When it comes to Spanish football, two cities are always top of mind: Madrid and Barcelona, proud homes to the iconic teams Real Madrid and FC Barcelona. Their legendary rivalry knows no borders, drawing in over 500 million viewers globally for ‘El Clásico’ showdowns. However, the dominance of Madrid and Barcelona extends far beyond the pitch. With metropolitan populations of 6.8 and 5.7 million respectively, the two cities are also the engines driving the Spanish economy forward.
Julius Baer in Spain: A story of growth
It’s hardly surprising that Julius Baer’s presence in Spain mirrors the country’s dominant economic hubs. The bank established its Madrid office on the prestigious Paseo de la Castellana in 2013. Six years later, it expanded its footprint by opening an office in Barcelona, located on the equally esteemed Avinguda Diagonal. “Since entering the Spanish market, our progress has been remarkable,” notes Sergio de Miguel Jessel, Market Head of Iberia. “Opening a second office in Barcelona in 2019 was a natural step, allowing us to build stronger relationships with our clients in Catalonia, the Valencian Region, and the Balearic Islands.”
A close competition in many aspects
Both Sergio and his colleague Pedro Oliver Payarols, leader of the Barcelona team, bring a distinct international perspective to their work, having lived abroad for extended periods – Sergio in Luxembourg and Pedro in Zurich. This allows them to approach sensitive topics with a certain distance. One such topic is the often-discussed rivalry between Madrid and Barcelona. “I believe the issue is more prevalent in the media than in everyday conversations,” notes Pedro. Sergio shares his colleague’s sentiment, attempting to diffuse any potential tension: “Barcelona is a fantastic city. While it has faced challenges recently, it’s currently experiencing a resurgence.”
It’s undeniable that residents of Spain’s largest cities aren’t particularly interested in this hypothetical competition. However, it’s not surprising that the media finds the topic captivating. The reasons go beyond football and politics: few countries in the world have two centers that consistently rival each other in various economic indicators, with alternating leadership roles over the years.
Madrid takes the lead in 2017
In 2018, headlines announced a significant shift in the economic landscape of Spain. The autonomous community of Madrid had surpassed Catalonia in terms of GDP. Although the news broke in 2018, the actual event took place in 2017, when Madrid’s GDP reached 224 billion euros, narrowly eclipsing Catalonia’s by 1 billion. This milestone marked a turning point in a longstanding economic rivalry, with Catalonia having traditionally held the lead. Since then, Madrid has maintained its position, expanding its advantage through higher growth rates.
“We’re witnessing an unprecedented surge in investments here in Madrid,” notes Sergio. “This process began some time ago and can be attributed to a combination of factors. Similar to other major European capitals, Madrid has benefited from the aftermath of Brexit. Additionally, the city’s business-friendly environment has attracted a substantial volume of foreign investments, particularly from Latin America, earning Madrid the nickname ’Little Miami’.”
Catalonia doesn’t rest on its laurels
It’s tempting to portray a narrative of a thriving centre and a stagnant periphery. However, this couldn’t be further from the truth. Despite Madrid’s recent surge, Catalonia’s economy has continued to grow steadily since 2017, with a cumulative increase of 26%. Although the COVID-19 pandemic caused a significant downturn of -11.9% in 2020, the region’s economy rebounded strongly in the subsequent three years, achieving an impressive annual growth rate of 5.4%. This pace is only marginally slower than the Madrid region’s growth rate of +5.7% and there’s good reason to believe that Catalonia may one day reclaim its status as Spain’s most powerful economic region.
A long-standing history of entrepreneurship
The optimism around Catalonia’s growth is rooted in innovation, a trait that Barcelona has long been proud of. Alongside the Basque Country, Catalonia underwent rapid industrialisation in the 19th century, leaving much of the rest of Spain stuck in its agrarian past. It’s no coincidence that the first railway line in Spain was constructed in 1848, connecting Barcelona to the coastal town of Mataró. Many stunning industrial buildings in the distinctive Art Deco style, scattered throughout Barcelona, serve as a testament to this golden era of Catalan entrepreneurship.
Barcelona’s startup scene: From textiles to tech
Over the past few decades, Barcelona has worked tirelessly to write a new chapter in its industrial story. While textiles drove growth in the 19th century, the city’s second industrial revolution is now fueled by tech – encompassing sectors such as healthtech, e-commerce, IT, gaming, food tech, pharma, IoT, cleantech, and travel. A prominent symbol of this shift is the Mobile World Congress, which relocated to Barcelona in 2006 and has since become the world’s premier exhibition for the connectivity industry, drawing over 100’000 attendees annually. This success has paved the way for numerous other conferences hosted in the city. To ensure a lasting impact, local authorities have invested heavily in creating a supportive environment. According to Pedro Oliver, “We’re witnessing a proliferation of tech-related initiatives, including the creation of dedicated startup districts, large tech hubs, and coworking spaces.”
Oliver notes that this vibrant startup ecosystem coexists harmoniously with the rich tradition of long-established Catalan family businesses, many of which have spanned three or more generations.
Claiming a spot on the EU podium
The data suggests that Barcelona’s innovation narrative is more than just anecdotal. In 2024, Catalonia was home to 2,285 startups, more than double the number in 2016, according to ACCIÓ, the Catalan trade and investment office. Notably, 86.7% of these startups are concentrated in the Metropolitan Area of Barcelona, earning the city the distinction of being the third-largest startup hub in the EU, trailing only Paris and Berlin. Furthermore, 407 of these startups achieved significant growth in 2024 and have reached the level of scaleups – these are companies that have secured funding of at least 1 million euros, excluding acquisitions and publicly traded entities.
The outlook appears bright, with the Startup Heatmap Europe Report 2024 naming Barcelona as the second-most preferred destination for entrepreneurs looking to establish a startup in the EU, after Berlin. This achievement is particularly noteworthy, given that in most EU countries, the capital typically leads the pack.
More startups in Barcelona, more money in Madrid
While Barcelona can take pride in its thriving startup scene, Madrid is rapidly closing the gap, with only slightly fewer scaleups (267) in 2024 compared to Barcelona. Moreover, when it comes to securing funding, Madrid has already taken the lead. In 2023, Madrid attracted 605 million euros in startup investments, surpassing Barcelona’s 457 million euros. This dichotomy has resulted in a unique scenario, where Madrid dominates in terms of funding, while Barcelona excels in sheer startup numbers.
Madrid’s status as the country’s financial capital undoubtedly contributes to its fundraising prowess, which is also reflected in the high concentration of fintech startups. Alongside mobility and transportation, fintech represents one of the fastest-growing segments within Madrid’s startup ecosystem.
No winner, only winners
Given the narrow margin between the two cities, declaring a single victor would be futile. Unlike in sports, economic competitions often end in a win-win situation. The Spanish example illustrates this perfectly. The rivalry between Madrid and Barcelona has not only strengthened these two economic powerhouses but also had a positive trickle-down effect on other regions. As Sergio de Miguel notes, “Medium-sized cities like Valencia, Bilbao, Málaga, and Seville have entered the fray, expanding the country’s growth landscape.” This surge in entrepreneurial activity has led to remarkable wealth creation, with the assets of wealth management clients in Spain doubling over the past decade to reach 786 billion euros by the end of 2023.
A growing demand for financial expertise
Spain’s thriving startup scene presents a lucrative opportunity for wealth managers. According to Sergio de Miguel, Julius Baer has successfully capitalised on this trend: “Many entrepreneurs appreciate our own entrepreneurial spirit, characterised by lean processes and agility.” This cultural alignment enables the bank to better grasp the needs and aspirations of its new clients. “We offer a comprehensive perspective on their wealth, considering both short-term goals and long-term legacies,” Sergio explains. “Our ultimate objective is to serve as a trusted family office for these individuals.”
Despite their expertise in their respective fields, many entrepreneurs require guidance on financial matters, as Pedro Oliver observes. “Being an engineer or IT specialist doesn’t necessarily qualify someone as a financial expert,” he notes. However, these individuals are accustomed to making autonomous decisions, requiring a highly personalised approach from wealth managers. This includes a flexible blend of advisory and discretionary investment services. “As Swiss bankers, we emphasise a meticulous investment process, minimising uncertainty wherever possible,” Pedro concludes.
A singular focus on private banking
What does the future hold for Julius Baer amidst Spain’s vibrant economy? For Sergio, the answer is clear: “Our mission is to become the leading international wealth manager in Spain. We’re committed to achieving this goal, and I’m confident we’ll succeed.” Emphasising the bank’s unwavering dedication to private banking, he adds, “At Julius Baer, we don’t have a plan B – our sole focus is on delivering exceptional wealth management services. This laser-like attention to our core business resonates deeply with our clients across Spain, whether in Madrid, Barcelona, or elsewhere.”
When asked about his own personal plans, Sergio reveals a willingness to adapt and explore opportunities. Could that even include the unthinkable – in the form of a relocation to Barcelona? “Although I’m very happy in Madrid, I wouldn’t hesitate to relocate to Barcelona if needed,” he replies. “After all,“ he jokes, ”I’d still get to enjoy ‘El Clásico’ from the guest tribune!"