Pablo Hernández, ZEC: “The Canary Islands have the most important opportunity in the last 30 years to attract investment”

Pablo Hernández González-Barreda was appointed president of the Canary Islands Special Zone (ZEC) in a Council of Ministers in January 2021, at the proposal of the Government of the Canary Islands and the Ministry of Finance, becoming the youngest president at the head of the organization . The, until then, General Director of Modernization of the Regional Executive took the reins of the ZEC at a crucial moment for the organization, as a fundamental tool to reactivate the economy of the Canary Islands, when the pandemic was accelerating the process of digital transformation and the rules of the game with which companies and workers carried out their activities had completely changed since the Covid lockdowns.

“The pandemic has forced digitalization, shown that it is possible to work remotely, and made us reflect on the life we ​​led, full of stress and without time for our families and to connect with nature and with ourselves. Many said ”enough“ to the work frenzy that emptied their lives, and what we know as the Great Resignation began. Today, many people value the benefits of their work, beyond salary. You prefer to live in a simpler way, perhaps earning less, but with more time for your personal life and in an environment that you really enjoy. With the pandemic, people realized that there is no point in earning 5,000 pounds in London if you spend 3,500 on the rent of a tiny flat and when you leave work there is no sunlight because at three it is already night. That has made us rethink the philosophy of work and people are looking for an implicit salary, that is, the one that makes us live better, regardless of the monetary remuneration we receive, ”says Pablo Hernández.

For the president of the ZEC, “the pandemic has been one of the triggers for this opportunity, which means that the quality of life offered by the Canary Islands now has a new value to attract and retain talent. Before, the message did not penetrate. Now, on the other hand, it makes us an ideal destination to invest and work”.

The Canary Islands, a hub of talent and added value that is unique in the world

Pablo Hernández has been a professor and visiting scholar at numerous universities and research centers in Spain and abroad, including the Universities of Harvard, Oxford and Vienna. He thus better understands his commitment to highlighting talent management as a great competitive asset. “I think that the Canary Islands are facing a new opportunity for very important progress, which they cannot let pass by. It is the most important moment in the last 30 years to attract investments that allow us to generate a pool of talent and added value that is unique in the world. In the 1990s, a window of opportunity opened. Some things were very positive, others not as much as expected. The expectations generated by access to the European Customs Union and the Economic and Fiscal Regime of the Canary Islands (REF), due to various vicissitudes, were not fully met. However, I believe that we still have possibilities, even better than then, of economic development very focused on innovation that could be a benchmark in Europe”.

“Why do we have such an important challenge now? Because we are at an optimal time to attract innovative companies and remote workers. In terms of infrastructure we are better than ever. And that is also essential. After 30 years receiving state and European funds, we are the fourth region in Europe with the best air and technological connectivity. We have invested in subsea cables in the tens of millions and our latency is very low with excellent internet connection width. In connectivity we have gone faster if possible than the development of technology itself. Perhaps being far away we were clear that this was vital. We invested and managed to position ourselves among the areas with the best infrastructure in Europe, which is surprising. Not only that, we have cutting-edge airport infrastructures that were developed for tourism, which makes us the second best connected region in Spain. This air capacity that we have as a thriving tourist destination is helping us attract remote workers and companies.”

The implicit salary and focus on talent and training

Pablo Hernández has a degree in Law, a Master's in Taxation and International Taxation and a doctorate in Law from the Comillas Pontifical University, where since 2010 he has been a researcher and professor of Financial and Tax Law. This mixture of a specialized profile in fiscal and tax matters, linked to the world of teaching, explains his passion for defending that “if you unite the different variables, we will be able to attract talent in better conditions, with a lower tax, that employers will be able to use to offer attractive salaries without spending more”.

“Although the worker receives more, it will cost the employer less because of the tax incentives, and because, in the Islands, that worker will be more productive because he will have a better quality of life. That extra stimulus, which beyond salary, is super powerful. I'll give you an example: in the ZEC we have several companies that have reduced the weekly shift from five to four days, because their teams are more productive here. They make an effort and want to leave at three in the afternoon to go to the beach. That argument did not sell years ago because people in European capitals were immersed in the wheel, but today they do seek quality of life. Another ZEC company budgets the entire year with a tax rate of 25% -the reduced rate of the ZEC is 4%-, and the difference is used to pay bonuses to its workers. Honestly, in the current context, I am convinced that the Canary Islands are beginning to write a stage in their history that will be fabulous”.

Pablo Hernández was born in La Orotava, Tenerife, in 1987. He belongs to the millennial generation of digital young people, hyperconnected and with high social and ethical values. As a “digital native”, the president of the ZEC is capable of analyzing the digital transformation we are facing like no other. “In the 90's it was not possible to diversify as intended. And now we are once again in a reset of the world economy and international fiscal conditions. This brings us back to a key situation. The most important thing now is to focus on talent and training. In this way we will be able to adapt to that digital and technological future that many make predictions about and that is already here. It is essential not to miss this new train and the key is training and talent”.

“The Canary Islands proposal solves one of the biggest problems that companies have worldwide, which is the attraction and retention of talent. We are attractive in terms of: quality of life, low fiscal costs, infrastructures... All this solves many of the problems that Startups have, especially technological ones, and reinforces the position of the Canary Islands”, emphasizes the president of the ZEC with conviction.

The TMT boom: Technology, Media and Telecommunications

After a year at the helm of the entity, the president of the ZEC is clear that “there is a boom in the Technology, Media and Telecommunications (TMT) sector. Above all, in relation to creativity, where the Canary Islands -due to their own idiosyncrasies- have always stood out. Certain sectors such as animation, video games or web design have had exponential growth. There is a spectacular content boom and we are working to make the Islands a magnet for this industry”.

Pablo Hernández is pleased that “we are on the map of the sector”. “Within the animation niche we have shown that we are capable of achieving it. We have built an industry in the Canary Islands where there was nothing and now we are probably the main hub in Spain and one of the main hubs in Europe”.

“It is already active, it is tangible, and there are more than a thousand professionals working in the sector. This success story positions us before the entrepreneurs who want to come and those from here who are committed to this business. But it has a second variable: when you already have an industry, creating spin-off industries is much easier. In other words, from animation we can enter the video game industry, programming and other subsectors”, emphasizes Hernández.

Audiovisual sector: from the “natural set” to grow in capacity and quality

“Canarias has been sold a lot as a natural set, and it's very good. But I believe that it is the first phase of a broader strategy, which began between 2011 and 2014. At the beginning, the production companies basically came to shoot and here what was done was to provide accommodation - booking of rooms for the casting, for the equipment-, catering and rental of vans and even the rental of technical materials that were brought from abroad. Subsequently, more layers of added value began to be added.”

“Now there are local production companies that provide technical support, there are more professionals who provide services related to cinema. But there is still a shortage of professionals with the profile to lead a production -production directors, production managers and coordinators, art directors, art assistants, photography-, the more technical professions continue to be brought in from abroad to a great extent”.

For Hernández, “capturing filming is a priority. We have been working with the Vice-Ministry of Culture and with other government areas to promote training and continue to grow in capacity and quality so that this activity generates more wealth in the Islands. As he told him, at first they only asked us for hotels, catering and trucks. Now they hire our machinery and we also provide them with production assistants, carpenters, electricians…”.

“What are we trying to do with the ZEC? We don't want the production companies to just come to shoot, but rather to open their offices here so that their executives can generate more added value on our islands”.

“There are beginning to be more production directors and more production coordinators, and some production companies have already settled here. Of the large groups, Buen Día Producciones (a joint venture between Telefónica and Atresmedia) has established itself this year in the Canary Islands Special Zone. Its second production center in Spain, after Madrid, is here with us”, emphasizes Hernández.

Animation, back office: strategies to cover different job profiles

The president of the ZEC highlights that “animation is perhaps where the development of all the added value in the Canary Islands is best seen, where there is no filming as such, but design is necessary. The entire technical process is done in the Canary Islands, from start to finish. More than 600 direct jobs and more than 400 indirect jobs have been created in this type of company, all with very high added value. And the exponential growth of this industry will mean that we can create many more in the coming years, which will be covered by young people from the Canary Islands, who through professional training will be prepared to join the labor market very quickly in a vocational job with a great future. Before there were 70-80% of employees from outside and now we are around half of the Canary Islands.”

“We have many success stories that we are going abroad with and people are surprised. There are companies in the Canary Islands that work for Netflix, Disney, HBO, Airbus, the London Underground, Lufthansa... And many more will come, but not to set up a delegation, we want them to set up their headquarters here to create an ecosystem that demands workers with a lot of knowledge to lead the course of their companies from the Islands”.

Pablo Hernández clarifies that “we are also maintaining a balance with employment-intensive BackOffices, although in the medium term we do not want there to be secondary offices, but for them to play a significant role in the company's know-how. Because if the management dome is outside, today you set it up and tomorrow they take it down. But in the short term it is important to position yourself and reduce unemployment.”

Maritime sector, renewables, biotechnology

Pablo Hernández indicates that “at an international level, from the ZEC we are also working in the maritime sector together with the port authorities, federations and ship repair and service companies. We are interested in becoming strong in the digitization of the maritime sector, which is a process with a long way to go because its operation is still very analog. Ports 4.0 is one of the priority areas and support companies and the sector with tax incentives in their projects to decarbonise passenger and freight transport”.

Biotechnology is another of the areas in which the ZEC seeks to attract business to the islands with the aim of diversifying the economy of the Archipelago with industries that are sustainable with the environment, little intensive in the use of land and generate wealth in society through of the demand for skilled labour.