2009 21
Idea for the City of Barcelona: Entrepreneurship Zone
Published by MartinVarsavsky.net in General with No Comments
Barcelona is one of the best cities in the world. But unemployment is also one of the highest of the cities of Europe. Attending SIME in Barcelona I had the following idea. In the past tax free areas were created at airports, or in countries that wanted to have tax free zones for manufacturing. Barcelona still has a Zona Franca. But in the service economy that we live in now there are new impediments to entrepreneurship. Especially in Spain where entrepreneurs are always personally liable for their ventures, where it is hard to create a new business, where the government is always on your back. So I propose that Barcelona starts a Zona Franca de Emprendedores. Now how could an Entrepreneurship Zone work? Well it would be a closed area in which rules are different. For example social charges are not 50% over salaries as they are in some cases but they are say 10%, and so are taxes that employees pay, but also social benefits are low, no unemployment insurance for example cause as we know to find the winning start up an economy has to accept many start up failures. Barcelona already has @22, the entrepreneurship district. It just needs to change the working rules for those who work there. No income tax, no unemployment insurance.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars
No Comments
victor on May 21, 2009 ·
There’s any precedent of this “Enterpreneur Duty-Free Zone” in other countries??
Spain needs of the Enterpreneurs pushing on innovation and workplace creation….
Andrés Catalán on May 21, 2009 ·
There are indeed precedents of this kind of “special interest” areas.
In India and China there are free trade areas (“zonas francas” in Spanish) that are devoted to certain kinds of industry, such as IT services or manufacturers of electronic components.
One caveat, though: incentives and disincentives always distort the actions that one would undertake under a given setting, and they could bear unforeseen effects, such as impoverishing the regions that surround the free trade areas, or the “temptation” for the hosting country to abate the free trade regime in order to hold up the established companies and force them to pay taxes regularly.
dude on May 21, 2009 ·
Sure, 100k people living in a country without hardly having state. Would they be allowed to vote? What a liberalist you are..
Martin Varsavsky on May 21, 2009 ·
First of all I did not invent the concept of Zona Francas or Tax Free Zones which generate employment and pay very little or no tax. There is a Zona Franca in Barcelona now and there are some in the Canary Islands. Secondly those 100K people are now unemployed, unhappy and a burden to society. An employee in Spain that costs 2400 euros to a company after social charges and his/her own taxes he or she gets 1400 euros. Plus there are many other reasons why this person is unlikely to be hired by an entrepreneur who is unlikely to start a company including unlimited liability, difficulty laying off people, etc, etc. So what I am proposing is that during the birth of a company, and only during the birth, the first say 2 years, and NOT to existing company. This company be allowed to hire without paying social charges and its employees paying no taxes. Then things would transition to normal.
jp on May 22, 2009 ·
Here in Belgium startup company’s get a 50% reduction on social charges for the first 2 years on al their emloyees. But then I also know some people abusing this system by moving around eployees from 1 company they own to another one wich actualy does the same work.
José Luis Agell on May 22, 2009 ·
Thanks for your post and your idea. I also believe that Barcelona is one of the best cities in the world, And when it comes to innovation it could be a reference worldwide.
A Zona Franca de Emprendedores, with favorable conditions for entrepreneurs and new ventures, would definitely foster innovation in the city.
Carlos on May 22, 2009 ·
Martin
Nice dream. And I say dream because current financial downturn and therefore, current regional & national governments’ needs to get money from anywhere, will make this impossible.
They will try to erode our businesses and money, to increase our taxes, to put additional handicaps to entrepreneurship, … but they’ll never stop us having ideas. Yours is another good one. A shame it can’t be named “idea”… it should’ve been named “dream”.
Go on having dreams.
Best,
C
Herbert on May 22, 2009 ·
Yes, I heard your speech yesterday at Sime and I really wished that your idea would be taken up for discussion by the responsible ones.
But I´m afraid that this does not happen, because the thoughts and ideas like yours are usually only understood by the circle of entrepreneurs or entrepreneurial thinkers.
Unfortunately, we are in the minority and those responsible ones are mostly excluded from this circle.
But yes you should never give up hope, and maybe the current economic situation supports a change in thinking.
So, let´s give them something to think about.
Javier Mares Romero on May 23, 2009 ·
Hi Martin,
I think this is a fantastic idea. However, I wonder why you say that in Spain entrepreneurs are always liable for their ventures. I read this post:
It motivated me to research the legal responsibilities of entrepreneurs in Spain. As some of the comments in the older post claimed, you can in fact set up “formas jurídicas” such as the “Sociedad Limitada Nueva Empresa”, the “Sociedad Limitada” and the “Sociedad Anónima” which have no personal liability provided the capital doesn’t fall below certain thresholds and that there has been no foul play.
Is it the case that, in practice, these provisions are ineffective in preventing personal liability by entrepreneurs?
Thanks,
Javier
Herbert on May 23, 2009 ·
Yes, I heard your speech yesterday at Sime and I really wished that your idea would be taken up for discussion by the responsible ones.
But I´m afraid that this does not happen, because the thoughts and ideas like yours are usually only understood by the circle of entrepreneurs or entrepreneurial thinkers.
Unfortunately, we are in the minority and those responsible ones are mostly excluded from this circle.
But yes you should never give up hope, and maybe the current economic situation supports a change in thinking.
So, let´s give them something to think about.
Leave a Comment
You must be logged in to post a comment.
Pablo Alvarez on May 21, 2009 ·
A very good idea not just for Catalunya.
I think that to promote “start ups” the only reasonable tax would be a “net income tax”.