Case study: Developing an inclusive growth agenda in Barcelona

24th Jan 2017

Barcelona is the second largest city in Spain and the capital of the autonomous region of Catalonia, with a population of 1.6 million people and an urban area of around 4.9 million (Eurostat).

The city forms the core of the Barcelona-Lyon megaregion (Trullen, 2015). Barcelona has transformed its economic base. In the 1970s and 1980s the city experienced significant deindustrialisation of basic industries. In response, extensive physical regeneration was combined with a development model that focused ‘heavily on knowledge, entrepreneurship and value-added services’ (OECD, 2009; page 16). The city is an important centre for high-technology content exports, with strong investment in R&D and high rates of entrepreneurship (Ibid). Barcelona is also at the cutting edge of smart city technologies, having developed a range of projects linked to economic, social and environmental imperatives (BIS, 2013).

While the Barcelona labour market appears to be particularly cyclical, the clear trend has been towards employment growth over the past three decades (Trullen, 2015). Between the mid-1980s and the 2007 financial crisis, Barcelona managed to marry economic growth with a trend towards greater equality in income distribution (Trullen, 2015). Barcelona experienced strong employment growth between the mid-1980s and mid-2000s, adding in excess of 1.2 million jobs (Trullèn, 2014). Over the same period the proportion of the population with higher level qualifications increased, and inequality (as measured by the Gini coefficient) decreased (ibid). During the economic crisis, large numbers of jobs were lost in the city (Ibid), there has been a rise in long-term unemployment (Torres, 2015), and inequality (Trullen, 2015).

The most recent data published by the OECD for the Barcelona Metropolitan Area (from 2012) suggested GDP remained below pre-crisis levels, and that the unemployment rate was in excess of double that of pre-crisis rate. Both these patterns mirror wider national experiences since 2007-2008.

More recent figures from 2014 suggest something of an improvement in recovery, although significant challenges remain (Barcelona Activa, 2014). The current context for developing inclusive growth is therefore quite different from the pre-crisis period.

Governance

The political leadership of the city has shifted as a result of the 2015 Barcelona City Council election, which saw success for Barcelona en Comu (Barcelona in Common), a grass-roots party developed by activists and citizens (for an overview of the development process see Aragon et al, 2015); with the party now governing the city as a minority government. The new Mayor of Barcelona Ada Colau Ballano rose to prominence as a housing activist campaigning against evictions. As the capital of Catalonia, Barcelona has significant decentralised powers, including around housing, transport and economic development.

The city’s budget expenditure in 2015 was 1,996 million Euros. Of this, 80.6million Euros is spent on economic development and employment, 90.4 million Euros on housing and city planning, and 243.1 million Euros on social services and social promotion.

The strategic budget priorities which set the context for spending decisions in 2015 were:

  • Take care of people, especially the most vulnerable;
  • Economic reactivation and employment creation;
  • Make Barcelona run with high-quality services, setting a new smart city model; and
  • Barcelona recognised as city of culture, knowledge, creativity, innovation and welfare.

An important challenge to developing strategic policy is reconciling the needs and preferences of a number of administrative areas – 10 districts and 73 neighbourhoods.

Strategy, vision and leadership

Barcelona Activa plays an important role in economic development and employment policy. The organisation is a municipal company of the City Council and leads on policy orientated towards ‘business creation, business growth, human capital development, innovation promotion, and employment’ (OECD, 2009; page 44).

The organisation is responsible to a significant extent for implementing political leaders’ vision of growth and economic development in the city.

The Barcelona Activa report (2015) provides a sense of the breadth and scale of an organisation’s activities. Some key outcomes of these in 2015 were:

  • Support given to 54,648 people;
  • Employment and skills support given to 26,982 people (5,168 people at risk of exclusion);
  • Academic and careers guidance given to 16,077 students;
  • Entrepreneurship support given to 14,850 people;
  • Start-ups mentored – 2,813;
  • Business projects set up – 213;
  • Companies supported – 5,966; and
  • Training activities funded – 23,963.

(Source: Barcelona Activa, 2015)

Barcelona Activa managed a budget of more than 37 million Euros in 2015, 89% of which was allocated to employment and skills, and business and entrepreneurship provision.

The strategic approach to linking growth with inclusion is set out in the new Barcelona Employment Strategy 2016-2019, which identifies the following high-level strategic priorities:

  • Increasing actions for the improving employability for all;
  • Placing employment at the centre of the municipal policy; and
  • To develop territorial employment projects and services.

The strategy aims to reduce the median income gap between neighbourhoods and address the unemployment gap between neighbourhoods. The need to build effective collaborations and link services is an important element of developing and delivering the strategy.

Design, Implementation, Monitoring

The Employment Strategy is coordinated by Barcelona Activa and will include job and education placements. A number of areas of interest around inclusive growth are included (with individual projects sitting under these). These are:

  • Service integration – looking at the potential opportunity of employment offices (at least one per district) which provide a range of core services as well as specifically targeted local services; and, creating improved procedures for data sharing;
  • Human capital and vocational education and training (VET) – increasing VET and access to VET for disadvantaged groups;
  • Job creation – identifying sectors or projects to generate jobs growth, creating a ‘regulatory framework’ establishing ‘employment as a priority issue’, and revising and enforcing social value clauses in contracting; and
  • Job quality – through applying a ‘quality of employment’ criteria to jobs offered through employment services, and creating ‘seal of employment quality’.

Exemplar themes and initiatives

A range of policy and programme actions sit beneath the strategic aims - selected activities are:

Strategic

  • To map resources and provision and to establish a ‘city-level political agreement, and if possible metropolitan, which agrees and articulates an employment strategy and its carrying out, with the participation and complicity of all the economic and social stakeholders who are key in terms of fostering employment’;
  • To include a ‘gender perspective’ to all actions;
  • To establish knowledge exchange and learning opportunities between stakeholders and municipalities;
  • To establish greater integration of employment services; and
  • To define a set of measures and indicators to track progress of strategy impact.

Increasing actions for ‘employability for all’

  • To improve the development and use of LMI to anticipate employment opportunities;
  • To focus on job quality through applying a ‘criteria of quality of employment’;
  • To prioritise support for ‘women in situations of vulnerability or precarious employment, over 45 years old in situations of long-term unemployment or people without papers’;
  • To seek to develop a local employment office model with co-location of services;
  • To develop new projects targeted at the most disadvantaged localities and/or groups in the city;
  • To increase access to, and provision of, vocational training, dual training, skills accreditation – guaranteeing ‘access to training for employment for all, giving priority to the most disadvantaged groups and/or at risk of exclusion’;
  • To create a Vocational Training Network with training providers and employer/sector bodies;
  • To increase digital literacy; and
  • To increase the provision of municipal training programmes.

Employment at the centre of the municipal policy

  • To identify sectors or projects in the city to generate employment;
  • To establish a ‘regulatory framework’ that places employment ‘as a priority issue on the political agenda of the current municipal government’; and
  • To use social clauses to maximise employment outcomes, such as payment of a minimum salary based on the cost of living, and use the same salary to agree collective bargaining agreements for public sector workers.

Adapt the services to the territory and the needs of the people

  • Create a catalogue of services and provision and fill gaps through local provision; and
  • Increase co-operation around service delivery between stakeholders and districts.

(Source: Draft Employment Strategy 2016-2019; stakeholder interviews).

The interventions outlined in the strategy build on the Agreement for Quality Employment in Barcelona (2008-2011) between the City Council of Barcelona, the two largest trade unions (CCOO del Barcelonès and UGT), the two largest business organisations (Foment del Treball and PIMEC ) and the Government of Catalunya (OECD, 2009). The agreement set out a consensus of the Barcelona development model.

Other previous examples of projects and programmes in the City include developing inclusive growth at project level through a partnership between The Parks and Gardens Municipal Institute (PGMI) and the City Council’s employment advisory team (EAL) (Trujillo, 2015). The project team assessed the needs of employees with disabilities and provided tailored training; the EAL developed individual action plans to improve work situations. The project also helped link employees with access to other services to improve well-being.

The Labora programme is targeted at unemployed people, particularly those at risk from social exclusion.

The programme is a public-private partnership between 140 local businesses and the Catalan Entities for Social Action, the Federation of Insertion Companies of Catalonia, and the Red Cross (Torres, 2015). The programme creates a ‘protected labour market enriched with job opportunities for the most at risk’. The main target beneficiaries are young unemployed adults, those with substance addictions, the long-term unemployed, women without benefits, migrants and those aged over 55.

Conclusions

The strategy for developing more inclusive outcomes is strongly focused on employment as the mechanism for linking growth and social improvement. The strategy focuses on established areas of intervention in the city, such as programmes and projects for particular disadvantaged groups, as well as new elements such as the use of social value in procurement and direct public sector employment as a way of growing wages.

The strategy also emphasises increasing the role of vocational education and training in improving labour market outcomes. The focus of the strategy is on outcomes, in particular the income gaps between – and unemployment rate between – city neighbourhoods.

It was acknowledged in stakeholder interviews that success in growing the quantity and quality of jobs would also depend on wider economic development policy and industrial strategy, while the political leadership in the city has expressed concerns about an over-reliance on mass tourism.

For more information and references, see our report and appendix.