thinking business

The Kaunas region has a skilled, educated workforce as well as a high entrepreneurship rate. Natasha Turak talks to district municipality mayor Valerijus Makūnas about how investors can benefit from these demographics.

Q: What are your biggest challenges in terms of economic development and job creation in the Kaunas region?

A: One of the most important tasks – alongside the national government, parliament and other responsible authorities – is to improve the region's investment environment, and improve and develop the infrastructure.

It is also very important to harmonise the industrial zones and residential development, to ensure that the development of the region is based on the principles of sustainability. For this purpose, Kaunas district has prepared the Strategic Development Plan, which clearly defines the agricultural, industrial, residential and recreational areas.

For us, as representatives of the local government, it is important to create high-paying jobs for the people [in our region] and to implement ecological principles in order to ensure the high quality of life. 

Q: In what areas you would like to see more investment, and what is your strategy for attracting it?

A: Universities operating in the region prepare multi-skilled professionals, therefore we would like to have more investments related to production, especially in electronics, IT and intelligent technologies. The municipality is working hard to create the best possible conditions for investors. The favourable economic environment in Kaunas district is reflected in the growing number of operators. Entrepreneurs are motivated to establish [a base] here because of our good tax policy. For new businesses employing more than 50% of workers from Kaunas district, residence, land and real estate taxes are not applied for three years. Kaunas Free Economic Zone also offers tax incentives for investors.

The municipality has also created a development programme [to run] until 2020, aimed at SMEs operating in Kaunas district. Therefore, our SME Business Promotion Fund has been designed.

Lithuanian Credit Union data shows that in Kaunas district municipality, the entrepreneurship rate is 177% [higher than] the Lithuanian average [making] the municipality one of the leading places [in this field] in the country.

Q: How are you working with public institutions and private businesses to stimulate growth?

A: Kaunas region’s strategy is developed and coordinated by Kaunas Regional Development Council, which consists of eight municipal leaders. Business interests are represented by Kaunas Chamber of Commerce, Industry and Crafts. The region is relevant to the whole country – it generates a large part of the GDP, therefore regional mayors constantly coordinate their actions with the ministry of government, Lithuanian parliament and responsible authorities.

Universities mainly concentrated in the city of Kaunas also help to create a business strategy for local government. [A good example of a university creating a business strategy is] Aleksandras Stulginskis University, which is in Kaunas district.

Our main goal is to develop Kaunas region for scientific and business partnerships based high-value-added industrial land.

Q: What might foreign investors not know about the Kaunas region?

A: Kaunas region, especially Kaunas district, is undoubtedly one of the most favourable places to invest in eastern Europe because of its relatively inexpensive land, great communication, its well-developed education system, its infrastructure, the sufficient number of skilled [workers], and Kaunas Free Economic Zone. This is backed up by the Lithuanian Free Market Institute’s Municipalities Index, in which Kaunas district has taken the first place for the past five years. The Lithuanian Free Market Institute evaluates both the investment and social environment indicators of each municipality [in the country].

[In Kaunas] a lot of building permits have been issued. In 2015, Kaunas district was in second place in the country according to this indicator, following only capital Vilnius. Currently, it remains among the top five [by this measure].

This article is sourced from fDi Magazine
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