From tech talent to island startups: the growing wave of innovation in the Canary Islands

In the waters surrounding the island of La Palma, aquatic life continues among tonnes of lava more than a month after the Cumbre Vieja volcano started erupting and began to destroy homes, plantations and infrastructure. This has been shown by the first underwater images of the lava delta, filmed by an ROV (remotely operated vehicle) and 360° cameras. The University of Las Palmas de Gran Canaria (ULPGC) requested help with the filming from the environmental and oceanographic consultancy firm ECOS. “We supplied the technical equipment and the specialised personnel altruistically”, explains its director, Manuel Ruiz. Thanks to their work, scientists managing the crisis have analysed “the ability of the fauna to return to the area, the water quality and the type of lava,” details the marine biologist.

The work of this small tech company is proof of both solidarity with the La Palma disaster and the innovative potential of the Canary Islands, as well as the importance of technology and innovation. “We may be Europe’s best kept secret in entrepreneurship. We are a long way from regions like Madrid, Barcelona and the Basque Country, and we have to play a different game with what we can offer”, says Carlos Navarro, Director of the Canary Islands Agency for Research, Innovation and the Information Society (ACIISI).

Its island character, volcanic origins and stable climate are some of the hallmarks of an Autonomous Community where just over two million people live. It is extremely dependent on tourism, with more than 13 million foreign visitors in 2019. Following the blow of the pandemic and now the volcano, Navarro points to the need to “diversify the economic model” of the islands, for example through innovation.

Support to put the wind in their sails

Universities like the ULPGC, the Canary Islands Astrophysics Institute, the Technological Institute of the Canary Islands and the Canary Islands Network of Technology Parks are some of the centres where the archipelago’s tech professionals train and work. “There is a lot of talent in the Canary Islands, but the challenge is to retain it”, says Managing Director of the Emerge Association, Moisés Santana. Promoted by technology-based startups that wish to “translate R&D into innovative economic activity,” this association works to “give visibility to entrepreneurs,” to provide them with resources such as access to investors or workspaces, and to collaborate with the institutions. It also considers it a priority “to establish networks of entrepreneurship, innovation, science and technology with African nations”.

The public administrations promote entrepreneurs through the Canary Islands Network of Innovation and Business Development Centres, the tax benefits of the Canary Islands Special Area, with a 4% corporation tax rate, and the recent initiative Canary Islands Land of Digital Entrepreneurs, which according to Navarro has been designed “to position the islands in an international context and boost sustainable growth with three key characteristics: connectivity, competitiveness and training”. In addition to this, there is investment support from public companies such as Sodecan; private ones like the Archipélago Next investment fund; and mixed public-private initiatives, such as the Why Tenerife network, aimed at attracting investors.

Despite this extensive network of collaborators, the ecosystem, which is made up of some one hundred startups according to Startup Blink, still lacks maturity, cohesion and momentum. “It has to grow and accelerate; the innovative culture in the business fabric needs bedding in,” notes Navarro. The MD of Emerge adds: “We are an ecosystem that is split across eight islands and articulating it is a little more tricky, but it is no less vibrant because of that.”

From marine technology to fintech

Although there are not yet any tales of remarkable exits (divestment of a company by sale or listing on the stock exchange), there are successful startups in the Canary Islands. These include Wooptix, a spin-off of the University of La Laguna that came about thanks to its founders’ experience in astrophysics and specialises in image technologies, which has received investment from Intel, and AdQuiver, a madtech agency specialising in tourism that raised over €500,000 in its first round of financing.

ECOS – mentioned earlier in this article – and robotic solutions company Subsea Mechatronics are examples of entrepreneurship in the so-called blue economy, which aims to turn the seas into drivers of sustainable development. In fact, the Canary Islands Ocean Platform is committed to offshore wind energy and port innovation projects. “The Canary Islands are a natural oasis that offers the possibility of developing technological products to tackle environmental challenges”, Santana says. The archipelago also wants to host microchip manufacturing centres to take advantage of the existence of rare earths.

Fintech innovation has less of a presence, but there are examples such as eSignus, which has created HASHWallet, a device for storing private keys in blockchain environments, with a format similar to a credit card. “It has an integral fingerprint reader to increase security and an electronic ink screen to verify transactions”, explains eSignus co-founder Daniel Hernández.

Last year the startup, which has raised €800,000 in funding, won an award for entrepreneurial projects conferred by the Spanish National Institute of Cybersecurity (INCIBE), and it is taking part in their international acceleration programme. Its suppliers and customers are mostly in other countries, but its founders decided to base the business where they lived. “We thought about creating part of the company in the Canary Islands and basing the headquarters in Switzerland’s Crypto Valley, but because of the pandemic we weren’t able to do that”, explains Hernández. A year later, he acknowledges that he has found no limitations to the company’s growth, and its team of 12 works remotely from different countries: “Changing behaviours have removed the barriers to acquiring international talent”.

Sun and nature for digital nomads

As well as startups and the support infrastructure, another fundamental aspect that brings dynamism to the Canary Islands ecosystem are the many tech professionals who work remotely from there. Air connections with much of the globe (Tenerife will soon have a direct flight to New York), pleasant temperatures and their natural landscapes make the archipelago one of the most attractive destinations for digital nomads, according to NomadList. In addition, the autonomous government has announced a plan to attract 30,000 remote professionals over the next five years.

“The Canary Islands are an ideal place for water sports such as surfing, kitesurfing and diving. Here I have the opportunity to do something active before I start working”, says WhatsApp software developer, Santiago Pina, speaking from Fuerteventura. After working in Silicon Valley and travelling around different regions this past year, the native of Murcia plans to spend some time on the island, where he has met digital nomads with different profiles, “from marketing, design and programming to DJs and yoga teachers”.

The islands can also be a good meeting place for managers of companies that operate with geographically dispersed teams to take a few days to strengthen relationships. This is the belief of Carlos Kuchkovsky, co-founder of Remotefulness, a startup that organises company retreats: “We organise the itinerary to build ties, acquire new knowledge and skills and help people to face challenges with a focus on sustainable transformation”. In fact, Remotefulness “minimises and offsets the impact generated” by its activities, which are often carried out in natural settings. “With the momentum generated by the institutions and the growing ecosystem of companies and entrepreneurs, the Canary Islands can become a hub of international digital talent like no other in Spain or Europe”, claims Kuchkovsky.

Hope for the future

For the moment, the archipelago is at breaking point with the situation on La Palma, and innovation will play an important role in its recovery. Navarro says that they are already thinking about how to “build houses that are sustainable and safe”, continuing with the plan to create a tech park on the island and encouraging innovative entrepreneurship. “We have to move from traditional businesses to more sophisticated ones, and it’s going to be a challenge,” notes the director of ACIISI, although he believes that the actions will be carried out “with respect and consensus with the people who have lost everything.”

“We must try to see the volcano, which is a genuine tragedy in human terms, as an opportunity to show that the Canary Islands is pure nature, a living, young, forward-looking territory,” concludes Santana. Research efforts, the work of entrepreneurs, the presence of international talent and the natural environment itself are forging the way to hope in the Canary Islands.