The distribution of Next Generation Funds in Catalonia: Key beneficiaries, strategic investments and the Openchip controversy 

The Next Generation EU funds, a significant part of the European Union's Recovery and Resilience Mechanism (MRR), are reshaping the economic landscape in Catalonia. These funds are aimed at fostering innovation, sustainable growth, and technological development, with a strong emphasis on achieving digital and green transitions. In February 2024, the Department of Economy of Catalonia, led by Natalia Mas, disclosed how these funds have been allocated through a new digital tool, highlighting the beneficiaries and the overall impact on the region. But the Openchip controversy was a stain, writes Alex Meadows. 

Major corporate beneficiaries: telecommunications and technology 

Leading the list of corporate beneficiaries is Adamo Telecom Iberia, which received an impressive €242 million. Adamo, a telecommunications company specialising in fibre optic installation in rural areas, has been pivotal in enhancing digital connectivity, particularly in underserved regions. The company is controlled by the Ardian private equity fund and has been at the forefront of expanding high-speed internet access across Spain. This investment aligns with the EU's goals of bridging the digital divide and ensuring that rural communities are not left behind in the digital revolution. 

Following closely is Openchip & Software Technologies, which secured €111 million. Openchip is a relatively young company, founded in 2021, that focuses on chip design—a critical area of technological innovation for Europe. The funds aim to bolster Europe's ambitions of technological sovereignty, particularly in semiconductor development. Openchip’s mission involves designing and developing next-generation accelerators and processors, especially for high-performance computing (HPC) and artificial intelligence (AI) applications. 

The automotive sector has also reaped substantial benefits from the Next Generation funds. Seat, a major player in the automotive industry, received €93 million to support its transition towards more sustainable and innovative manufacturing processes. Similarly, Telefónica, one of Spain’s telecommunications giants, was awarded €84 million, reflecting the company's ongoing contributions to advancing digital infrastructure. 

SMEs: the backbone of Catalonia's economy 

While large corporations have captured significant portions of the funds, small and medium-sized enterprises (SMEs) remain the backbone of the Catalan economy. Approximately 97% of the businesses benefiting from these funds are SMEs, which collectively received 56% of the total €2.748 billion allocated to the private sector. This focus on SMEs underscores the EU’s commitment to fostering grassroots innovation and ensuring that smaller businesses can compete in a rapidly evolving economic landscape. 

Public and research institutions: Catalonia’s centres of innovation 

Public institutions and research centres have also emerged as major beneficiaries of the Next Generation funds. Among these, the Barcelona Supercomputing Center (BSC) stands out, securing €100 million. The BSC is a renowned innovation hub and is home to one of Europe’s most powerful supercomputers, MareNostrum 5. The centre plays a pivotal role in advancing high-performance computing and has been integral to Europe’s push towards semiconductor independence. BSC’s involvement in the European Processor Initiative (EPI), which focuses on the development of RISC-V processors, is a testament to its leadership in cutting-edge research. 

Other notable public beneficiaries include the University of Barcelona, which received €77 million, and thePolytechnic University of Catalonia, awarded €55 million. These funds are crucial in supporting research, development, and innovation (RDI) activities that aim to propel Catalonia as a leader in the knowledge economy. 

Local government support: strengthening public services 

Local governments and public sector entities are also key recipients of Next Generation funds, with the Barcelona City Council receiving €223 million. These funds will be funnelled into various public projects aimed at improving infrastructure, enhancing public services, and fostering sustainable urban development. The Metropolitan Area of Barcelona, another significant beneficiary, was awarded €57 million, further demonstrating the EU's commitment to supporting urban and regional growth. 

These funds are expected to create numerous opportunities for public-private partnerships, ultimately benefiting Catalan society through the execution of community-interest projects. 

The Openchip controversy: public funds and executive appointments 

While the allocation of funds has largely been welcomed, some aspects have attracted scrutiny. One such instance is the €111 million granted to Openchip, which sparked controversy following the appointment of Therese Jamaa, the partner of Spain’s Foreign Minister, José Manuel Albares. Jamaa was hired as Vice President of Strategic Alliances at Openchip just a month after the company received the public funds.  

Furthermore, it is intriguing to note that Openchip is the only spin-off, and a fresh spin-off from the Barcelona Supercomputing Center, directed by Mateo Valero, to have obtained a European subsidy, despite BSC having around a dozen companies, many of which offer stronger guarantees of viability and expertise. Moreover, the company officially had only one employee and no revenue for two years. According to the company’s profile on LinkedIn, there are now about 50 employees, mostly working in Italy.  

Openchip defended Jamaa’s hiring, citing her extensive experience in the tech sector, which includes executive roles at Huawei, Vodafone, and Qualcomm. Despite the controversy, Openchip emphasized that Jamaa’s recruitment followed a rigorous selection process, independent of her relationship with Albares. The company, which is still in the early stages of its development, remains focused on R&D activities aimed at creating microprocessors that could revolutionise various industries, from personalized medicine to disaster detection. 

Additionally, Adolf Todó, a former executive from Catalunya Caixa, has joined Openchip’s board. Todó’s appointment also raised eyebrows given his controversial tenure at Catalunya Caixa, which required a €12 billion public bailout. Nevertheless, Openchip has stressed that these appointments are driven by the individuals’ professional credentials rather than political connections. This response does not dispel all the questions, given that the allocation of European public funds to such a young company is extremely uncommon, and the amount of €111 million is by far unprecedented. 

Catalonia’s future 

The distribution of Next Generation EU funds in Catalonia highlights the region’s potential as a hub for innovation, digital transformation, and sustainable development. These funds are driving technological advancements and economic recovery in the post-pandemic era. The focus on SMEs and research institutions underscores the inclusive approach that the EU is taking to ensure that all sectors of society can benefit from this historic financial injection. 

While controversies surrounding executive appointments at companies like Openchip remind us of the need for transparency in the allocation of public funds, the overall impact of these investments is expected to be transformative. With continued oversight and strategic planning, Catalonia is poised to emerge as a leader in innovation and technological development, setting an example for other regions across Europe. 

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