entry gate forforeign products in Spain.”

Fever-Tree’s marketing pitch is thatthere is no point drinking an expen-sive, delicately flavoured gin if youare going to smother it with an indif-ferent tonic.

The idea seems to have caught on,and the company has branched outinto other mixers, including LemonTonic (Bitter Lemon is the subtitle,but that term was seen as old-fash-ioned by young consumers), GingerAle, Lemonade and Ginger Beer.

It sources and blends high-quality,natural ingredients – including qui-nine produced by a German family onthe Congo-Rwanda border and freshgreen ginger from the Ivory Coast –for its bottling plant at Shepton Mal-let in Somerset, England.

For its Indian tonic, the launchproduct, the company says the qui-nine was “blended with spring waterand eight botanical flavours, includ-ing rare ingredients such as marigoldextracts and a bitter orange from Tan-zania”. That is the kind of recipedesigned to appeal to premium drink-ers, and it costs twice as much asordinary tonic.

Mr Rolls, who made his name run-

ning Plymouth Gin, says Fever-Tree’ssales rose from £4.3m in 2009 to £6.7mlast year, and continue to accelerate.“We’re growing faster than we grewlast year. We’re 87 per cent up on lastyear in the first two months in termsof sales,” he says. “We haven’t eventouched places such as South Americayet.

“People are drinking less, but they

are drinking better quality and we aredoing nothing more than followingthe trend,” he says.

With Spain accounting for nearly athird of sales – the same as the US,and slightly less than the UK – andwith the premium gin market contin-uing to expand, Mr Rolls has rentedan apartment in Barcelona and isplanning further growth on the Ibe-rian Peninsula, from Lisbon to hotelsin the Balearic Islands.

Mr Rolls compares the “traditionalhard work” of marketing the productin the competitive British and NorthAmerican markets with the good for-tune of Fever-Tree’s arrival in Spainat the end of 2006.

“Over here, we had the stars aligned.We landed with just the right productat just the right time,” he says. “And itwas Ferran Adrià who helped us findMarc.” Officially, the premium ginmarket in Spain has been growing at18 per cent a year, but the real growthin consumption of brands such as Hen-drick’s is “a lot faster”.

Spain even has a historical connec-tion with quinine, the crucial ingredi-ent for tonic originally known as “Jes-uit’s powder” or “Jesuit’s bark” when

it was exported from South Americaby Spanish colonists.

The cinchona or quinine tree – thefever-tree of the mixer brand – wasnamed after the countess Ana delChinchón, wife of the viceroy to Peruwho was reputedly cured of malariaby the product in the 17th century.There is no connection with the Afri-can fever tree, so called because itgrows near water and is thereforefound in malarial areas.

Mr Rolls continues to explore theSpanish market from Barcelona andto study Spanish drinking habits.

“It’s time for us to seize themoment. I spend time in Madrid, Ali-cante, Malaga, San Sebastián and Istart to get a feeling for what’s reallyhappening,” he says, acknowledgingthe risk that the premium gin crazewill fade as quickly as it arrived. “Wehave not finished. We’ve had a fantas-tic start but there’s still a lot to do.”

Among the surprises for newcomersto Spain is the discovery that Span-iards usually drink gin and tonic afterdinner as a digestif, not before a meallike the English. “It’s very refresh-ing,” says Mr Rolls. “It’s sort of likehaving a sorbet.”

AlcoholHigh­quality mixers godown well with consumersof tasty tipples, as marketgrows, says Victor Mallet

Charles Rolls: ‘People are drinking less but . . . better quality’ Victor Mallet

That is the kind of recipedesigned to appeal topremium drinkers and itcosts twice as much asordinary tonic

FINANCIAL TIMES TUESDAY MARCH 22 2011 ★ 5

Barcelona: Innovative & Creative Business

Local textile traditionhas gone global

Manel Adell and ThomasMeyer got to know eachother sailing across theAtlantic Ocean in a mutualfriend’s boat 19 years ago,as they took turns at thewheel.

It was 1992, the year thatBarcelona thrust itself intothe centre of the world’sattention by hosting theOlympic Games. It was alsoa crucial year for Mr Meyer,a Swiss fashion designerliving in Barcelona, as hisfortunes started to improve.Four years earlier, Desi-gual, his small fashion com-pany, had been on the brinkof bankruptcy.

But the chance meetingbetween the pair on thatocean voyage was the sparkthat later helped transformMr Meyer’s fledgling fash-ion house into one ofSpain’s largest independentretailers, boasting shopsfrom Thailand to New York.

“I want our brand to belike Madonna,” says MrAdell, who left a job atBang & Olufsen 10 yearsafter the Atlantic trip tobecome a consultant atDesigual, eventually becom-ing its chief executive.

“We want to be a bigname that can reinvent andrefresh itself without everlosing its soul,” he adds.

Sitting in a glass room inthe company’s open-planBarcelona headquarters,where the walls areadorned with haikus suchas “what a larvae calls theend of the world, a mastercalls a butterfly”, Mr Adellsays that he believes hiscompany can become as bigas Nike.

Desigual’s growth sinceMr Adell and Mr Meyerjoined forces in 2002 hasindeed been rapid. The com-pany’s turnover, whichclocked in at €8m in 2002,hit €435m in 2010.

Mr Adell expects this torise to €600m this year –representing a faster rate ofgrowth than was achievedat the same point in its his-tory by Spain’s Inditex,owner of the Zara brandand the world’s biggestclothing retailer by sales.

The next step, he says,with barely a pause forbreath, is to open stores inBrazil, and other developingmarkets, and to aim to haveevery wardrobe in theworld containing at least

one item made by Desigual– which means “unequal”,or “not the same” in Span-ish.

The success of Desigual,which is fully owned by thetwo partners and nowemploys 3,000 across 30countries, is the latest in aline of Barcelona-basedfashion retailers that haveconquered vast swathes ofthe globe after openingtheir first store in the Cata-lan capital.

These heirs to Catalonia’sonce vast industrial textilesindustry, which for centu-ries provided material forwestern Europe before los-ing the business to thelower cost factories abroad,

have used Barcelona’svibrant streets and richhistory of design to con-tinue to attract young tal-ent to the city, and to setglobal trends.

Mango, which opened itsfirst shop on Barcelona’supmarket shopping streetPasseig de Gràcia in 1984,now has more than 1,300shops in 100 countries, withturnover in 2009 hitting€1.5bn. And, althoughfounded in Gali-cia, Inditexn a t u r a l l ypicked Barce-lona as thelocation forone of itsf l a g s h i pstores.

For PilarR i l a ñ o ,director ofthe Barcelo-n a - b a s e df a s h i o nnews web-s i t eModaes, Bar-celona’s con-centration oflarge andsmall fashionc o m p a n i e smakes it aninternationalhub for thei n d u s t r y ,a l l o w i n gconnectedbusinessessuch as herown quickly toattract a follow-ing.

“Barcelona is acity with a lot ofcreativity andindustry, and thereare lots of impor-

tant companies here,” shesays. “We have Mango,Desigual and others allhere.”

Ms Rilaño, who beganbuilding Modaes after acareer as a business jour-nalist at Expansión, theSpanish newspaper, saysthat the smaller, more flexi-ble operational structure ofa website enables her to bemore creative with businessideas than Spain’s tradi-tional media, the bulk ofwhich is based in Madrid.

Modaes was launched in2009 with a total investmentof €40,000 by its five part-ners, including Ms Rilaño,and has received furtherinvestment from privateinvestors as the site’s read-ership has grown. She isnow starting to use the siteto allow companies toadvertise jobs for designers,and to organise industryevents and research.

“If you have a newspaperwith 100 people workingthere, you don’t have thetime to try new things,” shesays. “If you are a youngbusiness, you can do that.”

Desigual’s Mr Adell saysthat because Barcelona isfar away from the financialcentres of Madrid, and Lon-don, entrepreneurs can findit easier to concentrate onsimple business models,and organic growth.

The fashion group, whichinevitably finds itselfcourted by investmentbankers keen to list it onthe stock market, and pri-vate equity groups eager tobuy into its growth, has nonet debt. For Mr Adell,Desigual’s Barcelona mind-set has been integral to theculture of the company.

“The balance betweenthe emotions and thepractical has always

been good in Catalo-nia. The City [of Lon-don] is far away, sowe have less of thefinancial mindsetthat can detach

the numbersfrom the busi-ness,” hesays.

“The cul-ture of ourcompany has

always been basedon being original,on differentiation.

“I wouldn’t saywe are anti-es-t ab l i shment ,but we are defi-

nitely againstbeing main-stream.”

Fashion retailingDesigual is thelatest brand toemerge from thecity’s streets, writesMiles Johnson

Distance fromfinancial centresmakes it easier toconcentrate onsimple businessmodels

A literary hub built on rich history and skills

In 1860, a former labourer fromthe Catalan provinces founded apublishing company in Barce-lona. José Espasa, who had

worked demolishing the old citywalls, would go on to print Spain’sfirst encyclopedia. “From building topublishing: that has been the city’snatural impulse,” says the formermayor of Barcelona, Joan Clos.

Today, Barcelona is widely acknowl-edged as Spain’s publishing hub. Morethan a hundred Spanish- and Catalan-language publishers huddle togetherin a city of 1.6m inhabitants, workingclosely with a rich pool of authors,translators, agents, designers, illustra-tors and booksellers.

Spain’s publishing industry – thethird largest in Europe after theUnited Kingdom and Germany – pro-duces some 80,000 books a year. Barce-lona accounts for 53 per cent of theoutput, while Madrid is responsiblefor 37 per cent. “Barcelona’s culturalidentity is inexplicable without itsrich publishing sector,” says FerranMascarell, Catalonia’s Minister forCulture.

While Madrid remains the main pro-ducer of text and reference books,Barcelona is the leading centre forfiction, design-oriented publicationsand comic books. Spain’s two largestpublishing conglomerates – Planetaand Random House Mondadori – havetheir headquarters in Barcelona. Theyshare the market with well estab-lished independents created in the1960s and 70s, such as Spanish-language publisher Tusquets or bilin-gual Acantilado/Quaderns Crema.

A new generation is adding to themix: Duomo, Blackie Books andLibros del Asteroide are just a few of

the publishers that Barcelona-basedfiction editor Anne Vial describes as“smart, inventive, resourceful, andlooking for new ways in publishing”.

These newcomers are part of a tra-dition that can be traced as far backas the 17th century. Local publisherslike quoting from Miguel de Cervan-tes’ Don Quixote, in which the epony-mous hero visits a publisher in Barce-lona who is printing an apocryphalversion of Don Quixote; they discussthe merits of publishing works intranslation.

The city’s editorial tradition hasmuch to do with what Jorge Herralde,founder of publisher Anagrama, calls“porosity”. Closer to the French bor-der than to Madrid, Barcelona hasalways felt “more free, more Euro-pean” than the rest of the country.

There also exists a tradition of peo-ple passing through Barcelona ontheir way to and from the Americas.In the 1960s, this link led to the emer-gence of the Latin American “boom”generation that included Colombia’sGabriel García Márquez and Peru’sMario Vargas Llosa, who spent manyyears in Barcelona.

It was, says Colombian novelist andBarcelona resident Juan GabrielVásquez, “a place where Latin Ameri-can literature was well received andwell read, and which at the time wasmuch more open, more cosmopolitanthan Madrid.”

Two names commonly associatedwith the international emergence ofLatin America’s best-known authorsare Carmen Balcells, the formidableliterary agent known as “la Mama

Grande” to her clients, and publisherCarlos Barral, who in 1962 awardedthe Biblioteca Breve literary prize to athen unknown Vargas Llosa.

The award, says Vásquez, Barral,“started a movement that took LatinAmerican literature out of LatinAmerica and put it at the centre of20th century western culture”. Otherpublishers, notably Anagrama andTusquets, “allowed a breath of freshair into Franco’s stuffy Spain”.

According to Enrique Vila-Matas, alocal writer, the city, as a haunt forexiled writers, has become “a succes-sor to Paris”.

“Barcelona is an ideal city for writ-ing,” he says. “No one will distractyou here if what you want to do iswrite. And it lacks the oppressionof capital cities, where the presence

of power eats away at people’s souls.”The unique cohabitation of Catalan-

and Spanish-language publishing, anoccasional source of friction, is nowcommonly regarded as a boon to allsides: “The more recalcitrant anti-Spanish language sentiments arereceding,” says Valerie Miles, co-founder of the Spanish edition ofGranta magazine and publishingdirector of Duomo Ediciones. “It’sobvious that if the Spanish languagepublishers leave Barcelona, the citywould lose a vibrant element in itscultural tapestry.”

The Spanish publishing industryhas continued to report modestgrowth even amid the recent interna-tional downturn. But, as in all edito-rial centres around the world, Barce-lona’s publishing community now

looks to the future with trepidation.Paula Canal, Anagrama’s fiction

editor, says the balance of Spain’s“delicate book ecosystem” has so fardepended on diversity among book-sellers and independent publishers,and on fixed prices.

The system is now under pressure.The entrance of Amazon, the onlineretailer, into the Spanish market laterthis year is likely to transform thelandscape and put small publishersand booksellers out of business. Thesale of e-books remains minimal, butconcerns are growing about the effectof piracy, as digital platforms becomemore common.

Josep Lluis Monreal, founder andpresident of Planeta, Spain’s largestpublishing group, seems undaunted.The rise of new technologies, he says,“confirms to me the good health ofbooks and the excellent health of thepublishing sector.” Publishers, hebelieves, are simply creators of con-tent: “Should we worry, then, aboutbeing offered the chance to presentthose contents through new platformsand transmit them through new chan-nels? We ought to worry, instead,about being short-sighted and missingour train to the future.”

In a recent essay Enrique Vila-Matas wrote: “Guessing the future ofbooks in the face of an alleged digitalthreat is like speculating about howwell your favourite team will do onSunday.” But in his latest novel, Dub-linesca, he is less flippant. Its protago-nist is an independent Barcelona-based literary publisher on the brinkof selling his business to a foreignconglomerate. “Sometimes,” Vila-Matas writes, “he likes to think ofhimself as the last publisher.”

Barcelona’s book people are surelyhoping that this is not a taste ofthings to come.

PublishingÁngel Gurria­Quintanaexamines the city’s roleas a publishing centre

Delicate book ecosystem: peoplebrowse on the Ramblas on SaintGeorge’s day when women traditionallygive men a book as a gift Getty

Desigual’sculture isbased on

originality

6 ★ FINANCIAL TIMES TUESDAY MARCH 22 2011

Barcelona: Innovative & Creative Business

A well constructedcity by design

More than any other city,Barcelona is a paradigm ofdesigned urbanity – anadmired exemplar of how acity can reinvent itself as adesirable destination.

The question of how ithas been done has beenstudied ad infinitum. Itsgenesis is usually attributedto the fall of the Francoregime and the subsequentrevival of Catalan culturalidentity combined with thecity’s hosting of the 1992Olympic Games.

Since then, the awardingof the Games has been seenas an opportunity for regen-eration and redesign, withdecidedly mixed results:Athens and Beijing com-pletely failed to capitaliseon their Olympics infra-structure and emergencefrom a repressive regimehas hardly made Moscow orSofia design capitals.

Neither of these factors isenough, therefore, toexplain the transformation.It is necessary to go furtherback to understand why thecity has proved such fertileground for reinvention.

The city is best known forone architect – AntoniGaudí – the devout Catalanwhose surreal, undulatingworks include La Pedrera,the Casa Battlo, the ParcGüell and the truly extraor-dinary Cathedral of theSagrada Familia – which isstill under construction.

Gaudí’s works create sur-real explosions of organicform and colour within anordered whole – whichmakes them all the moresurprising. But it is thearchitect of that orderedwhole, Ildefons Cerdà, thetown planner who con-ceived the extension of thecity beyond its Medievalcentre as a grand grid.

It was the scale of thisgrid that allowed to city todevelop at a density that isthe envy of cities aroundthe world.

It has proved able toaccommodate a mix of useswithin a tightly-definedurban area. It is this combi-nation of density and inten-sity which has kept the cityalive. Critically, the citycan accommodate a socialmix at its centre. While thecentres of London, Paris,New York and now evenBerlin have succumbed togentrification which has

forced the less wealthy andmigrant communities out tothe edges, central Barcelonacontinues to house a richsocial mix.

Even the gothic quarterat its heart remains a tradi-tional Mediterranean barrio– noisy, teeming andvibrant. Unlike many medi-eval city centres, it has notbeen allowed to become aheritage tourist ghetto.

If Barcelona has remainedone of the world’s most liva-ble and best designed cities,it is not by accident.

Mayors, architects andurbanists have shown whatcan be done. The socialistmunicipality (notably undermayor Pasqual Maragall)led the way in revitalising atired city through its neigh-bourhoods as well asthrough grand plans. Inconcentrating on infrastruc-ture – social and cultural aswell as utilitarian – thecity’s fabric was revived.

A combination of newsocial housing, health andcommunity centres, marketbuildings and, perhaps mostimportantly, public spacehas transformed the city.

Of course there is theRamblas, arguably the mostsuccessful mixed-use boule-vard in any city anywhere,but there are dozens ofother innovative examples.

The Moll de la Fusta pro-vides the broad, open, art-strewn waterfront to coun-terbalance the dense city-centre, as does the sophisti-cated restructuring andlandscape of the Montjuichilltop, whilst the Jardí delMuseu Can Framis hasromantically envel-oped a piece of theold industrialcity.

Elsewhere,“starchitects”have beenattracted toadd to thecity’s sky-line.

F i r s tcame FrankGehry’s hugeharboursidefish sculp-ture, a fore-runner of theBilbao Guggen-heim.

French archi-tect Jean Nou-vel’s Torre Agbaralso became aninstant icon – a

contemporary of London’sGherkin, its iridescentsheath makes it the moreelegant of the two. Yetmore organic is the big, redrubber welly of a tower byToyo Ito in the PlazaEuropa.

Architects of the BeijingBird’s Nest stadium andLondon’s Tate Modern, Her-zog & De Meuron, built thevast, dark Barcelona Forumby the waterfront and Brit-ain’s David Chipperfieldbuilt the huge City of Jus-tice in L’Hospitalet de Llo-bregat – both structures areambitious but intimidating.

Most recently there isBritish architect’s RogersStirk Harbour and Partners’revivification of the city’sbull ring, Las Arenas, amixed use scheme thatpromises to revitalise a bigchunk of the city when itopens later this year.

These blockbuster struc-tures may suck up theattention, but it is the sub-tler public buildings thathave made Barcelona suchan exemplar of urbanism.

In recent years JosepLlinás’s Jaume FusterLibrary with its complexand generous canopy andthe fragmented literal cur-tain wall enveloping theSant Antoni district libraryby Aranda Pigem reinter-pret public space and archi-tecture in wonderful ways.

Then Enric Mirallesand Benedetta Tagliabue’sSanta Catarina Market withits wavy roof, a starburst ofGaudí-esque colour, resur-rected the spirit of the city’sgreatest architect while rev-elling in its culture of food.

A stroll through any ofthe city’s big design stores,BD Barcelona or Vincon,set in wonderful modern-ismo palaces reveals thedepth of the city’s designculture – as do the fashionlabels it exports from De

Sigual to Camper.Architecture, design

and public spaceare still seen bothas a form ofpolitical andd e m o c r a t i cexpression andare used todifferentiatethe fiercelyindependent

Catalan city.That political

drive seems tohave survivedthe reflection ofthe immediatepost-Franco era

to create one ofthe world’s few

real design cities.

ArchitectureGaudí is not theonly reason forthe city’s renown,writes EdwinHeathcote

Gaudí: explosionsof organic formand colour

At its heart, thecity remains atraditionalMediterraneanbarrio

Ferran Adrià knows how to keepgourmets guessing.

The chef and co-owner of El Bulli,the modest-looking restaurant innorthern Catalonia that has beenrepeatedly judged the world’s bestplace to dine, could have extendedhis franchise around the globe asother chefs have done and opened ElBullis in London, New York andTokyo and elsewhere.

Instead – in an announcement thatshocked the thousands who striveeach year to secure a reservation atthe 15-table, 50-seat restaurant – MrAdrià declared in January last yearthat he was closing it for guestsfrom the end of July this year andturning it into a kind of creativeresearch laboratory.

This was typical of the restless MrAdrià and his partner Juli Soler.They are innovative and creative notjust in the kitchen but in the waythey choose to run the business andthe educational activitiesincreasingly attached to it.

Rather like one of his famousfoams – they included scrambled eggfoam, and raspberry foam servedwith Szechuan pepper ice-cream – MrAdrià and those around him arealways bubbling with ideas. Theyhave championed the application ofscientific methods to cooking, boththrough ElBullitaller (the creativeworkshop) and by supportingCatalonia’s Alicia (Alimentación yCiencia) Foundation near themonastery at San Benet de Bages.

Among the latest initiatives are41º and Tickets, a cocktail barand a tapas bar opened by Ferranand his brother Albert in Barcelona,and Ferran’s new role as a teacherat Harvard University, wherehe says he will talk not onlyabout the science of cooking but

also give classes in creativity.But he makes it clear in an

interview at El Bulli, next to a quietcove near Roses just south of theFrench border, that the mostimportant project of the moment isthe new foundation that will takeover El Bulli after it shuts its doorsas a restaurant in the summer.

“I never said I was going to retire.Every five or six years, we’vetransformed ourselves,” he says. “Weare rebuilding our whole corporatestructure. Now the apex is the

life. I’m not a multimillionaire. Idon’t have Ferraris or yachts. I havea normal life.

“We’ll have interns, but not onlyyoung people – let’s say the head ofa hotel kitchen in Thailand, inBangkok, he could be 50 years old. Ifhis dream is to create and he hasnever been able to do it, he can takea year’s sabbatical, and if he’stalented, he can come.”

Mr Adrià is not exactly modest,but he says chefs are not rock stars,dislikes the egocentric traditions of a

Reinventing the gourmetfoundation. I’m going to fulfil mydream. I have the chance to do it.Dreams are not supposed to cometrue, but in our case they do.”

He makes a comparison withBarcelona, his favourite – andgenerally victorious – football team.“I won for many years, but thesystem doesn’t let you win all thetime. The system could be tired ofFerran Adrià and El Bulli, so beforethe system gets tired of you, it’sbetter to invent a new system.”

For Mr Adrià, a crucial aspect of

the research and development to bedone at the foundation by the 30 orso people who will attend is thateverything – successes, failures andnear-misses – will be shared with theoutside world. “Each day on theinternet – that’s the revolution –we’ll publish everything we’ve done,like a digital newspaper.

“It’s as if Norman Foster saidtomorrow he was going to close hisstudio, set up a foundation there,continue creating and shareeverything. I’ve had lots of luck in

once-secretive profession and doesnot claim that chefs are moreimportant than, say, people who curecancer. What he is serious about iscreativity, whether artistic orscientific, and if possible not doingthe same thing twice – orinnovation, as it is known in thebusiness world.

“In my case, creativity isn’t work;it forms part of my life,” he says, asa photographer shows him the latestimage of one of his culinarycreations for a forthcoming book.“My language, my way of expressingmyself, is cooking.

“In 1984, when I arrived here, thewords creativity and innovation werealmost prohibited in kitchens, notjust in Spain but around the world.Nouvelle cuisine, for example, wascreative but cooking wasn’tcategorised as something that couldbe a creative discipline. Absurd, butthat’s the way it was. People saw itas something that didn’t deserve theword creative.”

Mr Adrià says his cooking – whichis sometimes criticised by moreconventional chefs such as the lateSanti Santamaría, also a Catalan, aspretentious and over-engineered – isinfluenced by his “feeling” forCatalonia, but also by the 100 dayshe has spent travelling in Japan.

It is 6pm, and in a few hours ElBulli will be packed with dinerseager to taste its newest creations.

The cost is high but not extreme –about €250 per person if you includewine – and the owners havesuccumbed to the lure of somecorporate bookings at €115,000 a timebetween May and July to helpensure financing for the foundationfor the first eight to 10 years.

“My work now is to raise moneyfor the foundation,” says Mr Adrià.But he has not forgotten theimportance of accessibility. He goesto the kitchen to taste the mealprepared for the staff – tomatoeswith basil, paella with crabs and flan(crème caramel) – one of a seriesthat will double up as a new book offamily meals. The cost per head: €3.

InterviewFerran AdriàVictor Mallet talks to theinnovative chef whoseworld famous El Bullirestaurant shuts in July

Ferran Adrià: ‘before the system getstired of you, it’s better to invent a newsystem’ Victor Mallet