The Autonomous Community of Madrid, one of the smallest in terms of geographical area, with its 8.028 square kilometers, is not small in terms of its economic activity. Suffice it to say that the cumulative growth of its Gross Domestic Product (GDP) between 1995 and 2001 was 28%, more than four points above the national average.
Looking at more recent dates, it is worth noting that the Madrid economy grew by 3,27% between November 2002 and November 2003, significantly above the national growth rate.
Analyzing this favorable economic situation requires considering various factors, such as its geographical centrality within Spain and its role as a hub for national communications, its administrative status as the capital of Spain and the nerve center of the highest levels of government, and the existence of an advanced and developed business sector that houses a significant number of headquarters for financial and business institutions. Indeed, in 2002, companies located in Madrid represented 14,2% of all Spanish companies.
Another interesting fact regarding Madrid's business sector is that 99,72% of the nearly 385.000 companies based in the Community of Madrid in 2002 were SMEs (with 0 to 249 employees). By sector, 57,51% were in the service sector, 24,33% in commerce, 11,19% in construction, and the remaining 6,96% in industry.
Between 2001 and 2002, the Community of Madrid saw an increase of 6.832 new businesses, most of them SMEs and primarily micro-enterprises, although the largest relative increase compared to other regions was among larger companies. By business sector, construction experienced the most growth throughout the period.
Foreign Trade
This significant flow of industrial, financial, and administrative activity has propelled the Community of Madrid to the top spot as a region receiving foreign investment within Spain. Indeed, according to the Synthetic Indicator of the Madrid Economy (ISEM), in the first half of the year, effective foreign investment in the Community of Madrid accounted for 78,5% of the total invested in Spain, an increase of 65,5% compared to the same period of the previous year. Furthermore, it is worth noting that Madrid's investment abroad represented 76,1% of the national total, ahead of the Valencian Community and Catalonia.
Recent studies also demonstrate that the implementation of the euro as the single currency of the European Union increases its growth potential, since it favors the internationalization process of national companies based in Madrid and makes this community a gateway to the Latin American market.
The trade balance of the Community of Madrid is substantially negative, stemming from the need to import capital goods, semi-finished products, and consumer goods primarily to supply both the large number of companies located there and its more than five and a half million inhabitants. Thus, in 2002, the balance showed a deficit of almost 27.344 million euros.
At the institutional level, the Madrid Regional Trade Directorate acts as a liaison between the Commercial Offices, the Ministry of Economy and Trade, and businesses. As its head, Juan Sebastián de Erice, points out, "the Delegation provides Madrid businesses with services and support for their international activities through top specialists." To this end, it has Commercial Offices that offer technical advisory services for companies seeking internationalization. The Delegation also represents the State Secretariat for Trade and Tourism and the Spanish Institute for Foreign Trade (ICEX) in the Community of Madrid. Other activities are decentralized, such as information sessions on countries and markets (JIMEX), courses and seminars, and the Foreign Promotion Initiation Plan (PIPE 2000), a program in which it collaborates with the Madrid Institute for Development (IMADE). Furthermore, established channels of collaboration exist with the Madrid Chamber of Commerce and Industry regarding all matters related to information, conferences, seminars, calls for proposals, etc. As Juan Sebastián de Erice points out, "the Delegation offers specialized international services that are not sufficiently well-known among companies."
Tourism
The Community of Madrid has also consolidated its position as an international tourist destination in recent years, thanks in part to the regional government's commitment to tourism based on the principles of sustainability, diversification, and reducing seasonality, as well as through ongoing collaboration with the private sector. As a result, Madrid received more than 6.196.000 tourists in 2002, according to data from the National Institute of Statistics (INE), representing a 2,33% increase compared to 2001, while growth in 2003 was around 3%.
Spain's capital city is distinguished by its vibrant cultural scene and diverse population, offering visitors countless leisure and entertainment options. Its monuments faithfully reflect its unique history and that of Spain as a whole, from the Habsburg era through the Enlightenment to the present day. Landmarks such as the Puerta de Alcalá and the Plaza Mayor, as well as the "cultural pyramid" formed by its three major museums—the Prado, the Reina Sofía, and the Thyssen-Bornemisza—have become true symbols of the city.
But the cultural and scenic richness isn't limited to the capital. The Community of Madrid boasts a truly attractive natural setting. To the north, the mountain range known as the "Sierra de Madrid" offers beautiful springtime scenes and equally stunning snowy landscapes in winter, perfect for skiing at the resorts of Navacerrada, Valcotos, and Valdesquí. At the foot of this mountain range stands the Monastery of San Lorenzo de El Escorial, commissioned by Philip II and later used as a royal pantheon. Other palaces belonging to the National Heritage within the Community of Madrid include the Royal Palace of Aranjuez, in the south of the region; the Royal Palace (Palacio de Oriente), in the capital; and the Palace of El Pardo, in the town of the same name.
But Madrid has also become a hub for business and meetings. In this respect, the capital made a significant investment decades ago to equip itself with the necessary infrastructure for holding these types of events. A prime example is the Madrid Municipal Conference Centre, managed by the Campo de las Naciones Municipal Company, which hosted more than 230 events in 2002, attracting over 200.000 attendees.
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