The most difficult part of starting a company from scratch, I think, is on the one hand the logistical aspect. You think you are prepared to create a company, but having previously lived under the umbrella of an already established company, and I'm not saying anything if it's a multinational. That startup logistics sometimes becomes quite uphill. And the second thing, which is more psychological but very important, is credibility. When you start a company from scratch, it takes a long time to build a reputation and credibility in the market, and you have to be aware of that and know that in the early years, Caesar's wife not only has to be good but also appear so, because the market is always giving you a kind of second opinion on everything you do or everything you decide. And you have to go proving that you were right, that you know how to execute, and that they can trust you.
The most important thing in a work team is, of course, effort and professionalism. But that translates, in my opinion, into a factor that I value very much: precision. A person must be able to make decisions with precision, explaining why yes or why no they undertake a certain investment, and you have to bear the responsibility of what you have decided. If to that you add an atmosphere of frank camaraderie, in which each person is capable of assuming some negative consequence in terms of workload or effort to help a colleague, then you have achieved the perfect collaborative environment.
For me, the keys to the real estate sector, in principle to be able to develop a long-term career, there are three types of knowledge you should have. You can be lacking in one of them, in two it's worse, and if in all three, badly. In the end, you have to have economic knowledge, especially in the tertiary sector. The tertiary sector is eminently a financial activity. You need to have quite a bit of financial and economic knowledge. That financial and economic knowledge is exercised through contracts, so legal knowledge is absolutely essential. And if you also have the immense luck of having technical knowledge of architecture or engineering, then even better, because it helps you understand in a much more 360-degree way, as the moderns say, the sector in which you work. I unfortunately have not, although I am from sciences, I have not had the luck to study architecture or engineering. Clearly I am lacking there. But I overcome it, I handle it as best I can. By seeing construction sites you also learn, but never with the same level of perfection as a person who has studied and trained for that.
Leadership is not chosen. When you are little, you don't say, 'Hey, what do you want to be when you grow up? A leader?' No. Leadership falls on you as a consequence of an evolution in life that makes you one day have to be responsible for a work team. For me, a good leader must above all lead by example. If you demand professionalism and precision from people, you have to be a professional and precise guy. If you demand effort, you have to be hardworking. If you demand working hours, you have to put in more than others. In the end, it's like in the army: a platoon follows the guy who gets up and assaults the enemy trench first. If you are not like that, it is more difficult for leadership to be lasting.
My mentors have come from above and from my side. From above, I always had a global boss of my division within the bank I worked for, named David Brush, from whom I learned an absolutely pragmatic vision of the different cycles and how to adapt to them, which has helped me a lot in life to anticipate what was coming and to make decisions that involved correcting the foreseeable future effects of what was coming on your activity. And then from my side, I have had the immense luck of always working hand in hand with a colleague with whom I studied from the beginning, and we have always been together, named Miguel Ollero, from whom I have also learned a lot. In particular, Miguel Ollero is probably the one who has contributed the most to my life in terms of precision and responsibility, because he has always been... I am a fairly formal and serious guy, but compared to Miguel, I am a rascal. That is, Miguel is the essence of professionalism and perfection, and from him I have learned the importance of explaining things with total clarity.
Receiving a career award always leaves a bittersweet taste. On the one hand, it is an honor, a recognition, it is wonderful. But on the other, when they start talking about career, it's because you are already a little older. So you know you are already in the final phase of your professional career, or at least in the intermediate plus, not the initial, because in the initial phase it's hard for anyone to give you a career award. That it is given to me by a school of architecture, that for me is touching, because on top of that I am not an architect. I have learned aesthetic criteria through hard knocks throughout my life, the concepts of building by seeing construction sites, but obviously I do not have the technical knowledge necessary to explain or understand the things that an architect understands. And therefore it is very humbling that a guild with which I have had a lot of interaction throughout my life, and an interaction always half-joking, making the typical mutual disrespects like 'you are an office worker' and 'you are a builder of pretty things', in the end it has been a very fruitful relationship and I have great friends in the guild of architects.
Regarding the origins of funds or the sources of capital invested in real estate, their future evolution will depend quite a bit on how the economic structure of Spain evolves. If we continue having a purely public pension system and the private accumulation system continues to be expelled, we will continue to be fundamentally dependent on foreign capital, because there is not enough savings here to invest in the productive activities of the country. All that savings goes to a public system. To the extent that a complementary private system is introduced and that industry develops, I think there would be a fairly healthy process of renationalization or, in a certain way, an increase in the weight of national decision centers in national companies, which is the correct balance. Countries have to be economically open, they have to allow foreign investment without any doubt, but they have to complement it with a strong presence of national capital. For those of us who think that the state should have a self-limiting size in the economy, that source of capital must be eminently private. The development of economies based on state intervention, where the state puts all the resources in all the companies, is not valid for us.
The relationship between managers and owners, and in turn the intervention of asset managers and facility managers within the real estate sector, I think will follow a relatively natural evolution from the situation we already have today. I think there will continue to be managers who, for a fee, offer their management services to passive-type capital, for example funds that do not set up structures in the countries they invest in because they always have to travel light in case they have to leave the country again. They always introduce a certain factor of volatility in the economic communities they invest in. And then there will be companies with an industrial vocation that will opt for the opposite path, which will be to internalize as much as possible all the activities necessary to manage properties, whether at the asset management level, facility management level, etc. So you will continue to see both models, and they are perfectly valid and not antagonistic models. It simply depends on the type of capital that backs you: if it is fund-type capital or industrial capital with a vocation for permanence. The fund always has to rotate the assets it buys, and since it has to rotate them, it is not worth creating structures in the country. Industrial-type capital, its vocation is to stay forever, so it creates permanent structures, pardon the redundancy, in the countries where it operates.
It is very relevant for Spain and for any country in the world, as much as possible, to have what the Portuguese call a strategic decision center located in the country. Whether the capital that backs that strategic decision center is national or foreign is somewhat less relevant, I wouldn't say little relevant but somewhat less relevant, because a company backed, for example, by a listed company backed by foreign investors who invest and exit its capital recurrently, as long as the strategic decision center is in a country, a large part of the added value it extracts from its economic activity will stay in the country where it has the strategic decision center. What is more complicated is to lose those strategic decision centers and have them move abroad, which is something that Spain unfortunately has allowed to happen a lot in recent years, and that is not healthy. One thing happens, and as we commented before, Spain is a country that has little primitive accumulation of capital, there is little savings, and the savings that exist are not invested in a very sophisticated way because basically they are in bank deposits, which are much higher than the normal averages of other countries in the world, and in people's private housing. Using housing as a means of savings, I personally like it, I know there are people with the opposite opinion, but I think it is good because it helps protect the family against economic cycles. I think that is a very good thing. But having money exclusively in bank deposits, I think reflects a lack of financial sophistication, a result of no one having taken the trouble to introduce financial education in Spain's educational cycle. There should be modules of economic or financial education in practically every career, almost from primary school, basic concepts of financial education should be taught. It cannot be that an average person in Spain faces an insurance policy or a mobile phone contract as if it were some kind of arcane thing they cannot decipher. Everyone should have the necessary knowledge at least for the things they need in their life to get by. This is something I have always defended, but it doesn't seem to always fall on deaf ears, because that financial education is not always welcome by the public authorities, who sometimes prefer a population that is not so educated or has so much knowledge because it is more easily manageable.
I think the collaboration between real estate and the economic model is evident, because real estate, especially tertiary, is actually a provider of necessary infrastructure. From its position in the tertiary sector, it is a provider of necessary infrastructure for the primary and secondary sectors, the one that extracts resources from nature or the one that transforms them later, to have a place to locate. That is, when we build a shopping center, we allow commerce to exist inside the shopping center. When we make a logistics warehouse, we allow storage of materials or transit in many cases, in the case of cross-docking warehouses needed for online commerce or whatever. When we make offices, we give shelter to a series of companies so they can carry out their activity. And when we make data centers, we allow the digitalization of the world around us, of our society, to evolve, and companies can progress using, for example, artificial intelligence. So for me, the link between real estate and the economy is evident. The more modern the real estate sector of a country is, it is usually the direct symptom that the economy of that country is more modern. Therefore, our responsibility is to adapt the best global practices to ensure that at least the assets we make available to our clients are the best in the world, the best possible, so that they too can develop economic activities that are competitive and cutting-edge at a global level.
Merlin is indeed investing in Malaga and also in Valencia. That said, I think we have to be quite sensible regarding the possibilities of cities that are not Madrid and Barcelona. Spain is an economically quite irrelevant country in the world, it has a very small economic size, and therefore it doesn't allow for 10 relevant cities. It is already quite curious and peculiar that Spain has two, because in France there is only one. Germany, which is a country I love in that sense, has five. But with Spain's economic size, having two I think is already quite valuable. If we manage to develop poles of economic activity in Valencia and Malaga, and maybe in Bilbao, I think that would be very interesting, but we should not have great illusions, because we must know that for large poles of activity to develop, first we have to be a country that has some type of industrial or technological activity that is cutting-edge. Cities do not develop from nothing or by decision of the public administration, but because there is previously an activity that justifies many people gathering in the same place. So there is no choice but to first create economic activities so that later there are more important cities internationally.
This always brings the corollary of what happens with inland Spain, etc. Well, I come from there, from the emptied Spain as they say nowadays, so I know perfectly well the cost that entails: the depopulation of rural areas. We all throw our hands up about that depopulation, but few or none of us would want to go live in a depopulated area, because you don't have the same level of amenities as in large conurbations. So it is very difficult to have it both ways. I do think we should try to have a network of basic services that at least makes life easier for those people living in relatively depopulated areas. But to pretend to recover population again without creating economic activity is very difficult. Who would want to go to my land, to Extremadura, to do what? If I myself came to Madrid to study a degree, and the chances of having found a reasonable job at the level of what I have today in Extremadura would have been practically zero. So we cannot complain with crocodile tears. What we have to do is simply understand that when we all have an interrelation with those emptied or depopulated communities, we have to try to enrich them. Tourism cannot be extractive tourism. People think it is very ecological to go to a place with Quechua walking sticks and a sandwich wrapped in aluminum foil, but then they complain that these are depopulated areas with no future. The first one who has to give them a future is you, by using local resources, eating in local restaurants, buying local products. You have to try to generate wealth in the places you visit, not just be an extractive tourist who goes to see the Egyptian vulture and then goes back home in a camper van without having spent on a hotel, restaurants, local products, or anything. That is our obligation, those of us who live in more urban areas, towards the more depopulated areas.
I think Spain's role as a bridge with Latin America has grown significantly in recent years. First, because there has been a population shift, a series of, let's recognize it, economic elites from Latin American countries that have been sliding down the path of populism have come to live in Spain. And on the other hand, a displaced mass of talented labor resources, easy to integrate, with our same culture, our same love for family, in many cases our same religion, has also come to Spain. For Spain, I think this has been tremendously positive, because it is people who have greatly enriched the capabilities of our country. This has meant that, curiously, from not existing Madrid as a capital of relationship between one continent and another, between Europe and Latin America, it has become a quite interesting and quite referential city. Maybe we don't have the level of economic activity in Latin America that Miami has generated, but it is true that Miami, after a series of policies of the US administration, has been complicating the life of Latin American immigrants, and they have felt on some occasions not especially welcome, or in a certain way rejected in the United States, and that has generated this current of sympathy and migratory flow towards Spain. I think Spain has to continue deepening this, because in the end, the business opportunities for Spanish companies in Latin America are enormous. The opportunities for Latin American companies that establish a bridge office in Madrid to work in Europe as a local company of the European Union are also very important. And Madrid has to take advantage of that advantage that destiny has given it in a certain way, because it's not that we have done anything special to deserve it. It has been due to a series of degradations that a series of Latin American countries have suffered, and that coincidence has occurred.
