CIEM Wealth Generation Report by CIEM Zaragoza

Wealth Generation Report Digital Mile Business Incubator Centre

init Corp www.theinit.com CIEM www.ciemzaragoza.es Milla Digital www.milladigital.es Design & layout: Init Communication Department Printing: ARPIrelieve | www.arpirelieve.com

Contents Foreword by Ricardo Cavero

Foreword by JosĂŠ Antonio SĂĄez de Ocariz

Introduction

Why and What For the Report on Wealth Generation

Why a CIEM Report on Wealth Generation

What for a CIEM Report on Wealth Generation

What is its value?

Executive Summary

Companies have a better performance in its initial stages being at CIEM

The role of CIEM in the society

Methodology, scope and limits

Economic Sustainability Indicators

1 Stock variables. Balance sheet

1.1 Indicator: capital assets.

1.2 Indicator: share capital.

1.3 Indicator: evolution of assets / equity.

1.4 Indicator: debt quality.

1.5. Indicator: solvency ratio.

1.6. Indicator: current liquidity ratio.

1.7. Indicator: subsidies.

2. Variable flow. Losses and earnings.

2.1. Indicator: total turnover 2012.

2.2. Indicator: gross profit.

2.3. Corporate income tax estimation

2.4. Indicator: net exports.

2.5. Indicator: economic profitability.

2.6. Indicator: financial profitability.

2.7. Indicator: supplies and suppliers.

2.8. Indicator: supplies, total expenditure.

2.9. Indicator: cost of personnel.

2.10 Indicator: V.A.T. Liquidation results

2.11. Average tax estimation

3. Survival of companies hosted at CIEM

CIEM Wealth Generation Report

3.1. Survival ratio of companies hosted at CIEM 4. Variables related to customers.

30 31

4.1. Indicator: new clients from the start

4.2. Indicator: permanent clients.

Social Sustainability Indicators

1. Indicator: structural jobs offered by companies

2. Indicator: men / women distribution.

3. Indicator: recruitment

4. Indicator: internships.

5. Indicator: agreements signed with training entities

6. Indicator: investment in training.

Business collaboration and cooperation indicators

1. Indicator: projects undertaken jointly with other members of CIEM community

2. Indicator: development of open code products / copyleft

3. Indicator: patents/registers of intellectual property

Environmental sustainability indicators

1. Indicator: changes in their relationship with suppliers pages

2. Indicator: changes in their professional performance

3. Indicator: changes in their relation with clients

4. Indicator: environmental certificates

Table of ratios

ECONOMIC SUSTAINABILITY INDICATORS

SOCIAL SUSTAINABILITY INDICATORS

BUSINESS COLLABORATION AND COOPERATION INDICATORS

ENVIRONMENTAL SUSTAINABILITY INDICATORS

Conclusion

Economic sustainability

Social sustainability

Environmental sustainability

From a competition culture to a business collaboration culture

Opinions from Entrepreneurs

CIEM Wealth Generation Report

Foreword by Ricardo Cavero Two years have passed from the launching of the Digital Mile Business Incubator Centre, an initiative implemented with the 2010 local investment fund. This has been an important challenge in many aspects, from a sustainable design and construction in a very short time up to the development of a new model of local management and an innovative municipal programme of activities. CIEM (Digital Mile Business Incubator Centre) was born from the vision that the City Council is not only a key actor for the development of municipal economic promotion policies for the city in areas as tourism, culture or public works and infrastructures, but also it facilitates and stimulates connections between different city's networks of talent and creativity given its broad knowledge of the territorial and social reality of the city. It seems also unlikely that, in the next years, the development of the business network related to research and innovation would come from multinational companies to be settle in Zaragoza. On the contrary, the development of these opportunities will be carried out by SME's and micro-SME's and by existing industries, training centres and knowledge campuses. As a result, there is an urgent need to foster a culture of entrepreneurship, especially in fields related to value added activities, and also to facilitate from city's governments the necessary mechanisms for making the best conditions available On the other hand, CIEM has also made it possible to test mechanisms of public-private partnership going beyond a simple contractual relationship between the administration and a company. These agreements have resulted in a greater involvement of specialized capabilities of the private sector in strategic projects fostered by the public sphere and therefore, in a higher benefit for all. The economic indicators report is also a novelty and outstanding document in our country. In addition to the concrete results obtained, it will represent for years to come, a valuable source of information to estimate the real effect to be achieved by fostering entrepreneurial activities and therefore,to plan our actions accordingly. And last but not least, it will allow us to establish a transparent mechanism of information and citizens' control on the goal and expenditure of public resources.

Ricardo Cavero is Director-General for Science and Technology at the City Council of Zaragoza

CIEM Wealth Generation Report

Foreword by José Antonio Sáez de Ocariz Init is a business project fostered by a team of young entrepreneurs focusing on boosting and developing new business initiatives in new opportunity sectors facilitating not only the launching of these companies, but also the creation of a framework and an environment for cooperation between them, making possible their sustainable development in the longterm. Thus, since Init has started its activities with a business incubation for entrepreneur’s projects, it has contributed to the creation of many successful business initiatives. We are convinced that, despite the current complex economic situation, job creation (and what it implies in terms of personal, economic and social development) to a great extent will come from the creation of new innovative business initiatives rooted in our territory, driven by teams of entrepreneurial people and addressed to new sectors of activity. Therefore, an intense public-private partnership is needed, since the challenge of job creation and the generation and distribution of wealth is a challenge shared by all of us. Our commitment and will is to support individual and teams of entrepreneurs in the development of innovative and vision business projects, creating the conditions for them to be successful. More than three years ago init has decided to take one more step and to open our already successful model of business incubation projects to the society and create, based on our own entrepreneurial experience, a model of innovation and entrepreneurship to be developed in collaboration and cooperation with other public and private agents. Thus, we started our collaboration with public and private institutions, managing and exploiting centres of innovation and entrepreneurship in different cities. In particular, we have had the opportunity to start a successful experience of public-private partnership with the City Council of Zaragoza, taking the responsibility of the management and exploitation of Digital Mile Business Incubator Centre. This first Wealth Generation report of the Digital Mile Business Incubator Centre that we are presenting now is the tangible example that supporting dreams and passions of people and teams with an entrepreneurial vocation is a worthwhile investment for the city and for the society as a whole given the impact that these dreams turned into innovative business initiatives have in the human, economic and social development of the city and in its territory.

José Antonio Sáez de Ocariz, Init CEO

CIEM Wealth Generation Report

Introduction When we have decided to draw up this Wealth Generation Report of the Digital Mile Business Incubation Centre we had a clear idea about the objective. From the very beginning, in the year 2007, Init has always had the intuition that our own business incubator or the incubators that we managed in collaboration with other partners, were a genuine public service or, in other words, a service to our community, to the city and to the citizens. This report is a clear demonstration of this. CIEM, as well as the rest of the centres that we are managing in Spain, not only provides for a powerful business acceleration process but also facilitates cooperation with entrepreneurship initiatives hosted at CIEM with a potential to grow and develop into a businesses, but also generates wealth in the city by creating a stronger and more consistent urban network and social community. And this is our main goal to start this adventure of managing a centre of innovation and entrepreneurship such as CIEM. We have done this way together with the Digital Mile from the City Council of Zaragoza, which from the very beginning has shared this vision to consider CIEM as a public service and not only as a support to growth and development of business initiatives. The City Council of Zaragoza has decided that all information contained in this report will be included in the Zaragoza Open Data, reinforcing its value. We are therefore, in front of a unique innovative initiative, unique in Spain, where public-private partnership can show its huge potential in developing initiatives never seen before in the framework of entrepreneurship, such as the value that a business incubation centre adds to a city. Without any doubt, this innovative practice demonstrates that there are still many things to say and write in the entrepreneurship' world, and that both Init and the City Council of Zaragoza are ready to continue this collaboration in the framework of CIEM.

CIEM Wealth Generation Report

Why and What For a Wealth Generation Report Usually, the question of why things happen takes us back to the past in search of the causes. Nevertheless, the question on what for, takes us to the future in search of the reasons that can support us in the development of a present or future action. CIEM Wealth Generation Report has its why and its what for. To explicit both surely will help us to understand the value of this report and its innovative and useful character.

Why a CIEM Wealth Generation Report Init has been managing CIEM since two years ago. During these two years we have discovered several causes that have forced us to explain to the society of Zaragoza and to its business network the collective value produced and developed at CIEM project. 1. Without any doubt, the value produced at CIEM goes beyond the business or the entrepreneurial growth of its projects and people working in it. Hundreds of people that have visited CIEM along these two years prove this, since they have valued much more the CIEM' experience than the type of businesses hosted there. 2. As public-private partnership we would like to highlight the public origin of CIEM considering it as a return to the citizens of the investment made by the City Council of Zaragoza in the entrepreneurship. 3. Every day life of CIEM community not only shows that the value produced by each company and individual hosted at CIEM goes much beyond their own business perspective, but also generating changes in customers and suppliers, producing a growth not only in their balance sheets. 4. And finally, the culture of CIEM on social and environmental sustainability was producing changes that there were necessary to highlight and make them tangible and essential to our organisations and society.

CIEM Wealth Generation Report

What For a CIEM Wealth Generation Report There are several reasons that make it necessary to develop this report as a valuable document now and as a reference document for the future. 1. It is an innovative experience that stresses the value of a public-prived partnership in managing innovation and entrepreneurship centres. There are still arguments about whether the public administration must support this kind of initiatives. The evidence is that, when publicprivate collaboration works correctly, the results, as it has been explained before, go beyond the scope of the business project, having an impact on local society. This report shows such impact and justifies, in a way that nobody had done before, the need and convenience of this collaboration where the company managing a business incubation centre puts all its know-how for boosting business projects, but at the same time without neglecting its public service vocation. The managing company is in charge not only of CIEM results, but also of the genuine impact that these results produce to the local society by generating economic, social and environmental values. 2. This report should become a model to be adopted in other entrepreneurial spheres of the country, since the firms that manage these centres have a public component. The contract that Init has signed with the City Council of Zaragoza following a public tender, not only represents a zero cost for City Council of Zaragoza, but also provides the service that generates wealth and strengthen the society. 3. This report is a practice of transparency in line with the transparent public policy of the City Council of Zaragoza. The way it was developed has never been done before neither in Zaragoza nor in Spain. There is also a revert element on the generated value. We are aware that as a company that is managing CIEM we have a huge responsibility in its management, but assuming the vocation and efforts it implies, this responsibility has become an opportunity. This is an opportunity to return to the society of Zaragoza all the value that its own entrepreneurs have developed along two years life at CIEM. Much has been created, there has been a lot of work and we must return to the society of Zaragoza, the results and value developed by CIEM and its more than 100 individuals and companies. Namely, it is the devolution that the entrepreneurs and citizens of Zaragoza make to their city.

CIEM Wealth Generation Report

What is its value CIEM is a project of the City Council of Zaragoza managed by init. The objective of

the City

Council of Zaragoza was to develop a space for entrepreneurship and innovation in the area around the Digital Mile being as a landmark of what Digital Mile was supposed to be for the city of Zaragoza. In this context, init has developed a project for CIEM based on the following proposals: 1. Development of its own boosting process based on the entrepreneurial experience of init that has become a reference in Spain as a model for boosting businesses. This process takes place under the label "broaden knowledge to accelerate projects", being divided in three stages: Personal Diagnosis, Organizational Fitness and Business acceleration. 2. The CIEM project has two objectives underlined in the Center's daily work:

a. Change from a business culture exclusively oriented towards competition into a

business culture fostering collaboration and cooperation to broaden value proposals and therefore, improve competition.

b. Foster the development of business projects located at CIEM in terms of social,

economic and environmental sustainability. 3. The expected result is to promote new business initiatives and to support the generation of value from the projects currently hosted at CIEM by means of generating an ecosystem of entrepeneurship where people from different fields can work together in order to develop proposals oriented to innovation, creativity and entrenepeurship (intra-entrepreneurship).

Report made by init team at CIEM: Alfredo Elías Recalde Adviser Laura Garayalde Moyano Community Manager Joaquín Rivera Sahún Maintenance specialist (City Council of Zaragoza)

Julia Julve Obón CIEM Coordinator Project Manager

CIEM Wealth Generation Report

Executive Summary CIEM Report on Wealth Generation is an innovative experience developed by init in collaboration with the City Council of Zaragoza, that highlights for the first time in Spain, how an innovation business and entrepreneurship center, besides to contribute to the development of businesses from entrepreneurs's ideas, it roots the wealth generated in the city where the Centre is established. The Report covers the economic, social and environmental twists and turns of the wealth produced, tuckling the sustainability impact of the Centre from its social, economic and environmental dimension sas well as its impact on the business culture of the city of Zaragoza.

Companies have better performance in their initial stages when they are hosted at CIEM Companies hosted at CIEM show important growth indexes, both in terms of capitalisation (average equity 2011/2012: 79,854/140,319 euros, an increase of 75.7%) as well as of activity (23 respondents attended 376 clients in a year, in other words a new client every 18.6 days every one) and of relative results (an average financial profitability of 0.34. This ratio would be meaningless due to the short life of companies), and absolute results (average profit â&#x201A;Ź 38,495 in 2012, and average annual turnover 114,588 euros). On the other hand, there is a limited risk with solvent firms (average solvency ratio 2.38) with great ability to pay (average general liquidity ratio 3.15). This is due to the highly qualified intensive workforce doing activities developed at CIEM. In other words, companies base their business in generating value and constant innovation. In return, company safety is due to a conservative management. It can be more attractive the use of high levels of liquidity to make the initiatives more profitable or to diversify them somewhat.

The role of CIEM in society In terms of economic reversal, the results are also astonishining. Companies at CIEM contribute with an important tax burden (Average data per company hosted at CIEM: average corporate tax 9,623 euro, average V.A.T. 52,318 euro, average contribution by the company on personnel' expenditures 22,195 euro), and companies at CIEM show social responsibility in front of the productive workforce (staff growth of 56% on an inter-annual basis). This shows a high commitment with society, validated by its contracting profile: Companies hosted at CIEM tend to increase the number of suppliers (diversification of suppliers) at the same time as their size increases, instead of increasing turnovers with every supplier (+74% Aragon suppliers on inter-annual variation). In addition, CIEM has also created a culture of cooperation and business collaboration that has lead to the creation of collaboration projects (26) among companies hosted at CIEM, generating an CIEM Wealth Generation Report

internal activity (13), but, the most important, generating an economic activity of real collaboration to meet the needs of the society (13 collaboration projects with clients outside CIEM). We have also achieved an export culture, opening new markets in times of crisis (36% of companies hosted at CIEM export).

Methodology, scope and limitations The process for the development of the information document followed this order: decision on the variables to be studied, data input, management and statistical use, preparation and presentation. The decision-making process on the variables to study was subject to the initial objectives of the document, to the explanatory capacity of the variables and the quality of the information available. In this sense, several variables were determined in order to explain the economic, social and environmental quality of the companies. Within the first category, we looked after descriptive variables in terms of stock, flow and ratios. We have tended to incorporate information on social distribution terms. In terms of social indicators, the goal is to describe the ability of the company to integrate the value generated in the society where the firm is located. It also includes evidence on the cultural profile of the company in terms of innovation capacity, or interactions with the whole CIEM community. Meanwhile, environmental variables seek to describe the efforts of entrepreneurs to absorb any negative environmental impact that their activity can produce as well as carry out good practices within their value chain, both towards customers and suppliers. The data capture was performed using an open questionnaire given to entrepreneurs who responded without restriction to questions about their projects. In these terms, the team that was drafting the document editor disclaims responsibility for the accuracy of the data presented by entrepreneurs. The values were not contrasted due to the trust relationship with the companies we worked with. For sorting the information, we have applied methods to facilitate its readability and to provide legibility and the descriptive capacity of indicators. Many of them lack of enough sampling volume due to the impossibility of capturing certain information of some companies. Many of them did not exist in the year t-1 (2011) in order to be contrasted with the year t0 (2012). Therefore, in some indicators there were considered average quantities in t-1 and t0 of the total of companies present in each year, for the benefit of the sampling volume. In other indicators we chose to eliminate all observations with irregularities in any of these years, so that only considered those who offered annual accounts 2011 and 2012. In these cases, priority was given to the information made it available by evolution. It is important to consider this limitation in every variable individually. Every indicator includes the number of observations taken into consideration and a short description. As far as statistical exploitation is concerned, we have searched for descriptive indicators without taking into account inferential statistics. However, the reader must be cautious when interpreting some of these data, framing them in the activities and scenario of the survey. Some data such as CIEM Wealth Generation Report

economic or financial profitability are very high. These indicators have its calculation formula in every section. All companies hosted at CIEM have intense and highly qualified manpower. This produces high value added due to high investment in training and in salaries. The data is obtained from the balances belonging to the General Accounting Plan (PGC) in force. As far as limitations are concerned, the incorporation of data from independent professionals have been limited since the data on self-employment is not published in the Commercial Register and it is not public. Thus, we have incorporated as many professional as we could. Finally, the scope of this work is only descriptive and is up to the reader to make extrapolations and quantitative conclusions. As far as comparison is concerned, we appeal one more time to the judgment of the reader for the scrutiny of the information, but always considering the quantity and quality of every indicator. External comparison depends on the strict criteria and interpretation of the reader and of his/her experience. Therefore, the objective of this report is not so much to obtain an overall calculation of generated wealth, but to make an extrapolation in function of the average of all indicators analysed in a such a way that we can obtain a global and general vision of the Value or Wealth produced at CIEM along this period of time. These data, more than for its accuracy, serve us as a trend and as an average that approach us to the real Wealth produced.

CIEM Wealth Generation Report

Economic Sustainability Indicators 1 Stock variables. Balance sheet. 1.1 Indicator: Capital assets.

Calculation: Average total assets. Equal to liabilities plus net asset value (N.A.V.) Observation: direct observation of the companies' balance sheet. Year 2012. Number of measurements: 13 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The capital assets of the companies refers to the quantity of resources in euros used for its daily activity. The capital assets are financed by equity and other resources and indicates the total capital needed to develop the industrial activity. Total capital assets, 13 companies: â&#x201A;Ź 1,754,262.76 Average capital assets: â&#x201A;Ź 134,943.29 Extrapolation, capital assets (21 companies hosted at CIEM): â&#x201A;Ź 2,833,809.09 This indicator lacks a net or comparative relationship to provide information. Even so, it is included in this document in order to be used by any one. At the same time, it is important to say that the average capital assets is, in theoretical terms, the value of all assets of a company (whichever its source of financing, own or external). On the other hand, this is an interesting information to establish subsequent ratios.

CIEM Wealth Generation Report

1.2 Indicator: Share capital.

Calculation: Not required. Observation: direct observation of companies' balance sheet. Number of measurements: 13 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The share capital of these companies shows the initial investment made by the partners. Total of share capital, 14 companies: € 217,898.00 Average share capital: € 15,564.14 Extrapolation, share capital (21 companies) at CIEM: € 326,846.94 The average amount per company, well above of 3,000 €, which is theminimum requested to establish a limited liability company, shows a high degree of commitment by the management of companies hosted at CIEM. It also offers warranties to financial institutions, improving the situation of companies facing possible debts (see "Debt Quality"). It is important to take into account that such companies are launched by entrepreneurs without external financial aid. In this regard, companies hosted at CIEM have invested well above the average amount of the companies in the province of Zaragoza, 15,564.14 € compared to 11,664.43 € (http://www.ine.es/ daco/daco42/daco424/smpro0213.pdf) 1.

Furthermore, extrapolating the 21 companies hosted at CIEM, the total investment has reached the amount of € 326,846, which is an important figure. This extrapolation is not very speculative since companies that have not been taken into account, apart from the14 companies surveyed, are part of intra-entrepreneurships of mature and already established companies, which it is supposed they have a greater investment.

1 Data from the Spanish Statistical Office, February 2013 CIEM Wealth Generation Report

1.3 Indicator: Evolution of assets / equity.

Calculation: percentage evolution of company equity between 2011 and 2012. Observation: direct observation from companies' balance sheet. Number of measurements: 7 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. It is important to clarify that the survey includes 7 companies, those existing in 2011 and continue to be in CIEM after the closing date in 2012. We are not searching average data from every year in order to avoid distortion on the evolution of assets and equity (to avoid the problem of aggregate data and therefore, consider all possible data from every year). Summary: Equity indicates the resources supplied by partners plus the results accumulated and not shared. It represents the quantity of assets financed by partners and not by another sources. Total equity 2011, 7 companies: € 558,997.97 Average equity 2011, 7 companies: € 79,854.00 Total equity 2012, 7 companies: € 982,238.46 Average equity 2012, 7 companies: € 140,319.78 2 Increase of average equity 2011-2012: € 60,465.78 (+75.72%) Extrapolation, total equity at CIEM, 2012 (21 companies): € 2,946,715.38 The results on equities can be interpreted from different perspectives, but all of them positives. An average equity per company of € 140,319.78 shows the excellent shape for entrepreneurship recently created. On the other hand, in comparison with average investments (€ 15,564.14), it can be observed a positive impact. When comparing it to average capital assets (€ 227,953.69 for the same number of companies of this indicator), it can be observed a remarkable economic health, with an estimated debt ratio of 38.4%.

2 Average equity in 2012 is even bigger than average capital assets for the same period of time. This is due to the calculation of the average capital assets, which includes companies established in 2012, whereas in the calculation of average equity it is only included companies already established in 2011, following two years of experience and a proven success. CIEM Wealth Generation Report

Finally, the most important ratio is the increasing of average equity, reaching an overall increase of 75.72% with aggregated figures of circa one million euros between the seven companies studied as well as nearly 3 million euro when extrapolating to the 21 companies hosted at CIEM.

1.4 Indicator: Debt quality.

Calculation: debt quality = current liabilities / (current liabilities + long-term liabilities) Observation: direct observation of companies' balance sheet in the year 2012. Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The quality of the companies's debt shows the percentage of short-term debt over the total debt. In other words, the debt to be returned in a year on the total debt. This ratio indicates the health of the loans received. Total liabilities, 14 companies: € 270,172.36 Average liabilities, 14 companies: € 19,298.03 Total non-current liabilities, 14 companies (total liabilities): € 467,385.37 (€ 737,557.73) Average non-current liabilities (average total liabilities): € 33,384.67 (€ 52,682.70) Debt quality ratio: 0.37 The debt quality ratio implies that only 37% of the total debt has to be returned within a year, the (63%) is a long-term debt. This information is perfectly coherent with the figures of share capital and equities from companies hosted at CIEM. Due to low levels of share capital and results generating growth in equities, companies invoke to structural financing to tackle with investments, whereas short-term financing is used for cyclical payments and daily operations. Taking into account investments and net assets, distribution of capital and the relationship between liabilities and net assets, it appears that this composition of financing shows companies not only with large financial bellows and growth potential and elasticity, but also offer information from the management capacity of entrepreneurs.

CIEM Wealth Generation Report

1.5. Indicator: Solvency rate.

Calculation: solvency rate = total assets / (current liabilities + long-term liabilities) Observation: direct observation of companies' balance sheet, 2012. Number of measurements: 13 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The solvency rate is the proportion between total assets (all assets and rights of companies in euros) and total debt of a company. A solvency ratio of 1 implies that all assets of the company have been acquired from external financing. A ratio less than 1 implies that the debt is higher than the value of the assets of the company. Ratios over 1 indicate that the company could pay all debts selling its assets. Total assets, 13 companies: € 1,754,262.76 Average total assets, 13 companies: € 134,934.29 Total liabilities, 13 companies: € 737,557.73 Average total liabilities, 13 companies: € 56,735.21 Solvency ratio: 2.38 Solvency ratio presents a value of 2.38. In other words, the assets of the companies in the sample can pay 2.38 times the total of debts assumed. This high degree of self-financing is a large safety net against unforeseen situations and foreign interest groups. Nevertheless, despite being irreproachable from the point of view of business' security, such a high figure makes us think of companies that offer profitability under the optimal level. These figures correspond, in general, to family businesses with managers that tend to minimise risks by maximising performance. A lower solvency ratio obtained by increasing external financing could make companies grow at "cheap" interest rates without an economic burden for owners. Nevertheless, from the perspective of the growth of the functional capacity of start-ups based on knowledge, scalability and standardisation of processes and services, this is a barrier that demands efforts and time by entrepreneurs. After overcoming this challenge, companies could experience, with little effort, an important boosting.

CIEM Wealth Generation Report

1.6. Indicator: General liquidity ratio.

Calculation: general liquidity ratio = current assets / current liabilities Observation: direct observation of companies' balance sheet, 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Current assets are all the assets and rights of a company that can be turned into cash flow in a period of a year. It includes stocks, pending clients' invoices, short-term financial investments, etc. Current liabilities are the external financing that a company has to meet in less than a year. General liquidity ratio shows the number of times that current assets are contained in current liabilities. When liquidity ratio is 1, the company will have to settle necessarily all its assets and rights to face its obligations. If the ratio is less than 1, the company will not be able to face its short-term obligations of payments and will have to finance its debt or to sell its property. Ratios greater than 1 indicate companies with high capacity to meet its immediate debts Total current assets, 12 companies: € 819,196.19 Average current assets, 12 companies: € 68,265.52 Total current liabilities, 12 companies: € 260,172.36 Average current liabilities, 12 companies: € 21,681.03 General liquidity ratio: 3.15 The case of liquidity ratio is similar to the solvency ratio previously reviewed. The companies we have analysed offer a liquidity ratio of 3.15. It means that they are able to pay 3.15 times the debt they face within one year with those assets capable of being made in the same period. Without becoming an Acid Test (due to a lack of detailed information), this ratio again indicates an excess of security by entrepreneurs. From another perspective, the great capacity to pay allows to address unforeseen developments and investment, opening a great capacity for growth from new opportunities to companies that move in a constantly changing environment.

CIEM Wealth Generation Report

1.7. Indicator: Subsidies.

Calculation: not required. Observation: direct questionnaire to companies. Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Subsidies 3 obtained by companies before and after entry into CIEM are indicated. The amount of money is also included. Low amounts of subsidies indicate companies that can run by themselves and with great commitment by entrepreneurs while reducing the use of public resources. Number of subsidies before companies entered at CIEM, 14 companies: 3 Number of subsidies before companies entered at CIEM, total: â&#x201A;Ź 16,900.00 Number of subsidies after companies entered at CIEM, 14 companies: 0 Number of subsidies before companies entered at CIEM, total: â&#x201A;Ź 0.00 The quantity of subsidies obtained by entrepreneurs hosted at CIEM is of a negligible amount. On average, companies targeted on this report obtained 1,207 euro, all of them before entry at CIEM. Nevertheless, the average amount is not a descriptive data since the total amount â&#x201A;Ź 16,900 is distributed in three subsidies . Once at CIEM, no company has obtained any subsidy. In microeconomic terms, this information reveals a major economic independence, sustainability and solvency of the business models hosted at CIEM. In macroeconomic terms, the interpretation is deeper but equally positive. Companies hosted at CIEM get results contributing to their territory and society with a lot of wealth, without demanding aid.

3 As defined by the General Accounting Plan (130, 131, and 132), subsidies are not- refundable and include donations and aids given by third parties other than partners or owners, received by the company, and other income and expenses directly included in equity. CIEM Wealth Generation Report

2. Variables flow: loss & profit. 2.1. Indicator: Total turnover 2012.

Calculation: not required. Observation: direct observation of loss & profit of companies. Year 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The total turnover of 12 companies indicates the total sales that have been made along the analysed period, in this case 2012. Total turnover 2012, 12 companies: € 1,375,060.21 Average turnover 2012, 12 companies: € 114,588.35 For the analysis of this data, we proceed to compare it with the assets. Thus, we will obtain an approximate data on the capacity of companies hosted at CIEM to circulate money. Considering an average capital assets of € 134.943,29 (assets = liabilities + net asset value), average turnover is quite close to this amount. In fact, it represents an 85%. As a matter of comparison, this relation for any company from the Spanish stock exchange Ibex 35 taken as a reference 4 will represent 50% (capital assets € 129,773 million versus turnover € 64,679 million in 2012). The difference in ratios indicates that for every euro in their capital assets, companies at CIEM "generate" € 0.85, while a company of the Spanish stock exchange Ibex 35 has a ratio of about € 0.50. This information is very important in macro economic terms, since it indicates that companies hosted at CIEM have greater ability to generate cash flow.

4 Information from the audit account of a selected outstanding Ibex 35' company. Source: Audit report, official accounts published on the website of the National Securities Market Commission (CNMV). For more information, please contact the authors of this report.

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2.2. Indicator: Gross profit.

Calculation: profit before corporate taxes. Observation: direct observation of the profit and loss from the companies' income statement. Year 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Total profit of hosted companies, before taxes and after the financial result in 2012. Gross profit 2012, 12 companies: € 461,947.50 Average gross profit 2012, 12 companies: € 38,495.63

2.3. Estimation of corporate income tax payment.

Calculation: the calculation represents approximately 25% of the Gross Profit according to the application of the Spanish tax for SME's. Observation: direct observation of the profit and loss from the companies' income statement. Year 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Estimated corporate income tax in 2012. The indicator shows the estimated tax revenue according to the provisional accounts of companies hosted at CIEM. Corporate income tax 2012, 12 companies: € 115,486.87 Average corporate income tax 2012, 12 companies: € 9,623.90 In this case, an average payment of € 9,623.9 is estimated to each company hosted at CIEM. This amount, as an important contribution to the society, it is magnified when we apply relative figures. In short, companies paid on average 7 cents per every euro invested in their assets (through direct

CIEM Wealth Generation Report

investment or enforceable). Comparatively, the same Ibex 35' company used as an example on total turnover paragraph, beard a tax on benefit, with total assets of € 129,773 5 million. That is, it paid 1 cent for every euro invested in its assets (through direct investment or enforceable).

2.4. Indicator: Net exports.

Calculation: total of exports deducing total imports Observation: questionnaire to companies Number of measurements: 12 companies hosted at CIEM

as capital firm. None of them belongs

to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Net exports show the amount of exported goods or services provided to foreign companies. An amount of net exports greater than imports improves the national trade balance, while demonstrates competitiveness of exporting firms towards the international market. Net exports 2012, 12 companies: € 627,818.04 Average exports 2012, 12 companies: € 52,318.17 In this case, an intuitive analysis is the most descriptive. Even so, it is proposed the ratio of exports to total turnover from the average of companies hosted at CIEM. For an average total turnover of € 114,588.35, exports account circa 45% of total sales. In proportional terms, 33% -a third- of the companies hosted at CIEM are exporters, providing an international dimension to their models. This feature "drag" to local suppliers, with whom companies work, to export, since part of the value chain is exported through the companies hosted at CIEM (see Supply indicators, particularly Number of Suppliers).

5 Information from the audit account of a selected outstanding Ibex 35' company. Source: Audit report, official accounts published on the website of the National Securities Market Commission (CNMV). For more information, please contact the authors of this report. 6 From 12 companies included in the survey, 4 of them cover all exports.

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2.5. Indicator: Economic profitability.

Calculation: economic profitability = gross profit / total assets. Observation: direct observation of the company balance sheet and the account of losses and profits. Year 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Economic profitability indicates the profit generated for every euro invested in the assets of the company. The ratio shows the ability to generate revenue for every euro that is added to the productive assets of the company. Economic profitability, 12 companies: 0.22

2.6. Indicator: Financial profitability.

Calculation: financial profitability = net profit after taxes/equity Observation: Direct observation of the company balance sheet and the account of losses and profits. Year 2012. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: The financial return indicates the profit in euros generated for every euro invested by the owners of the company. The ratio shows the ability to generate revenue for every euro invested in the company. Economic profitability, 12 companies: 0.34 When calculating the profitability we can assess the ability of managers, as it captures the profitability of each euro invested in assets whatever their source of financing. An economic return of 22% is remarkable. In addition to good management practices from the managers, companies installed at CIEM belong to the tertiary sector with high intellectual employment and always a high qualification

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manpower. So, even though personnel expenditures are high, it affects positively in local employment. Capital investments are lower than to sectors of heavy industrial sectors since all investment is made in training and is not capitalised. Therefore, profitability figures can be understood as distorted. The same applies to financial return, which measures the ability to generate a monetary unit for every euro contributed by investors. This figure goes up to 34%, it means â&#x201A;Ź 0.34 for each euro invested. This gives ratios of ROI (return on investment) lower than three years: the capital invested by entrepreneurs and partners is recovered by the benefits in less than three years, excluding salaries to working partners. In return, the figures are attractive to investment, to the extent that enterprises can save the limited scalability of intensive production models based in knowledge. In other words, intensive activities based in knowledge have a slower growth and slow scalability since investment can only be undertaken in human capital and in training. Thus, direct investment is not producing an immediate impact on the results.

2.7. Indicator: Supplies, number of suppliers.

Calculation: not required. Observation: questionnaire to entrepreneurs. Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: We consider the number of suppliers that furnish to companies, distinguishing between whether or not are from Aragon, at the time of their entry at CIEM and at present. We seek to illustrate the integration of the companies in the region from an economic perspective. Suppliers to companies when entering at CIEM (per company): 58 (4.14) Non-Aragon' Suppliers to companies when entering at CIEM (per company): 27 (1.93) Aragon' Suppliers to companies when entering at CIEM (per company): 31 (2.21) Current Suppliers (per company): 103 (7,36) Current Non-Aragon' Suppliers (per company): 49 (3,5) Current Aragon' Suppliers (per company): 54 (3.86)

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Increase of Suppliers after companies entered at CIEM (per company): +45 (+3.21), +77.6% Increase of Aragon' Suppliers after companies entered at CIEM: +23 (+1,64), +74,2% This section illustrates quite clearly the ability to redistribute income in the territory and the root of wealth that the companies get. A proportion of local suppliers at the time of entry is not overshadowed by the growth of companies hosted at CIEM. On the contrary, companies maintain the proportion of suppliers from Aragon against total suppliers. Moreover, the growth of firms is not supported by a single supplier, but the number of suppliers to the companies hosted at CIEM increases by 77.6%, distributing their efforts and encouraging various initiatives. There is not only an increase of the expense by supplier, but also there is an increase in the number of suppliers. In addition, as we have seen in the net exports indicator, sales abroad made by entrepreneurs involve a part of the value provided by all these suppliers that they export indirectly.

2.8. Indicator: Supplies, total costs. Calculation: not required. Observation: direct observation of the company income statement (losses and profits). Year 2011/2012. Number of measurements: 6 capital firms hosted at CIEM in 2011. The same 6 companies in 2012, in order to benefit an evolutionary effect. It is important to highlight that the sample of 6 companies is because the majority of companies hosted at CIEM were not registered in 2011. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: Supplies' expenditure reflected in the income statement. Portion of the economic activity that is dumped into suppliers. Total supplies' expenditure 2011, 6 companies: € 77,317.28 Average supplies' expenditure 2011, 6 companies: € 12,886.21 Total supplies' expenditure 2012, 6 companies: € 114,648.80 Average supplies' expenditure 2012, 6 companies: € 19,108.13 Evolution of the average supplies' expenditure, 2011 - 2012: + € 6,221.92 per company (+48.2%) CIEM Wealth Generation Report

It is necessary to make a remark: The 6 companies considered in 2011 are included in 2012, but there were not considered neither new companies incorporated in 2012 nor the companies that have left CIEM due to their maturity. The idea is to get the evolution effect from one year to another. Also, the average figure gives an overview that can be extrapolated if we seek aggregate information on total expenditure. Having said that, it is worth to highlight the high level of supplies' expenditures made by companies hosted at CIEM, fact that again confirm the high rotation of money generated and thus of the economy activity. In addition, it is noticeable the annual company growth of nearly 50% in their supplies' expenditures. This information crossed with the previous ratio (number and location of suppliers) hints the central role of these enterprises in the local economy.

2.9. Indicator: Personnel expenditure.

Calculation: The total amount of taxes paid by the company and by personnel represents 42% of the personnel expenditure for companies, following an estimation according to the total aggregate tax burden in Aragón. Observation: direct observation of the company income statement (losses and profits). Year 2011/2012. Number of measurements: 11 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Personnel expenditure by companies hosted at CIEM. This variable reflects the effort in income reverted to the workers, and thus the economic volume dumped into the local society. It also allows an accurate estimate of the money contribution in terms of income tax who are paid by the company. Total personnel expenditure 2012, 11 companies: € 581,299.97 Average personnel expenditure 2012, 11 companies: € 52,845.45 Tax burden for total personnel’s expenditure 2012, 11 companies: € 244,145.99 Tax contribution for average personnel’s expenditure 2012: € 22,195.09

CIEM Wealth Generation Report

These ratios show the efforts of start-ups in terms of social impact on employment and tax contribution. For the 11 companies, the total personnel' expenditure recorded was € 581,299.97, and extrapolating to 21 companies hosted at CIEM the total personnel’s expenditure accounts € 1,109,754.49. In terms of tax contribution, companies hosted at CIEM made an estimated average tax contribution of € 22,195.09, which represents a total tax contribution of € 466,096.89 Also, these data do not consider neither the tax contribution that entrepreneurs make as selfemployers, nor the contributions of coworkers.

2.10 Indicator: V.A.T. settlement result.

Calculation: not necessary. Observation: Form 390 from the Tax Authority. Number of measurements: 12 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey have other company format (civil society, worker-owned company, etc.) or belong to a bigger company and are intra-entrepreneurships or spinoffs. Summary: Result of the value added tax settlement. This indicator shows the value generated by companies exclusively in an indirect way since it compensates the generation of value coming from suppliers. On the other hand, it is a measure of the contribution of firms to tax revenues. Total V.A.T. result 2012, 12 companies: € 627,818.04 Average V.A.T. result 2012, 12 companies: € 52,318.17 These results are fully consistent with those obtained so far, considering the high volume of intra-EU exports (exempt) from companies hosted at CIEM.

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2.11. Average tax estimation.

Calculation: algebraic sum. Observation: Estimated average contributions from the corporate income tax, estimated average taxes from personnel, average result of VAT settlement Number of measurements: sum of averages.The characteristics of each sample vary depending on the indicator. Summary: Algebraic sum of the contributions measured in the document. We consider the average amount per firm in order to have quantitative consistency of the different samples for each indicator. We add the estimates of the corporate income tax, the contribution by personnel and by the company, and the result of the annual VAT settlement. Average V.A.T. result 2012: € 52,318.17 Tax burden for average personnel's expenditure 2012: € 22,195.09 Average corporate income tax 2012: € 9,623.90 Average tax burden per company: € 84,137.16 This indicator is a good example of the social function of entrepreneurship and of the advantages to support entrepreneurship in all possible ways. Each entrepreneur hosted at CIEM provided, on average, to the State, Regional and Local Administration an amount of € 84,137.16 in the period of 2012. Taking into account that there are 21 companies hosted at CIEM and 24 freelance professionals, the results are remarkable. Moreover, in terms of impact-effort ratio, initiatives such as the Business Incubation Center at the Digital Mile have proved its validity in full.

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3. Survival of companies at CIEM. 3.1. Rate of company survival at CIEM.

Calculation: active companies / total companies. Observation: Data base CIEM Zaragoza Number of measurements: 20 measurement (100% of companies hosted at CIEM) of companies hosted at CIEM during two or more years or that have been closed. Summary: This indicator estimates the number of companies that have entered at CIEM and maintain its activity after two years. We also include companies that have left CIEM recently because of its good results or after exceeding two years as the maximum period of stay. Closed companies at any time since its start, who have stayed at CIEM, are also included. Companies older than 2 years: 16 Closed companies: 4 Rate of survival after 2 years: 80% Rate of failure before the second year: 20% This indicator is significant and illustrates on the ecosystem's capacity generated at CIEM to provide viable structures to the hosted start ups. After two years, 80% maintain its activity, while only 20% fail. Furthermore, as a matter of comparison, this indicator has more significance taking into account that only 15% of Spanish start ups exceed 2 years life and the rate of survival from companies hosted at CIEM are a sample of the good work of entrepreneurs and of the effects on them from the efforts of the business ecosystem created at CIEM.

CIEM Wealth Generation Report

4. Variables on customers. 4.1. Indicator: New customers gained from the start.

Calculation: The days required by companies hosted at CIEM to attend a new customer. We divide the new customers of all companies, since their entry at CIEM by the number of days that all companies have been at CIEM. Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: Number of new customers, not existing at the time of the company starts at CIEM, and number of days needed by each company hosted at CIEM to attend a new customer. New customers attended since companies started at CIEM, 23 companies and entrepreneurs: 376 New customers by entrepreneurship: 16.35 Proportion of customers established in Aragon: 56.2% Proportion of customers outside Aragon: 43.8% Number of days needed by each company hosted at CIEM to attend a new customer: 18.16 days In this case, the information provided confirms the validity and value of the proposal from entrepreneurs and illustrates its proactivity. On average, every entrepreneur needs 18.16 days to meet a new customer. Conversely, each entrepreneur at CIEM gets 20.1 new customers every year. It is interesting to compare these data with the information on the distribution of these customers in the territory. More than half of customers are from Aragon, working on the integration of wealth in the region. Finally, the number of new customers also provides information on the role of CIEM as a core of value that attracts mature companies.

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4.2. Indicator: Active customers.

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Social sustainability indicators 1. Indicator: Structural posts offered by companies.

Calculation: (jobs created / number of firms) * (365 / Average presence at work per sample) Observation: direct questionnaire to companies, CIEM database at the entry date. Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: Searching the amount of structural jobs created by companies at the entry at CIEM and at present time in order to know the number of jobs created in a year as a standard average. It standardizes the year because of the variability of time after the entry. A structural post is one that requires 8 hours of daily work. It can be split regardless who does it and in which capacity (owners, self-employed, freelancers, internships ...). This information shows the ability to generate employment by companies hosted at CIEM. Number of structural posts when entering CIEM, 14 companies: 34.5 Posts per company when entering at CIEM, average: 2.5 Number of structural posts (currently), 14 companies: 52.5 Present posts per company, average: 3.75 Increase in structural posts: +21 (+56%) Average days spent in CIEM, 14 companies: 337 Average jobs created per company and year of stay in CIEM: 1.4 Annual increase in manpower: 56% This information is especially valuable for two reasons. First it describes illustratively the increased activity from companies during their stay in CIEM: in the sample, companies have 336 days average in CIEM, so they have increased by more than 50% their needs of working hours within a year.

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Second, if we add the number of current structural positions to the number of co-workers (assuming they are dedicated to their professional development as self-employers, 22 posts) the number of fulltime employed people within the CIEM is 80.5 in 336 day period.

2. Indicator: men / women distribution.

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 15 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: We measure the number of women working at CIEM at the time of the company starts and at present time and we calculate the evolution. These data complemented with the previous section to get percentages. Women working when entering at CIEM, 15 companies: 14 Percentage of women working at CIEM (from a total of 37.5 structural jobs), 15 companies: 40% Women currently working at CIEM, 15 companies: 23 Percentage of women working at CIEM (out of a total of 58.5 structural jobs), 15 companies: 39.32% Variation of women working at CIEM: +9 (+64,3%) These data are extremely positive, as in Europe only 30% of people working in the ICT's sector are women, which is significantly lower than the number of women presently working at CIEM. Moreover, although the proportion of men and women has remained in the overall growth of the number of structural jobs, the increase of women is higher (necessarily, to keep the total percentage), something striking and remarkable considering that the starting point exceeds 10% the European average. (http:// www.europarl.europa.eu/news/es/headlines/content/20130426STO07643/html/La-tecnolog%C3%ADaeuropea-necesita-m%C3%A1s-mujeres).

The entrepreneurial profile in Spain is a man, 38 years old with secondary education, specific training for entrepeneurship and level of income in the upper third, CIEM largely improves those ratios. While the percentage of women working at CIEM is 40%, the entrepreneurial activity of women in Spain has decreased.

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3. Indicator: Recruitment.

Calculation: not required. Observation: direct questionnaire to companies. Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: We consider the number of people employed in 2011 and 2012, distinguishing between contracts with a duration over or under 6 months. Hired people is someone receiving a remuneration from the company, whatever their contractual status (self-employed, freelance ...). People hired less than 6 months in 2011: 1 People hired less than 6 months in 2012: 9 People hired more than 6 months in 2011: 6 People hired more than 6 months in 2012: 10 Taking into account the structural jobs indicator, we can observe how at the end of 2012 around 80 people were working at CIEM. From this data, we can deduct that around one third of those jobs are new and that 26 people have been hired. These data show the capacity of micro-projects to create employment. The fact that these are knowledge-intensive jobs with more potential and scalability in some cases, make the commitment to entrepreneurship not only a commitment to self-employment of promoters, but also for being employed by others or self-employed staff.

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4. Indicator: internships.

Calculations: not required. Observation: direct questionnaire to companies Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: Measurement the number of internships in companies hosted at CIEM Total internships, 14 companies: 21 Average internships, 14 companies: 1.5 This information shows that, on average, companies hosted at CIEM have more than one internship person. This information is complemented by an increase in the recruitment rate, making to the recruiters attractive to the start their professional development in these companies. In the context of generation of wealth, both internships, whether temporary or not, substantially improve the training and the knowledge of a group of professionals that also improve the level of employment in the region and their talent.

5. Indicator: Agreements signed with training entities

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 14 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: We search to know how proactive are companies hosted at CIEM regarding training contracts referred to all signed agreements, contracts, or formal long-term relations with training organisations dedicated to training people. Total of agreements with training entities: 9 Rate of agreements per company: 64.3%

CIEM Wealth Generation Report

The fact that, on average, 64.3% of companies at CIEM have stable agreements with training institutions, show the commitment of entrepreneurs to social sustainability and recruitment with prospects of long-term careers. Likewise in their value chain, they contract as suppliers to entities that can provide them the usual raw material of CIEM companies: knowledge. Also from the perspective of the EFQM, this relationship with the society through collaboration in formal and non-formal training, is a contribution that empowers the role of the company as a social and citizen entity.

6. Indicator: investment in training.

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 23 companies hosted at CIEM as capital firm. None of them belongs to a parent company. Companies not included in the survey belong to a bigger company and are intraentrepreneurships or spin-offs. Summary: Efforts in training and upgrading workers and members of the business team housed at CIEM are illustrated. It is included any quantifiable investment in training of the team with recruitment by the company. It is also included specific training, courses, etc., fees paid by the company and/or number of hours / trainers paid during working hours. Total investment in training in 2012, 23 companies / co-workers: 18,200 â&#x201A;Ź Average investment in training in 2012, 23 companies / co-workers: 791.30 â&#x201A;Ź Average investment per worker (65 in the sample): 280 â&#x201A;Ź In this case, companies ICES again show an interesting performance . According to figures provided by Arrabe Consultants (http://www.arrabeasesores.es/noticias/detalle/formacion-trabajadores-2013) only 28% of the Spanish private companies will provide training for their workers. http://sociedad.elpais.com/sociedad/2012/05/15/actualidad/1337117212_504535.html If in 2005 company training costs accounted 1.20% of the total personnel costs, in 2010 they were 0.68%, according to data from the Benchmarking Club of Human Resources at IE Business School. It means, that it is at the level as it was 10 years ago, when 75% of staff received training during 1.3% of their annual working time. "It has been a decrease in total expenditure, the expenditure per employee, the number of people trained and the number of hours of training received," says Pilar Rojo, Director of the Research Center of IE.

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Partnership and business co-operation indicators 1. Indicator: Projects undertaken with other community members.

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks to identify the number of projects developed in collaboration with other entrepreneurs through formal contract or without a contract in order to provide services to third parties. Also identifies the number of projects developed for other members of CIEM community as service contracts whatever the service would be. Number of projects to third parties in collaboration with other entrepreneurs: 13 Number of projects for other members of the community: 13 Projects with other members of the community without financial aid: 19 Projects with other members of the community with financial aid: 7 Turnover from projects with other members of the community: â&#x201A;Ź 15,700 Average turnover from projects with other members of the community: â&#x201A;Ź 2,242.86 These data are particularly relevant for a center like this. On the one hand, they clearly show an inclination of collaboration by the community as a whole, with 26 collaboration projects of any kind. On the other hand, turnover of projects with/or for the community members is attractive, an average of â&#x201A;Ź 2,242.86 for each service/project rendered. But most encouraging of this information is the minimization of the typical problem of clustering: intensive dedication to the domestic economies. In this case, from 26 common projects, only 13 of them are devoted to the domestic economy while half, also 13, are devoted to third parties.

CIEM Wealth Generation Report

Without any doubt, this social indicator is the one that have more impact in one of the objectives of CIEM: the transition from an exclusively culture of competition to a culture of co-operation and collaboration. In this sense, this indicator shows that we do not speak about good nature, but about very concrete realities with tangible economic impact, and cultural impact, culture of know-how, essential for the future economy.

2. Indicator: Open code products development / copyleft.

Calculation: not required Observation: direct questionnaire to companies Number of measurements: 14 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: We identify the creation of products/contents developed with an open code/copyleft as a contribution to society made by entrepreneurs. We understand as a development, the elaboration of projects, products or concepts with or without a profit goal. Number of projects made with open source / copyleft: 1 This data needs interpretation. Many of the projects hosted at CIEM are developed in open source. We all know by now that open source does not mean "non-profit" but shared knowledge. That's the key. The open source projects share knowledge but pay for the value created. The open innovation process carried out at CIEM is implemented in favour of the third Aragon social sector as an example of how a community of entrepreneurs can put at the service of other entities its collective thinking and knowledge in order to share it and generate projects that can be disseminated and spread.

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3. Indicator: Patents or property right registers.

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks to identify the intellectual output and generation of recordable procedural inventions or innovations. We include all records in the Patent and Trademark Office, presentations, patents of improvement, any record of invention or innovation or project likely to be formally patented with reasonable evidence of viability for the benefit of the company. Number of patented projects or ready to get a patent in the future belonging to a company / entrepreneur: 14 This information is particularly relevant in the national economy, particularly given the poor Spanish performance in 2012 in terms of patents and applications. It is estimated that in total, Spain has registered 1,687 patents and applications according to the World Intellectual Property Organization (http://www.wipo.int/export/sites/www/pressroom/en/documents/pr_2013_732_a.pdf # Annex1) with a decrease of 2.4% from previous year. Thus, entrepreneurs at CIEM would represent approximately 0.83% of national patents if they would formally patent all its developments. Whereas on 1st January 2012 the DIRCE had 3,199,617 records of entities from all legal conditions (Central Business Directory, Spanish Statistical Office), we can estimate that around 1896 entities are needed in order to generate a patent in Spain, while at CIEM is less than 2.

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Environmental Sustainability Indicators 1. Indicator: Changes in relationships with suppliers.

Calculation: not required. Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks to express the intensity of entrepreneurs towards its suppliers in order to demand a responsible environmental behaviour. We include the selection of suppliers taking into account its environmental impact, its environmental certificates, and its environmental culture. Proactivity in requesting to suppliers to make efforts on environmental issues is also included. Number of specific demands or changes towards suppliers: 6 Average of changes towards suppliers: 26.1% 26.1% of the entrepreneurs express that they have adopted a proactive measure with regard to suppliers (for example, hiring ecological servers, preference for environmentally certified suppliers or that they can prove their environmental responsibility, request for digital formats to avoid printed documentsâ&#x20AC;Ś), demanding certain behaviour or turning to a new one. It is also important to realise that there is a slant to take into account in this indicator: many of the entrepreneurs have a limited number of suppliers (50% are CIT companies with its own development); many other are working in surroundings that respect the environment (28% are energy efficiency companies). This results in a greater respect for the environment. On the other hand, demanding a respectful behaviour has a backward influence on the value chain. When a supplier is asked to have a respectful environmental behaviour its commitment is also improved. Suppliers have to detect that an important variable for decision making by entrepreneurs is the environmental footstep. This is a valuable sign for the market, highlighting once again the value that the new economy of micro projects from entrepreneurs generates in terms of wealth.

CIEM Wealth Generation Report

2. Indicator: Changes in professional performance Calculation: not required Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks to demonstrate the commitment of entrepreneurs in their everyday behaviour. The variable measures whether or not changes in products / services / processes, involving good environmental practices in a proactive form by the whole organization, are included. Companies or co-workers that show changes in their behaviour: 11 Average changes in its processes: 47.8% In this case, nearly half of the companies or co-workers declare that they have introduced changes to their productive processes (avoiding the use of paper, change of processes to minimize energy impact, minimizing displacementâ&#x20AC;Ś) in order to reduce the environmental impact. This amount is consistent with the former data on changes regarding suppliers in which a clear proactivity was observed.

Therefore, start-ups have more freedom of action estimating a low bargaining power

regarding suppliers, but a high capacity of change and flexibility in internal processes. Therefore, we can see high environmental awareness from companies hosted at CIEM, coherent with the objective of environmental sustainability supported by CIEM.

3. Indicator: Changes in the relationship with customers Calculation: not required Observation: direct questionnaire to companies Number of measurements: 23 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks to measure the commitment of entrepreneurs to their clients and to implement an environmentally friendly behaviour as a strategic variable and/or argument to sell. The question tests whether or not the information provided to customers on the environmental impact of the product / service has been made proactively, if environmental information from the enterprise is given to customers intending to obtain environmental certificates, if waste treatment suggestions are provided.

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Companies or co-workers offering more environmental information on its products or services, or change its relation to clients: 8 Average of changes regarding customers: 34.8% This measure is very interesting. In small companies with little power of negotiation, the capacity to drive clients to change their behaviour is weak. Nevertheless, more than a third of CIEM companies obtain positive results. Companies offer product information to its clients in order to obtain a certificate or even as a business reason with final users. On the other hand, we can see proactive attitudes that can force clients to have a respectful behaviour such as avoiding the use of printed material or working with nonecological suppliers both in Spain or abroad or restrict trips by consensus. This attitude not only has a direct impact on environment, but also an influence on integration of the generated value. In this case, clients multiply the efforts of entrepreneurs and most of them incorporate improvements in their processes that go beyond a relationship with CIEM companies. One more time a significant effort in the value chain have repercussions to its clients and therefore, in a society that values much more the environmental dimension of consumption or from the provision of services and/or products.

4. Indicator: Environmental certificates.

Calculation: not required Observation: direct questionnaire to companies Number of measurements: 14 companies and entrepreneurs in co-working mode at CIEM either as capital company or self entrepreneur. None of them belongs to a parent company. Companies not included either belong to a bigger one or are intra-entrepreneurships or spin-offs. Summary: It seeks, the number of companies with environmental certificates or in the process to get them. It is considered a positive response when there is an environmental certificate approved by the company, or that the company is working with defined deadlines to obtain a certificate. Companies with certificates or next to get them: 4 Percentage of companies with certificates or next to get them: 28.6% More than a quarter of the companies surveyed at CIEM have or are in the process of obtaining environmental certificates. These administrative efforts and best practices result in social benefits in all directions.

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Companies get better results by minimizing waste, while enhancing your brand image. In turn, society as a whole gets the best interest of minimizing the environmental footprint of production processes. As far as the value chain is concerned, suppliers to responsible companies are forced to improve its processes in order to be able to sell to certified companies, and clients are trained in best practices while they are given access to certificates. However, the fact that more than one quarter of all start-ups has or is in the process of getting an environmental certificate shows a good management, but also a high awareness and a significant organizational culture.

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Table of ratios INDICATORS OF ECONOMIC SUSTAINABILITY Survival of companies at CIEM Survival rate of companies at CIEM > 2 years:

80%

Stock variables Average capital assets:

134.943,29

Average share capital:

15.564,14

Average equity 2011:

79.854

Average equity 2012:

140.319,78

Increase on average equity:

75,72%

Average total liabilities:

52.682,7

Average current liabilities:

19.298,03

Average long-term liabilities:

33.384,67

Debt quality ratio:

0,37

Average total assets:

134.934,29

Average current assets:

68.265,52

Liquidity ratio:

3,15

Solvency ratio:

2,38

Average subsidies per company before entry at CIEM: Average subsidies per company after entry at CIEM:

1.207 0

Flow variables Average total turnover: Average gross profit: Estimation corporate income tax per company: Net exports per company: Export companies:

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114.588,35 38.495,63 9.623,9 52.318,17 33%

Flow variables Average economic profitability:

0,22

Average financial profitability:

0,34

Suppliers per company before entry at CIEM:

4,14 Aragonese / Non Aragonese:

Current suppliers per company:

2,21/1,93 7,36

Aragonese / Non Aragonese:

3,86/3,5

Suppliers increase:

77,6%

Aragonese suppliers increase:

74,2%

Average supplies expenditure in 2011:

12.886,21

Average supplies expenditure in 2012:

19.108,13

Increase of average supplies expenditure:

48,2%

Average personnel expenditure:

52.845,45

Estimation average contribution to personnel' taxes:

22.195,09

VAT per company:

52.318,17

Estimation corporate income tax + VAT + contribution to personnel:

84.137,16

Variables on customers New customers since entry at CIEM, average per project:

16,35

Aragonese customers:

56,2%

Non Aragonese customers:

43,8%

New clients, per year, for every company: Days needed to get a new customer, per company: Active customers per company:

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20,1 18,16 9,9

INDICATORS OF SOCIAL SUSTAINABILITY INDICATORS OF SOCIAL SUSTAINABILITY Structural jobs per company at entry:

2,5

Current structural jobs, per company:

3,9

Annual increase in structural jobs: Working women at entry: Percentage of women at entry: Working women at present:

56% 14 40% 23

Current working women, percentage:

39,32%

Variation of working women at CIEM:

64,3%

Employed people less than 6 months, 2011, per company:

0,07

Employed people less than 6 months, 2012, per company:

0,64

Employed people more than 6 months, 2011, per company:

0,43

Employed people more than 6 months, 2012, per company:

0,71

Internships, per company: % of companies with training agreements signed: Average investment in training, per company: Average investment per worker:

1,5 64,3% 791,3 280

INDICATORS OF BUSINESS COLLABORATION AND COOPERATION INDICATORS OF BUSINESS COLLABORATION AND COOPERATION N Projects in collaboration with other CIEM members, per company: Collaboration projects with economic profit: Average turnover from collaboration projects:

1,13 26,9% 2.242,86

Collaboration projects without economic profit

73,1%

Projects undertaken with open code/copyleft:

Patents or projects that can be patented, per company:

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0,61

INDICATORS OF ENVIRONMENTAL SUSTAINABILITY INDICATORS OF ENVIRONMENTAL SUSTAINABILITY Specific demands to suppliers or decision taken on environmental criteria:

26,1%

Changes on working processes according to environmental criteria:

47,8%

Changes in relation with clients according to environmental criteria:

34,8%

Environmental certificates obtained or on-going:

28,6%

CIEM Wealth Generation Report

Conclusion This report on the production of wealth shows that the economic model generated by entrepreneurial micro-projects, launched with entrepreneurial dynamic, generates true wealth in the region. In this regard, it would also be desirable that the wealth generated would serve as an incentive to public authorities in order to pay attention to the new entrepreneurship economy and to support it much more than other undertakings, which used public resources, but have not generated enough wealth in the region as it was shown during the crisis. Thus this report also gives some ideas as to where the aid to entrepreneurship from public authorities should go. We can highlight among others:

Economic sustainability 1. Financing. This report shows a conservative behaviour from our entrepreneurs in relation to financial matters. Liquidity and indebtedness indicators show that our entrepreneurs can be even bad managers of their equity since they do not invest it for the development of their economic activity due to an excess of caution.Thus, out of the traditional consideration, our entrepreneurs do not need to use capital investment, given its high ability to pay and debt ratios. Instead, they would be encouraged by having beneficial conditions for the development of their businesses. In this sense and financially speaking, instead of capital it would be better to obtain beneficial conditions for credits, operations without bank guarantees 7 or credit accounts to absorb cash flow irregularities. It is clear that sooner or later every company will need investment, but this is not a general case, and according to our data this is not the main priority of the activities developed by our entrepreneurs. Apart from the financial issue, an access to established commercial channels, minimised barriers for participation in tenders and large projects, and the trust of customers in new ways of doing things, would not only represent a boosting element for entrepreneurs, but also would result in structural economic benefits given the ability of projects hosted at CIEM to generate value. 2. Taxation: Maybe this is the main demand of entrepreneurs hosted at CIEM. It is not comparable the effort that people who begins starting a business has to undertake than who is already in a mature business process. In this sense, the reduction of taxes being paid by selfemployed people, the discounts for hiring workers without taking into account their social group or age, and the reduction on the corporate income taxesâ&#x20AC;Ś are permanent claims from

7 Example: The program from the Saving bank â&#x20AC;&#x153;bercaja Emplea T and undertake â&#x20AC;&#x153; with their loans guaranteed by its Obra Social.

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entrepreneurs hosted at CIEM, and we are convinced that if adopted they would not reduce wealth generated to the society, but certainly would create more opportunities for entrepreneurship and would increase the number of projects that would be developed, which would generate employment, etc. 3. Impact. The presence of companies and activities such as those hosted at CIEM, show a high economic impact in a direct and positive way in the rest of activities of the region. The companies export, consume services that can not be internalised, provide of customised high value-added services, generate employment and wealth. Support for these activities including aid from public authorities and support by society, would produce a multiplying effect on the regional economic activity.

Social sustainability 1. Employment. Maybe it is time to create new forms of employment in entrepreneurial projects. The wealth generation report shows job creation well above what we see in other economic sectors. There is not enough with the current forms of recruitment for training and for hiring entrepreneurs, which certainly neither cover the whole spectrum of people who undertake projects nor meet the needs of all entrepreneurial projects. Making the transition more flexible between an internship and entrepreneurship seems to be the most desirable option, but it does not find its place in the existing types of contracts. The same applies to a more flexible and accessible recruitment for part-time jobs. 2. Training. We have a generation of highly skilled entrepreneurs with two characteristics, their youth and their seniority coming from unemployment affected by the crisis. But we still have an important deficit of an entrepreneurial culture, and that, once someone decides to jump into the field of entrepreneurship, should be managed with ad hoc training on those skills and abilities necessary for the development of a business project. CIEM through its program "widen people to accelerate projects" covers these shortcomings both in the development of skills and competencies and in the development of required know-how. In this regard, the average amount of investment in training from hosted companies at CIEM highlights the effort carried out, and therefore the enormous contribution to the growth of the knowledgeable society and businesses. Support and promote this attitude is absolutely necessary. But it is also important, given the emerging nature of this cross-sector of our economy, to develop specific university programmes and professional training to cover the gap and be aligned with EU Bologna Plan in the sense of developing applied and not only theoretical knowledge.

Environmental sustainability 1. The value of the environmental dimension. There are many initiatives to introduce in our organizations environmental certificates. However there is a lack of a business and consumption cultures in which the environmental dimension is properly valued. Consumers hardly perceive the value added of the environmental dimension of a process or product. And being not a tangible quality, efforts seem to fall in vain when, in times of crisis, adjustments CIEM Wealth Generation Report

start with the weakest parts. Several campaigns from public or private initiatives are underway to inform the consumers and the business sector about this value, but this requires a cultural change, starting from early stages at school and at the university, where the environmental value can be perceived as a common good, unrestricted, because it is part of the needs or essential dimension of a product or service.

Moving from a culture based on competition to the business collaboration 1. Collaboration. Thus, CIEM is presented as a place where diversity and complementarity coexist. The search for collaborative 8 and cooperative work are essential to foster the new business culture 9 of cooperation and collaboration boosted by social innovation and entrepreneurship. In this regard the commitment to cooperative companies, the programmes to support business collaboration, the stimulation of cross-cutting through clusters, or open innovation processes, seem to be desirable formulas to stimulate this new business culture. 2. Smart cities and smart citizens. In the society in which we live facing a future where technologies will make more friendly the coexistence and relationship of cities, it is essential that in this development the numberless micro projects developed from the local sphere, but with a global vocation, will be taken into account. In this sense, focus on smart cities should complement small city projects and bigger national or international companies. In addition to developing smart cities and citizens, we would evolve smart processes in order to achieve collaborative and complementary processes.

8 Ex. The aids from the Regional Government of Aragon.

9 Aragon Plus program. Catalogue of services of CIEM.

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Entrepreneurs talk “CIEM, more than a building is a way of creating and feel part of a community" Rubén Santos, Nanoimmunotech.

"Be at CIEM has favoured our improvement. It is difficult to point out a concrete aspect. It is to be within a cultural soup of entrepreneurs with common challenges where all together generate opportunities" Eduardo de Almeida, CognitNRG.

“I always comment that when you arrive at CIEM you can breathe differently. People here have projects, ideas and illusion and share them with each other. In addition, there is too much talent. It is not easy to find all that together" Pedro Melendo, Coanatur.

"Be part of CIEM community means to multiply by 100 the resources of your company. It is a golden opportunity to progress and grow". Ana Sanz, Ytalento.

“Be at CIEM is like being in an island full of positive energy where you always leave with your moral strengthen and the head held high. Coming in the morning you always find the smile of your partners. The activities allow us to interact with one another and with the outside". José Luis Lanau, Homecompartia.

“There is a perfect atmosphere for developing projects. It is an space where innovation, knowledge and, above all, illusion flows". Fernando Continente, Pablo’s Trading. CIEM Wealth Generation Report

"CIEM is a synonym of knowledge, innovation, entrepreneurship and motivation". Goodday Solutions

“After nearly six months in the center our expectations have been met. Behind closed door, CIEM offers and ideal working environment, excellent facilities and a sensational work atmosphere. Apart from that, CIEM gives you the opportunity to show your company outside due to the multiple communication activities carried out, and offers the opportunity to know the different external services available for companies thanks to the high number of talks and presentations taking place in its premises" Mario Bonel y Samuel García, Exporvía.

"Be part of CIEM has helped us to find a place ourselves in the region and be much more visible thanks to its boosting programme". Jorge Álvarez, Barambambu

“EFINÉTIKA could, thanks to CIEM, establish highly powered relations for the development of businesses and a common sense of struggle and understanding to improve ourselves. I am sure that our project has increased in quality and quantity during these two years thanks to those relationships". Vicente García, Efinétika.

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Report produced by init Corp

CIEM Wealth Generation Report