For decades, Spanish companies have looked to Latin America as their natural territory for international expansion. They still do, and the presence of companies in all the major countries of the region is very important. At the same time, however, they have become increasingly daring to enter the largest American market: the United States. The businessmen present at the event Latin America, the United States and Spain in the global economy, Organized this Tuesday in New York by EL PAÍS and the Spain-United States Chamber of Commerce, they made this clear once again, while expressing their commitment to technology and digitalization.
The CEO of ACS, Juan Santamaría; the CEO of Avangrid, the US subsidiary of Iberdrola, Pedro Azagra; and the President of Indra, Marc Murtra, reaffirmed their companies’ commitment to investing in the United States. They have strengthened their presence in the country in recent years and plan to continue doing so, as they explained at the forum, sponsored by DLA Piper, Iberia, Inditex, Indra, NTT Data and Total Protect in collaboration with the Organization of Ibero-American States (OEI).
“I am often asked how to do business in the United States,” Azagra said. “And the first thing you need to do is be local. But becoming local means you need to understand all the parties involved,” he explained. In his case, as a large energy company, it is essential to build ties with local communities, with authorities, regulators, customers, suppliers and other stakeholders, which is part of the daily work of company managers, he explained. He gave as an example the need to know how to communicate the content of the electricity bill to avoid blaming the company for rate increases that are not really its responsibility.
Azagra highlighted the huge investments that the Iberdrola group, chaired by Ignacio Sánchez Galán, plans to undertake in the United States in the coming years as part of the energy transition, which he estimated at 30 billion dollars by 2020. “It is a huge market. The figures here are always in the billions, not in the hundreds,” he said.
The Spanish executive recalled that the Iberdrola group made its first acquisition in the United States 20 years ago and how it has learned from each new operation. In a highly regulated sector, Azagra stressed that it is not a single market, given the significant state powers in the matter: “I think that if we think about the United States and the coming years, from the energy point of view, it is not a single country, but many countries together, many states, regions and activities regulated by each state,” he indicated.
The importance and difficulty of the permitting process and the interference of litigation are two of the characteristics he highlighted in the US market, but he assured that progress is being made in both, partly due to recent legal reforms: “I think the important thing is how they are reducing the timeframes.” Azagra also stressed the need for predictable long-term regulation to undertake the huge investments in the renovation of infrastructures that, in many cases, are obsolete. And how some investments and others condition each other: “We cannot do renewables without networks, nor networks without renewables. They have to go together,” he said.
The importance of digital
The future, at least when it comes to infrastructure, lies in the digital world: data management, high technology, artificial intelligence. And when it comes to data management, it can be summed up in four words: digitalisation, demographics, decarbonisation and deglobalisation, according to Juan Santamaría, CEO of infrastructure giant ACS. “These are the four Ds that will guide the future in the United States and elsewhere.”
“Change is the new normal,” said Santamaría, who analysed megatrends in the sector. Megatrends that point to an explosion in data traffic, where terabyte storage centres will need to increase their capacity from the current 30 billion gigabytes to 85 by 2030. “That is 75% of global demand, in the United States alone,” he stressed.
Added to this is the fact that by 2050, it is estimated that two out of three Americans will live in urban areas. And by the end of the century, 30% of Americans will be over 65 years old. “This is going to bring about changes in mobility,” said Santamaría. As regards the onshoringthe return of business operations to their countries of origin, areas such as semiconductors, critical metals, electric vehicles, and everything related to Defense will be fundamental.
In the coming years, the growth of electric vehicles will most likely add 15% demand to the needs of the electrical networks; batteries will add 35%, explained the CEO of ACS at the forum. For Santamaría, infrastructure, advanced technology and energy companies will always be at the forefront. “All infrastructure will have to prepare for what is happening,” the changes to come, he predicts. In the area of data centers alone, an investment of one trillion dollars is needed; for electric battery factories, around 300 billion; in semiconductors, 65 billion. ACS, he points out, is present in most of these types of projects in the United States “so we cannot be anything but optimistic about the short-term future.”
All this without abandoning traditional infrastructures – airports, roads, highways – which will continue to grow at around 3% annually, both due to the need for maintenance and the need to expand existing networks. “Today there are close to 25 billion dollars on the waiting list for investments in different states that will be financed by private investments in traditional infrastructure.”
ACS has the United States as its investment core, with a presence in most states and an average of twenty offices per state, and the control of subsidiaries such as the construction company Turner. The group has investments in data centers, semiconductors or batteries, to respond to the megatrends of the future.
“All of this comes from the need to respond to the infrastructure needs that exist.” “All projects today have a component of advanced technology, artificial intelligence, fiber optics, civil engineering and a very challenging integration of many of these elements.” Therefore, a company that can offer multiple services and has experience in all of them is very well positioned, explains Santamaría.
Indra’s president, Marc Murtra, explained that international uncertainty also leaves certainties. Among them, he highlighted the need for strategic autonomy and the importance of technology. “The future is technological,” he proclaimed, reflecting in particular on artificial intelligence, something “absolutely transformative,” he said. “It is a phenomenon that I would describe as entirely American. The entire value chain from capital, entrepreneurs, businessmen, strategists, universities, experiments, everything is much more advanced in the United States than in Europe, Russia or China. “At Indra, we are betting heavily on artificial intelligence and it is already a tool that we use everywhere,” he said.
Murtra said that “first we have to develop artificial intelligence and then we have to legislate it with caution.” “Artificial intelligence is toothpaste that has come out of the tube and we can no longer put it back in,” he said, warning of regulatory excesses, especially in Europe. “We run the risk of generating the stereotype that in the United States there is a lot of artificial intelligence and little legislation, and in Europe there is a lot of legislation and little artificial intelligence.”
EDP has followed the same path as some of the Spanish giants. “We started as a Portuguese company focused on utilitiesand 25 years ago we started a process of internationalization, first in Brazil, Spain, and now in 2007 we arrived in the United States when people were just beginning to talk about energy transition (…) Talking about alternative energy sources should not be new but the norm. The truth is that what was once just a niche has now become dominant,” said Miguel Stilwell de Andrade, CEO of EDP (Energias de Portugal), a company present in 29 countries and that generates 98% of all its energy through renewable sources. Its objective, he said, is to reach 100% by 2030.
To this end, and to combat climate change at a global level, Stilwell has stressed that the debate over the last two decades has taken giant steps. Now there is no longer any discussion about the competitiveness or viability of renewable energies, because that is a discussion that has already been overcome. Now, the focus on greener energies must be placed on overcoming the reluctance and opposition of certain sectors resulting from polarisation and political opposition. The businessman has mentioned the example of Germany, where through the creation of the “primary public interest”, which prevails over any private interest, environmental decisions are protected.
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