business plan for catalan smb's english

Business plan for Catalan SMEs

2013-16

Business opportunities in an independent Catalonia Grup d’Estudis del CCN. February 2013

2

1. Objectives of the business plan for Catalan SMEs

2. Environment Analysis

i. Economic (macro)

ii. Demographic

iii. Legal

3. Consumer-Customers-Markets

4. Differential social features

5. Catalan State SWOT and Executive summary

6. Annexes

Index

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3

1. Objectives of the business plan for Catalan

SMEs


i. Economic (macro)

ii. Demographic

iii. Legal




6. Annexes

Index

4

Catalan SMEs should prepare for the new situation in the

short term that means having an independent state

Failing to prepare is preparing to fail.

Is very necessary to include the probable scenario of an independent state in the three-years strategic plans.

Entrepreneurs know how to manage the environment changes and transitions to new scenarios. Now we have to count on a new Catalan State that will defend our economic and social fabric.

Those who spread the discourse of fear among employers are those who, in parallel, are preparing their own “Plan B” to be the only ones to benefit when the separation arrives.

The CCN provides information, support ans advice to guarantee that all Catalan SMEs thake this scenario into consideration in their future business plans.

5

This document is meant to be the working base to make the

most of new opportunities and overcome the challenges that

Catalonia will provide in the short term

Anticipate the independence scenario.

Be well prepared to make the most of the big economic opportunities the

new Catalan state will provide.

Having enough knowledge base to counter the discourse of fear that

surrounds small entrepreneurs.

Avoid the risk of paralysis caused by lobbyists who want to keep the people

from deciding their social and economic future.

Have a business strategy in the medium term (3-5 years) and a short-term

action plan (1-2 years) with the foreseen data and trends for the new

scenario.

6


2. Environment Analysis i. Economic (macro)

ii. Demographic

iii. Legal




6. Annexes

Index

7

GDP growth forecast

Exports and tourism

Quantification of a Spanish trade boycott

Generalitat’s deficit or surplus and Catalan state budget

Debt and Public deficit

Financial capacity

Tax burden reduction

Unemployment evolution

i. Analysis of the macroeconomic environment with

an independent state

8

The annual Catalan GDP is set above the 200,000 million

Euros per year and represents between 1.4%and 1.5% of

European GDP

Source: Idescat / Eurostat

9

The volume of Catalan GDP is comparable to that of other

Western Europe states

Source: Eurostat

120.000

160.000

200.000

240.000

280.000

320.000

360.000

2.000 2.001 2.002 2.003 2.004 2.005 2.006 2.007 2.008 2.009 2.010 2.011

Norway Austria Denmark Catalonia Greece Finland Portugal

10

The main industries that generate Catalonia’s GDP show a

diversified economy

Source: Idescat (http://www.idescat.cat/pub/?id=ceac&n=2.1&t=2011&x=7&y=10)

INDUSTRIES 2.000 2.001 2.002 2.003 2.004 2.005 2.006 2.007 2.008 2.009 2.010

1.942 2.176 2.006 1.893 1.858 1.786 2.235 2.153 2.048 2.136 1.959

Industry 31.331 33.295 33.616 34.425 36.235 36.630 38.360 40.021 40.283 35.793 36.888

Manufacturing Industry 29.087 30.832 30.927 31.533 33.022 32.944 34.490 35.841 35.504 30.582 31.549

Construction 10.996 12.493 13.778 15.063 16.876 19.463 22.309 23.596 24.338 23.201 21.139

Services 70.774 75.876 82.241 89.642 96.092 104.536 112.626 122.177 129.109 129.136 128.759

PPAA, education,

healthcare and social

services

13.166 13.945 15.050 16.494 17.850 19.290 21.007 23.266 25.569 27.105 27.373

Trade, hospitality,

finances and other

services

57.608 61.930 67.190 73.148 78.242 85.247 91.618 98.912 103.540 102.031 101.386

VAB 115.042 123.841 131.641 141.023 151.061 162.417 175.529 187.948 195.777 190.267 188.745

11.238 11.868 12.853 14.488 16.461 18.790 20.940 20.258 17.176 13.862 16.810

GDP 126.281 135.708 144.494 155.511 167.522 181.205 196.470 208.205 212.954 204.128 205.555

Agriculture, forestry

and fishing

Net taxes over products

1

2

3

4

11

The main component comes from the services sector, as in

other advanced economies, representing 130,000 million

Euros per year

Font: Idescat

1

2

3

4

12

The value of the agriculture sector GDP remains around

2.000 million Euros per year. Its weight in the overall GDP

falls steadily

Font: Idescat

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

0

500

1.000

1.500

2.000

2.500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Agricultura, ramaderia, silvicultura i pesca % PIB

1

13

The value of the industry sector GDP remains around 40.000

million Euros per year and its weight in the overall GDP

remains around 20%

Source: Idescat

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

30,0%

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Indústria % PIB

2

14

The value of the services sector GDP is around 130.000

million Euros per year. It weight in the overall GDP has

reached 63% in the last years

Source: Idescat

52,0%

54,0%

56,0%

58,0%

60,0%

62,0%

64,0%

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Serveis % PIB Serveis % PIB

3

15

The value of the construction sector GDP is around 20.000

million Euros per year. It’s weight in the overall GDP is 10%

Source : Idescat

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

0

5.000

10.000

15.000

20.000

25.000

30.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Construcció % PIB

4

16

Catalan entrepreneurs have the world as a market, because

they know that Spain will be in recession for many years

Catalan exports have experienced a year growth for 30 consecutive months

Catalan exports surpass the 55,185 M € in 2011, breaking the record of 2008 before the

crisis

The growth of exports in 2011 was 13.5%, higher than that of France, Germany or

Netherlands

17

Barcelona, is ranked number 8 in the Top-25 global destinations.

Prestigious names: Pau Casals, Antoni Gaudí... Olympic Games 92, Barça, Salvador

Dalí, Picasso, Ferran Adrià, Manuel Castells, Andreu Mas-Colell, Xavier Sala i Martin,

Juan Ignacio Cirac...

Barcelona is ranked number 5 in Top European Cities and Catalonia is ranked number

in Top European Regions

Modernism, Romanesque, Gothic, Medieval towns, Renaissance

Climate, geography, Mediterranean, quality of life, food, sports

Catalan cuisine recognized worldwide

Congress and Business Tourism (Mobile World Congress...)

Medical Tourism

Barcelona’s Port, leading destination for cruises, and airports

Tourism provides opportunities for additional growth in

business, cultural and historical tourism

18

There are great opportunities if take advantage of what we have:

o Our climate

o Quality of life

o Geographic positioning

With a new State that reverses the trend of relocation

o attractive research and development

o advantages promoted by the Catalan Public Administration

o growth in incomes and the economy

Business to develop:

Create better public safety in Europe

Plan to learn 4 languages

Program to empower the history of Catalonia

Program to restore cultural and historical assets

Promote the brands 'Catalonia' and 'Excellence from Catalonia'

Catalonia can accommodate professionals and high income

residents with their professional activities when combined

in a balanced way what we have and what we will have

19

The Catalan economy has a level of openness to foreign

trade and a balance of trade much higher than Spain

Economy’s level of openness in 2011 (exports+imports over GDP)

94,0%

43,0%

Catalunya

Espanyasense

Catalunya

Payments balance

in relation to GDP, year 2011

Source: Eurostat, Idescat

20

Kenneth Rogoff

Former head of the International Monetary Fund, Professor of Economics at Harvard

The economic viability of the Catalan State has been

confirmed by renowned economists

Source: El Periódico, Expansión, Ara, La Vanguardia

“An independent Catalonia would be one of the richest countries in the world"

" An independent Catalonia is economically viable"

"Europe will tell Spain to not bother Catalonia"

Santiago Niño-Becerra

Professor of Economics at the Ramon Llull University

" Catalonia is viable as an independent country and what is not viable is the

current relationship model with Spain "

Oriol Amat

Professor of Financial Economics and Accounting at Univ. Pompeu Fabra

James Mackintosh

Editor of Investment s at the Financial Times

“An independent Catalonia would have the highest GDP per capita within the

Mediterranean countries”

21

Enrico Spolaore

Professor of Economics at the Universitat de Tufts (Massachusetts, Estats

Units). Co-author with Alberto Alesina, of The Size of Nations (2003)

The economic viability of the Catalan State has been

confirmed by renowned economists

Source: uoc.edu, economista.es, CNA.com

«An independent Catalonia would be as economically viable as any other

country»

“The independence of Catalonia from the rest of Spain would not mean

economic disaster for the Catalan region”

Gary Stanley Becker

Nobel Prize in Economics in 1992. Member of the National Bureau of Economic

Research and professor at the universities of Chicago and Columbia

“If Catalonia were independent it would create the same level of confidence that

has allowed Ireland to grow so dramatically in the last 20 years”

Erling Kydland

Nobel Prize in Economics in 2004. Professor at the University of California

22

Among others, because of the diversified and value Catalan

model versus the Spanish centralized and speculative

model

At an economic level, a Catalan independent state will be able to develop strategies based on our strengths and weaknesses.

The Catalan model, very diversified, with thousands of small and medium enterprises, is clearly different from the centralist Spanish model focused on financial, construction and public utilities multinationals

The two models have nothing in common, and so, considering that there’s only one state to manage these so different realities (besides other communities), and that the Spanish mentality is so centralist, it is clear that the limited resources of the Spanish state will be invested in those strategies that promote the Spanish model.

To promote the Catalan model is essential to have their own State. With an independent State we can further enhance the areas in which we still maintain European leadership (food, biomedical, pharmaceutical) and lead new hubs from technology start-ups that are created continuously, but often can not grow due to lack of funding and support.

23

The Spanish economic model is not sustainable and sinks,

even having Catalonia within Spain

Catalonia, with just over 7 million inhabitants, has more than 600,000 companies. The

distribution of these firms by sector shows a modern economy, with an important weight of the services sectors and a good presence of industry and technology.

Regarding the size of Catalan companies, should be noted the importance of SMEs, representing 99% of the total number, with a very significant presence of autonomous.

Obviously the weight of SMEs in GDP is lower (52.9%) than large companies, but is a real economic grid that maintains the country and creates jobs.

This structure is not similar overall Spain. Spanish governments are clearly in favor of big multinational companies, especially in regulated industries, banking and construction, and those are the ones lobbying and exercising real pressure on the government.

In recent years there has been a clear collusion between the Spanish government and these large companies, many of which are included in the lobby called the Puente Aereo Forum. We could say that these companies had not noticed the crisis, often through government aid, while the SMEs are clearly unassisted.

But Bankia and Iberia have highlighted the inconsistency of some of these companies that had to conquer the world. They were a great illusion.

“Cap on s’encamina Espanya”, CCN, febrer 2013

24

European states that have recently become independent have

grown more than twice the average of the European Union

GDP Growth

European countries that became

independent recently (Czech Republic, Slovakia, Croatia,

Latvia, Slovenia, Estonia)

European Union

countries average

Source: Eurostat

“… A hores d’ara a Catalunya aquest és un

tema ja força estudiat per gent competent. Per

exemple, per Jacint Ros Hombravella a La

viabilitat econòmica de la independència de

Catalunya, per Modest Guinjoan i Xavier

Quadras a Balanç econòmic de la

independència o a Les raons econòmiques

de la independència del Cercle Català de

Negocis. Estudis que no amaguen els

problemes que en un primer moment hi podria

haver –com n’hi va haver a Finlàndia, a

Estònia, a Eslovènia o a Àustria mateix quan

es va desfer l’Imperi austrohongarès–, però

que es podrien superar com s’han superat en

aquests casos. Per cert, brillantment…”

http://www.jordipujol.cat/ca/jp/articles/11313

25

S’ha calculat l’increment del PIB i el pressupost de la

Generalitat de la Catalunya independent a través dels

multiplicadors fiscals

The elimination of the fiscal deficit will allow the Catalan Government to significantly increase their income during the early years of the Catalan State.

At the same time there may be a Spanish trade boycott to certain Catalan products.

These two factors have been considered in the calculation of the Catalan Government's Budget, calculations based on two studies: “Macroeconomic effects of catalan fiscal

deficit with the spanish state (2002-2010)”, Tremosa i Pons

“Sense Espanya”, Guinjoan i Cuadras

Given the current economic crisis it has been considered that a part of the additional income will be used for non-productive items.

It has been considered that after 5 years the effects of the lack of fiscal deficit will loose their impact on the Catalan Government income.

A boycott has been considered: Year 1: High

Year 2: Moderate

Year 3 and later: Residual

The overall result of the absence of fiscal deficit and the boycott on the income of the Catalan Government are: Year 1: 5,1% of additional income

Year 2: 7,3% of additional income

Year 3: 8,4% of additional income

The effect of the boycott in a reduction in the VAT collection has also been considered: Year 1: 4,0 %

Year 2: 2,5%

Year 3: 1,0%

Considerations Impact on Generalitat’s budget

26

The GDP growth is given by the largest investment in

infrastructure by the increase in domestic demand and the

increase the budget of the Catalan Government

Catalonia’s GDP (thousand million Euros)

-0,5% +1,2% +3,1% +4,8%

+6,0% +5,3%

Source: http://stats.oecd.org/, http://www.conference-board.org/data/globaloutlook.cfm, estudi

CCN: “Els països petits son viables econòmicament”, “El pressupost del Estat Català 2013-2016”

In the next four years of being an independent state, the Catalan GDP

growth will average 2.25% per year within the forecast

of the EU and OECD (0,9%-2,2%)

27

The Catalan State would be the 4th country with the highest

GDP per capita in Europe

Sources: Eurostat GDP per capita in PPS, Anàlisi CCN

European countries GDP per càpita 2011

(100 = European average)

189

151

131

129

129

126

125

118

116

Noruega

Suïssa

Holanda

Catalunya Estat

Àustria

Suècia

Dinamarca

Bèlgica

Findlàndia

28

Source: Pol Antràs i Jaume Ventura.

34% 60% 50% 10,2%

Trade balance: estimates of the effects of a possible boycott to

exports to Spain

Sales to

Spain

Max. Impact of

the boycott on

sales *

Effect on

Catalan

GDP

Recovery

other markets

16,7%

13,3%

Consumer Products (a)

(a) importance 1/3 x 0,5)=16,7% consumer products

(b) importance 2/3 x 0,2)=13,3% capital goods

* Maximum probability: 100% exports SP - (40% Multinationals in Catalunya) = 60%

Capital goods (b)

3,06% GDP Loss

29

Income corresponding to the Catalan economy would increase

from the beginning of independence

- 8,5 %

GDP

40% population

20% businesses - 4 % GDP

- 2 % GDP

- 3 % GDP

20% population

10% businesses

30% population

15% businesses

¿Trade boycott?

+ 8,5 %

GDP

Net Profit with an

independent State

+ 4,5 %

GDP

+ 6,5 %

GDP

+ 5,5 %

GDP

No h

i h

a r

isc d

’exclu

sió

econòm

ica

The study of Modest Guinjoan i Xavier Stables (Sense Espanya, Ed. Pòrtic), analyzes

several historical examples and the structure of trade in raw materials, semi-finished and

finished, based on the input-output tables of 2005 and concludes that in the case of

maximum boycott, we'll recover more than 4.5% of Catalan GDP.

Average yearly

plundering of

CAT

30

Boycott scenarios foresee a boycott of short duration and

compensable by the Catalan State

Even a direct survey done on the Spanish population shows that a boycott for political

issues would not in any case be followed by the majority, it would reach 20% of the

population.

Generalized boycotts are not feasible:

The origin of many products is unknown.

Not all the products we offer have alternatives with a similar price and quality manufactured

outside of Catalan territory.

The relationship of the consumer of the final product and the one with the raw materials

buyer are different. For the later, the profitability criteria are more important than political.

In short, the possible boycott can be inconvenient, especially in some areas, but in

general it should not be a problem greater than the direct benefits of achieving an

independent State. In the medium term, indirect effects will be even more important

and the effect of a possible boycott may be reduced up until practically disappearing.

31

Banc d’Espanya, A.Castells, Departament d’Economia i Finances de la

Generalitat de Catalunya 7.11.2009 - Generalitat de Catalunya Ecomomia i

Coneixement

The capacity and financial soundness of the Catalan

Government makes us a leading country in Europe

After 7 years

without fiscal

plundering, there

would be no debt

but a surplus of

84,968 MMEUR

Catalonia generates enough wealth to become a net contributor to the EU, reduce

debt faster and provide services and infrastructure for its citizens, not being

permanently blocked by Spain.

32

The Catalan State will be able to reduce the current high tax

burden, reducing the average rate of social contributions,

income tax and corporation tax by 10% in 3 years

Income Tax

Social security

contributions

Corporation taxes

Heritage, inheritance and donations

Income from direct taxes (million Euros)

5 points reduction of average rate




2,5 points reduction of average rate

2,5 points reduction of average rate


Source: CCN: “Pressupost del estat català 2013-16”

33

During the first years, the public deficit would be higher

than the one set by the European Union (3%), but would

rapidly fall to 1,4% by 2018

Public Deficit on GDP of Catalonia

The deficit increases in the first 2-3

years because taxes are reduced

and pensions are increased (3% of

GDP)


34

Catalonia will have a debt level of 80%, below the European

average (85%)

Evaluation and guarantee of the Catalan State may vary dramatically. Over 16,000

million euros of the fiscal deficit with Spain would be counted as income, the multipliers

would have a positive effect on the economy, higher than the initial impact of the tax

gain, it might even reduce the tax burden with the expected increase in consumption and

investment, affecting the economy and employment levels, as well as allowing the

improvement of social policies.

During the first years, the public deficit would be higher than the one set by the

European Union (3%), but would rapidly fall to 1,4% by 2018.


35

Catalonia has favorable indicators to get a pretty good credit,

among AA and AAA, when it becomes a state

Figure represents only the relative position from best (1) to worst in the considered group for each economic variable analyzed

Catalonia has favorable indicators to get a pretty high credit.

The initial classification of the Catalan state can be between AA and AAA.

Countries with a AA/AA+ rate had (by 15th August 2012) an interest rate between 2% and 3,5%

and and average 2,44%.

So Catalonia could see its interests to be paid reduced from the current +6% (and 4% average) to

near 2,5 - 3%

Source: CCN: “La ratio del deute sobirà de Catalunya”

36

With this level of debt and deficit, the risk premium of the

Catalan state will be low (about 140 points), similar to

Belgium

Risk premium Country Rate

Interest S&P Fitch Moody's

Suïssa AAA AAA Aaa 0,634

Japó AA- A+ Aa3 0,854

Dinamarca AAA AAA Aaa 1,284

Suècia AAA AAA Aaa 1,514

Alemanya AAA AAA Aaa 1,534

Finlàndia AAA AAA Aaa 1,644

Regne Unit AAA AAA Aaa 1,674

EUA AA+ AAA Aaa 1,804

Holanda AAA AAA Aaa 1,834

Canadà AAA AAA Aaa 1,924

Àustria AA+ AAA Aaa 1,974

Noruega AAA AAA Aaa 2,094

França AA+ AAA Aaa 2,144

Rep. Txeca AA- A+ A1 2,464

Bèlgica AA AA Aa3 2,614

Catalunya AA/AAA AA/AAA Aa3 2,750

Xina AA- A+ Aa3 3,374

Austràlia AAA AAA Aaa 3,394

Malaisia A- A- A3 3,484

Nova Zelanda AA AA Aaa 3,684

Polònia A- A- A2 5,014

Itàlia BBB+ A- Baa2 5,804

Espanya BBB+ BBB Baa3 6,704

Hongria BB+ BB+ Ba1 7,454

Portugal BB BB+ Ba3 9,954

Grècia SD CCC C 24,564

Source: CCN: “La ratio del deute sobirà de Catalunya”

37

The Catalan financial system now controls a 19:24% of deposits and 17:22% of loans in

Spain and two of the most creditworthy banks with core capital of> 10% (CaixaBank and

Sabadell) are Catalan.

The M-3 money mass fell by 5% on average. The recovery of the fiscal deficit authorizes

the Government to design systems to stimulate the economy and revive the credit

through the public banking to recover the money supply to generate growth after a fall in

the consumption of 4 points.

The money supply is linked to production and consumption. Growing economic activity

would increase the money supply, the proof is that the M3 Eurozone fell by 0.9% between

10/11-2012.

The Catalan financial system will contribute to the economic

recovery by reactivating credit through the Catalan central

bank

38

The change in income and expenses will lead to a positive

primary balance adjusted by the economic cycle

Primary balance (austerity reached) income tax modified public spending

Positive comparison of Catalonia with other countries , adjusted by the cycle, the

generation of GDP and the allocation of total income and expenditure from Catalonia with

its own state with the information contained in the projection of the Catalan State budget

Catalan. (a) The tax increase is not attributed to the tax burden. Is attributed to the elimination of the fiscal

deficit caused by the tax forfeiture of Spain. Source: Fiscal Monitor october 2012 I.M.F.

(a)

39

This will result in a tax burden lower than 35%, among the

lowest in Europe

Tax burden over Catalonia’s GDP


40

The unemployment rate for the Catalan State has been

calculated using three different methods

Through statistical analysis of data from the OECD, we have determined the variables that

influence the unemployment rate in a country

Applying statistical methods for the significant variables, we obtained a statistical model

By applying this model on data from Catalonia, we obtain the unemployment rate for the

Catalan State

Statistical Method

1

Mathematical

method

2

Comparative

method

3

There is a direct mathematical relationship between government spending and GDP of a

country

In the Catalan State, the absence of plundering will allow greater spending

Applying Pons and Tremosa’s method of autoregressive values (2002) in a Catalan State

not suffering plundering, we get the unemployment rate

From unemployment in countries with similar magnitudes in Catalonia, we deduce which

would be the unemployment rate for the Catalan State

Font: CCN: “L’atur a la Catalunya estat”

41

Comparing the three methods used to estimate the

unemployment rate in the Catalan State we conclude that it

would be around 12% for the 2013-16 period

Unemployment rate in Catalonia Unemployment rate in the Catalan State

If we continue being in Spain the unemployment rate will be over 25%

42

In conclusion, the Catalan state is viable, prosperous, and will

improve quality of life and competitiveness of Catalan

companies

Catalonia, as a sovereign state, will be one of the most prosperous and

solvent countries in Europe

The national debt of the Catalan state will be less than the average for the

European Union and the risk premium will be similar to that of Belgium

The Catalan Government will multiply its revenue by 2.3

This revenue will allow:

Cover costs associated with the infrastructures of state

Increase the budget for all departments

Cover unforeseen as a possible trade boycott

Reduce the tax burden

Develop the necessary infrastructure for the country

Supporting innovation and internationalization of Catalan companies

Contribute funds to the European Union

Guarantee the payment of pensions

43

Population growth rates

Life Expectancy

Population pyramid

Emigration abroad

ii. Analysis of the demographic environment with

an independent state

44

Catalonia is part of a large group of nations which range

between 8 and 12 million inhabitants

Source: Eurostat

Between 60 and 80 million






Up to 1 million

Catalonia has a population

similar to that of Sweden

and Switzerland, and higher

than that of Denmark,

Finland and Norway

45

Catalonia's population is estimated to exceed 8 million by

2020 and to reach almost 9 million by 2040

Source: Institut d’Estadística de Catalunya

46

Catalonia's population has a younger age component than

the Spanish one

The weight of the 20-39 years range is higher than the European average.

The overall percentage of younger age gives Catalonia more time to make changes

to public and private programs to ensure the future pensions of Catalan people.

Sources: Dades 2011, Institut d’Estadística de Catalunya, Instituto Nacional de Estadística Español, Eurostat

47

The growth rate of the population of Catalonia is higher

than in Spain. This difference is much clearer when we

compare it with the one of the European Union

Sources: Institut d’Estadística de Catalunya, Instituto Nacional de Estadística Español, Eurostat

Younger age components and higher growth rates generate less cash tensions on

the Catalan pensions system

48 Source: Institut d’Estadística de Catalunya

The growth of migration (around 150,000 inhabitants / year)

has stopped in recent years because of the crisis. In recent

years, the migration balance was almost neutral.

Only one out of three immigrants came from

Europe, two-thirds come from far away continents.

In the last three years this distribution has been

very stable.

Europa UE Europa no UE Àfrica

Amèrica Àsia/Oceania

49

New political system

Labor

Fiscal

Civil

Immigration

iii. Analysis of the legislative environment with an

independent state. Changes to be expected.

50

The first statement of the Catalan state must restore our

sovereignty and international subject

An Independence Declaration

A statement on the will to reinstate Catalonia’s sovereignty

A declaration of the will to consider Catalonia as an heir and

successor of the Spanish State, and a continuator of its

monetary sovereignty.

A declaration in favor of Peace, Rule of Law, Democracy and

Human Rights, specifically referencing the Letter of Human

Rights, the UE Letter of Fundamental Rights and the European

Council agreement to protect national minorities, among others

51

The independence declaration must be public and formal

and has to include a set of statements

A statement on the pro-European will, and the guarantee that

European law will be applied in Catalonia.

Accession to Helsinki’s Final Act (1975), the Nuclear Non-

Proliferation Treaty, the Purposes and Principles in the

Charter of the United Nations: Chapter I, among other law

rules.

A call in favor of Catalonia’s readmission in the International

Community.

The opening of a constituent process and the drafting and

adoption of the Catalan Constitution by referendum in

Catalonia, where among others, it will be defined:

State organizations.

Territorial organization.

Rights and duties of Catalan people

Language status

52

The full legislative capacity will allow to achieve the overall

objectives of Catalan society

Pass a law of legal transience Ensure the functioning of the State

Ensure energy supply

New legislation Adapt EU directives

Adapt Spanish legislation

Legislative adaption to our social and economic model: Reduce unemployment to European levels : Lower from 24% to 11%.

Increase opportunities for young people. Go from 47% to 20% youth unemployment

Reaching an R & D between 2% and 3% of GDP

Reach 20% of GDP in the industrial and energy sectors

Attracting and retaining multinationals

Promote patents in universities and business

Simplify the process of business creation. Minimize procedures and time needed to start a business

53

It will be possible to legislate to strengthen the priorities of

the Catalan economic fabric for the benefit of all

Entrepreneurship Law

Training to adapt workers to new jobs

Collaboration Plans University - Business (including microenterprises),

mentoring, training students

Specific training in entrepreneurship at universities and business schools

Facilitate access to credit and markets

Setting up micro-financing for start-ups

Improve the taxation on investment and reduce and simplify taxes for SMEs

Establish a quota for public acquisitions to SMEs for all public bodies

Facilitate transfer of business (as Re-empresa of CECOT)

Reduce or eliminate penalties for failure (Second Chance Act)

Administrative simplification

Promote SMEs by reducing the size of contracts

54

The public administration will change to a digital and agile

21st Century model with a modern labor legislation

Public Administration

The basis of legal regulation for

public administrations and their

public workers (...), the common

administrative procedures, (...)

and the responsability system of

all public agencies.

21st century public workers statute

Simplify relations with the administration, reducing paperwork,

bureaucracy and costs

Digitalization of administration

Labor legislation

New work contract

Insolvency Law

Autonomous worker statute

New unemployment insurance, community work according to

the profile of the unemployed

55

The Catalan financial system will have direct access to ECB

and will have liquidity to finance sales of Catalan exporters

to the world

Monetary system: Currency

convertibility and exchange, basis

of credit planning, banking and

insurance.

Adequacy of the credit market

ICF Catalan Public Bank

Payment on account Law

Outing of housing inventory

Customs regime and foreign trade. International agreements with other European countries

to benefit on economies of scale and synergies

(France, The Netherlands, Finland, Ireland...)

Catalan Agency for International Expansion

“Product of Catalunya”,“Made in Catalonia”:

international quality brands

The largest Catalan banks (CaixaBank B.Sabadell) have been evaluated positively by

the EU and are classified as systemic with CoreCapital> 10% assets. This involves

direct liquidity through the Catalan Central Bank .

The consolidation of the network ACC1Ó abroad and the empowering of the

“Catalonia” brand, leveraged on the famous "Barcelona“, will multiply our world trading

capacity.

56

The Catalan State will enable to revive the economy with an

overall reduction of taxes on the economic activity

Treasury and

Government debt

Corporate taxes, Income taxes

VAT

Taxes on fuel

Rates reduction

Minimum higher than the current one

Single rate applicable up to certain level of labor

income

Deduction to self-employed for hiring

Basic legislation and

Social Security

economic regulation

Reduce Social Security contributions

Create the Catalan Pension Reserve Fund

Catalonia, as an European country with the ability and willingness to reinvest the

general surplus in their own economy, would produce huge economic and social

benefits, being one of the best countries in the European Union for their benefit and for

the benefit of its zone of influence.

57

The Catalan Government will be able to set up a plan to

solve the infrastructures blocking generated by Spain

(...); ports of general interest; airports of general

interest, control of airspace, traffic and air

transportion, meteorological services and aircraft

registration.

Fourth runway at the El Prat Airport

Railways and land transport; the general

communications regulation; traffic and motor

vehicle circulation; Post and telecommunications;

aerial cables, submarine and radio

communications.

Mediterranean Corridor to Europe

Improve motorway network

Medium distance trains linking the

population centers of Catalonia

58

The Government will be able to take specific measures immediately to restore our competitiveness and solvency

Competitiveness

• Information society.

• Science, R+D.

• SMEs internationalization.

• Education. English.

• Reduction of administrative burdens.

Fiscal measures:

• Rental market: equal treatment with property.

• Fiscal measures to reduce the deficit.

• Lower taxes to R+D and environmental activities.

Environment

• Energy and environmental policies.

• CO2 Emission-reduction.

• Efficient infrastructures and transportation.

Fiscal sustainability

• The Catalan State reports quarterly to the EU Council of Tax Policy

• Monitoring and correction of the deficits.

• Debt / GDP with a deficit of 1, 5% to arrive at the figure of 23% in 2013.

59



i. Economic (macro)

ii. Demographic

iii. Legal




6. Annexes

Index

60

Attractiveness and competitiveness of the Catalan business

sector to foreign direct investment

Industry markets (B2B)

Consumers markets (B2C)

Types of consumer segmentation

Public demand

New opportunities for B2B markets from being an

independent State

New opportunities for B2C markets from being an

independent State

3. Consumers. Clients-Markets: Consumption

Variables

61

Despite the current situation of Catalonia, the investment is ready for its potential growth,

now conditioned by the current economic crisis and the stimulus associated with the

dumping of Spain when granting public funds to locations in the capital of Spain.

But Catalonia has been able to maintain its GDP i is a magnet for foreign direct

investment priority projects (FDI).

2013 presents an opportunity to invest at Catalonia, given the low labor costs, increased

productivity and competitiveness of established companies with proven remarkable

capacity for exports.

However, it is necessary to strengthen the development of non-bank financial products,

needed in the necessary deleveraging of the financial system..

Catalonia is a favorite destination for foreign direct

investment (FDI)

62

In the 2006-2010 period the number of foreign companies in Catalonia grew by 13% to

reaching, by the end of 2010, a total of 3,381 companies, in a scenario where global

flows of foreign direct investment are drawing a new international scene.

It is remarkable the concentration of foreign companies in Catalonia in relation to the

implemented in Spain. This is particularly pronounced in the case of Japanese firms

(85%), Italian (67%), American and French (63% and 62%, respectively).

Catalonia is a geostrategic region as a platform for

multinationals

Foreign

investment in

Catalonia with a

total of 3,381

companies and

corporations

63

The geostrategic location of Catalonia, especially aimed at economic areas in Asia, with

the ports of Barcelona and Tarragona in the Mediterranean and its access to the

European logistics can attract investment and profits in the medium term for the whole

area of economic influence that it generates.

Among other infrastructures it is important to consider the Hutchinson Port Holdings,

which will be able to move up to 2.65 million TEUs, Barcelona's airport network

(International Hub), Reus, Girona and Lleida Alguaire; High speed train connections and

future connection for goods conducted by the EU that connects the major industrial

centers of the EU's Mediterranean coast.

The Barcelona area concentrates the interest in the location of centers specializing in

global business functions or lines and shared service centers. Logistics, technology of

information and communications, biotechnology ... link to creativity, design and culture,

tourism and service sectors for people

with a high added value.

We have a logistics platform for international trade with a

high growth potential

64

Alba synchrotron, UPC o having the 4rt (IESE) and 7th

(ESADE) Global MBA allows Catalonia to be very suitable for

analytical services, development and testing.

Value factors are the ability to export, industrial development,

specialized human capital, the level of infrastructures the

location and the legal ease to invest. Along with the

"Barcelona" brand, adding value and prestige to the

investment.

Catalonia is an economy relatively well positioned within the

EU. By their level of GDP per capita (PPS terms) it has already

been 20% above the average for the EU-27.

Fira de Barcelona is a gateway to world trade. Innovative

economic sectors such as telecommunications business can

enjoy Mobile World Congress in Barcelona that makes of

Barcelona the world capital of the sector.

Investors especially appreciate the ability to service, the

exporting vocation, training, branding and flexibility

65

International investors evaluate with a strategic vision the attractiveness and

competitiveness of Catalonia, together with its transparency to foreign trade and its

logistical potential.

The smaller states are more effective in a world without barriers, so the viability of an

economy depends on the degree of financial transparency. Nowadays the ease of

movement of people from one state to another state makes the size of a State less

important.

Also, both economic theory and empirical evidence indicate that the size of a country

does not have much influence on economic growth, as demonstrated by countries like

Denmark, Austria, Norway, the Netherlands and Switzerland, for example.

Catalonia as a country will have the flexibility that now has

not to position itself competitively and successfully in the

world

66

All companies need to achieve a reliable and cost-effective demand for their

products or services.

If the company sells products / services of final consumption, their demand comes

from customers who are individuals (or families), we are in the Consumer Market.

If the company sells to other companies (products / services) and their demand

comes from these other companies, within a given supply chain (supply chain), or

even the product is, in essence, for final consumption (eg Flam), if the company

produces for another that sells it under its own brand, we are in the Industrial

Market.

Overall another distinction that affects business is the one between domestic

market or exports.

In the current environment of economic globalization it is difficult for a company to

know where’s the final consumption within the supply chain and under what criteria

purchase decisions are made.

In the present case a significant status change would take place.

Analysis of markets: consumers, companies and

changes to come when becoming an independent State

67

Industrial Products/Services companies depend on the supply decisions and

industry agreements with their customers (other industry companies), that is within

their supply chain and/or the overall relationships between industry companies.

They may also find that their relationship framework, trade agreements, technical

standards, partnerships, etc ... vary.

And, therefore, every company must re-examine the advantages and

disadvantages of a new situation.

In general, the client company is increasingly aware that their competitiveness is

based on working with maximum efficiency (innovating and improving products,

processes and marketing), and expects from their suppliers a relationship that

adds value in the whole relationship, not just the mere transaction : Product

received – Price paid.

Customer of industrial markets value business efficiency

and complete value offer

68

Therefore, the aim should be to maintain and expand industrial relations and long-

term partnerships that,, adding value to the buyer based on a complete "value

proposition" (not just "product"), make it very difficult for the customer to change to

another provider. Harnessing the power of the whole framework of industrial

relations.

A fundamental aspect of a country is its industrial production capacity, the later

distribution later in domestic sales and exports.

Catalonia generates more than 86,000 million within its expanded industrial sector.

A més a més del volum de negoci agregat (que és superior a uns quants membres

actuals de la EU), és molt important ser conscient té un conjunt ben diversificat i

equilibrat de capacitats tecnològiques i productives que es complementen i un alt

nivell d’internacionalització i d’exportació.

Catalonia has created a powerful network of contacts and relationships with

customers and suppliers by the values of quality, reliability and appropriate prices.

Industrial markets integrate their distribution and export in

a globalized world

69

In the field of Industrial Products Marketing, the existence for each company of a

network of contacts, relationships, agreements with other institutions and companies

has been confirmed for years as a critical factor in industrial competitiveness (as an

outcome of various strategic decisions, level of costs, quality, innovation, trade

capacity, product extension, etc ..)

Catalonia generates more than 86,000 million within its

expanded industrial sector

Catalunya

C.N.A.E-

2009 Milers € %

TOTAL 86.035.898 100,0

10-11-12 Alimentació, begudes i tabac 17.919.482 20,8

13-14 Textil i confecció 2.896.498 3,4

15 Cuir i calçat 372.244 0,4

16 Fusta i suro 566.029 0,7 17-18 Paper, arts gràfiques i reproducció de suports gravats 4.271.206 5,0

19-20-21 Coqueríes, refi, químiques i productes farmaceutics 21.687.327 25,2

22 Manufactures de cautxú i plàstics 3.695.025 4,3

23 Productes minerals no metàlics 1.846.941 2,2

24 Producció, 1ª transformació i fundició de metalls 3.839.609 4,5

25 Productes metàlics 5.072.822 5,9

26-27 Productes informàtics, electrònics, òptics i elèctrics 3.525.320 4,1

28 Maquinaria i equipament 3.703.011 4,3

29-30 Material de transport 11.198.299 13,0

31-32 Mobles i altres industries manufactureres 1.435.689 1,7

33 Reparació e instal·lació de maquinaria i equipament 1.622.670 1,9

35 Producció d’energía eléctrica, gas i vapor 2.383.725 2,8

Vendes 2011 sectors industrials+la seva distribució

70

2,25%

4,73% 5,31%

6,99%

8,17% 8,46%

9,87%

11,28%

12,69%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Saldo exterior/PIB

Globalization has pushed sales outside Catalonia and

B2B trade

The trade balance includes total sales outside of Catalonia (Spain and the world). We

have observed a consolitated trend to replace sales in Spain for sale in the rest of the

world, leading our economy to the desired situation of selling less to a market in downturn

who’s also a bad payer, and sell more to other countries with far more trade opportunities.

The trend for 2013-2016 doesn’t take into account the fiscal multipliers of independence,

which implies an increase in the projected numbers.

Tendència

71

The complete offer of value no longer depends only on companies. In the current

context of a globalized economy increasingly based on knowledge, relationships

between companies, clusters, logistics chains, the intelligent use of ICT, etc. ... the

social, institutional and infrastructure framework is crucial.

We are thinking on a Framework that provides companies with:

An approach to public investment decisions that favor the industrial fabric

A network of Catalan ports and airports truly managed according to the needs

of our industry

The improvement of the general level of education

Universities endowed enough to be the first step of R & D

A Mediterranean rail corridor that opens all Mediterranean coast to agricultural

and manufactured products

A tax system that helps companies to produce wealth and distribute it fairly

State support to the export industry

Reasonable administrative costs

An independent Catalan State will dramatically improve

the competitive environment for industrial markets

72

The company that manufactures consumers good may find that its client changes the

perception of the product because of its origin: in some markets positively, in others

negatively.

It can also find that their relationship framework, commercial agreements, technical

rules, etc ... vary. Or that distribution behaves under global criteria and does not give

the final costumer the chance to decide.

Therefore, each company will have to re-examine the advantages and disadvantages

of the new situation.

But in any case, can a company remain only in its domestic market, it being

Catalonia or the whole peninsula, even with a quality product and reasonable price?

Usually not. It is necessary to open up to global markets.

And, ¿success on those markets depends only on the copany and its efforts?

No, it depends a lot on the context in which it works, that must provide a good

reputation for the country, efficient and not costly logistic infrastructures, a cultural

environment that promotes innovation, good communication networks, technical and

information services that facilitate efficient supply chains, social and institutional

structures that promote good work, etc...

Consumer markets can address local or global sales in a

new framework of state support

73

The growth of consumer markets will be given by the

increase of per capita GDP and decreased unemployment

56,2% 55,8% 57,0% 57,0% 57,6%

58,9% 60,2%

61,5% 62,9%

64,3%

40,0%

45,0%

50,0%

55,0%

60,0%

65,0%

70,0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

% Despesa en consum de les llars /PIB

125.025

136.662

149.383

40.000

60.000

80.000

100.000

120.000

140.000

160.000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Despesa en consum de les llars (€)

The forecast already takes into account possible effect of a change in the balance of trade

with Spain on the demand increase according to the study about "the 2013-2016 Catalan

State budget" carried out by CCN

The effect of the average increase in GDP expected for the next 4 years (2.25%) in

consumption, goes from 1, 3 to 1% in 2012, to 45% in 2017

74

And all this to convince a future consumer which is more aware of the pairing Price /

Quality, which tends to extends to Price / Quality / Utility / Sustainability, which promotes

the concept of proximity (real or virtual), and values the product as much as the

experience it provides.

All the framework mentioned before is crucial: social, institutional and infrastructures.

To learn the consumption methods of a society, we can describe and quantify the social

groups that form it, according to their orientations, life goals or lifestyles.

The segmentation of the population into the different

consumer types allows us to analyze buying trends

Noms Sigma Catalunya

Burgesia Establerta 9%

Tradicionals 15%

Populars precaris 10%

Escaladors 10%

Consumidors adaptats 15%

Vanguardistes 7%

Progressistes acomodats 15%

Rebels reactius 9%

Postmoderns 11%

Total 100%

Source: Sinus sociovision

75

The measure of social status vs. the orientation of basic values has proven to be an

optimal way of representing these groups :

The social axis makes a formal classification summarizing social objective

characteristics: level of education, type of employment, income...

The values axis represents the classification of social groups according to different

lifestyles, desires and goals, spirituality / religion, attitudes towards work, efficiency,

and many others.

In the next two maps we describe which is the distribution of Catalan and Spanish

society according to these axes.

The most notable is that Catalonia is a particularly attractive market for companies that

offer products / services intended for customers who belong to more progressive and

modern social groups and who have a higher purchasing power. A market predisposed

to buy products with high added value.

A particularly profitable market no company would want to renounce to.

Catalonia is a particularly attractive market for products /

services intended for a market inclined to purchase

products with high added value

76

Higher

Average

Lower

Social Status

Basic Values

1

2

3

A B C Traditional

Sense of duty, order Modernity

Status / Possession / Pleasure “being” instead of “having” /

Autorealització

Post-modernity Subjectivisme

“Jo”

Tradicionals 15%

Burgesia establerta 9%

Progressistes acomodats 15%

Escaladors 10%

Consumidors adaptats

15%

Populars precaris

Rebels reactius 9%

Post- moderns

Vanguar- distes

7%

11%

10%

A3

B3

AB23

B2

AB1 B12

B23

BC2

C2

The increase in incomes and falling of unemployment in an

independent Catalonia would allow to recover the retail market

© Sinus sociovision

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