Usually, when a taxi driver points out road works, it is a chance to learn a few local swear words, and perhaps bond over a mutual loathing of inefficiency, local governments and the general state of affairs. But, for Marek, a 50-something-year-old taxi driver in Lodz, a city of 740,000 people located in central Poland, road works are not something to complain about.

“Driving around Lodz is not exactly a walk in park, but it is great to see things finally changing,” he says, driving past Trasa W-Z, one of the city’s main communication arteries, which, at the moment, resembles a giant construction site more than it does a road. 

Advertisement

Lodz's mayor, Hanna Zdanowska, who was re-elected in November 2014, says that most of the city's residents are supportive of the developments that are under way. “There is a support for the changes even though for some of our residents it means relocating or a longer commute. You can see clearly that people are hungry for change," she says. 

Lodz, a thriving textiles hub for most of the 19th and 20th centuries, saw it fortunes take a turn in the late 1980s and early 1990s, when Poland started on its path to economic liberalisation. “Many industries took a hit back then, but the government would help stockyard workers and miners. No one was interested in what was going to happen with textile workers, or Lodz for that matter,” says Ms Zdanowska. “There is still a lot to be done, but we are bouncing back,” she says, pointing to the Lodz New City Centre, an initiative that aims to transform some 10,000 square metres in the heart of the city.

Something old, something new

Among the flagship projects being realised as part of the Lodz New City Centre initiative is the Lodz Fabryczna railway station, which is being revamped and the tracks moved underground to free up space on street level; Brama Miasta, a residential and commercial complex; and EC1, which will see the city’s oldest power plant transformed into a technology and leisure complex, complete with a 3D cinema, planetarium and art galleries.

Not all of the city’s development ambitions have gone to plan, however. Ksiezy Mlyn, a district in the south of Lodz, used to be home to Poland’s biggest textile operation but, when the city’s textile industry went bust, the area became deserted, housing nothing but a handful of dilapidated industrial buildings. Efforts to turn some of these buildings into high-end living spaces stalled when MNE Investments, the company behind the project, declared bankruptcy in 2012.

But, there is still hope for the area. One former textiles factory, built in the 19th century by local entrepreneur and philanthropist Ludwik Grohman, has been carefully restored and modernised for use by the Lodz Special Economic Zone (LSEZ). Established in 1998, like many entities of its kind, LSEZ offers incentives for investors that decide to locate their companies within the zone. However, unlike most of its counterparts, LSEZ doubles up as an investment promotion agency as well as an industrial zone. 

Such an approach helped win it recognition from fDi Magazine, which named LSEZ one of the top 20 zones in the world in its Global Free Zones of the Future 2012/2013 ranking, and the best in Europe for small and medium-sized enterprises in its 2014 Global Free Zones of the Year awards.

“Initially, investors were predominantly interested in getting construction permits and plots. But, what we are seeing more and more is that now they come to us and stay with us because of the business ecosystem that we have created,” says Tomasz Sadzynski, CEO of LSEZ.

Learning curve

A big part of that ecosystem, apart from linking investors with local authorities and with each other during so-called ‘business mixers’, is, according to Mr Sadzynski, connecting companies with potential employees. “Our focus is increasingly on helping investors to find the necessary workforce or [to help with] training,” he says. LSEZ does this by linking its tenants, such as Procter & Gamble, a US-headquartered consumer products giant, and ABB, a Swiss tech firm, with local vocational schools, so that they can train employees for niche roles, such as quality auditor and mechanical engineer. 

It has also worked in partnership with the New Technologies Lifelong Learning Centre (NTLLC), a regional educational entity. LSEZ was the driving force behind the opening of an NTLLC branch in Radomsko, a city 90 kilometres south of Lodz, which opened in February 2014, and it is now working with NTLLC on opening another branch in Kutno, a city 80 kilometres north of Lodz.

In June 2013, LSEZ also branched out into early education, after a private company, which was previously operating the international school in Lodz, pulled out of the city. “Children and their parents were left without a school practically overnight, so we had to act fast,” says Bartosz Rzetkiewicz, LSEZ’s vice-director. LSEZ teamed up with the University of Lodz and within three months they had opened a new school. “It was not easy, but we pulled it off. And it makes sense for LSEZ. Investors want to bring their best managers here, their managers want to bring their families, their families need schools, so here we are,” says Adam Trim, the school’s head. The school currently has more than 50 students between the ages of three and 18.

Forward looking

Apart from its focus on education, what differentiates LSEZ from many other industrial zones is its focus on corporate social responsibility. “[Mr] Grohman’s industrial complex was, from its beginnings, designed as a place where people not only work, but also live. We decided to bring that tradition back,” says Edyta Sancewicz, director at LSEZ’s department of development and strategy. The zone hosts outdoor music festivals in the warmer months of the year, as well as 10-kilometre race, and is home to the Art Zone, an exhibition centre.

While LSEZ’s foundations, and its ethos, are deeply rooted in the past, the facilities that it is marketing to investors are modern production facilities. The zone is divided into 45 sub-zones, spread across the Lodz voivodeship, or administrative zone, and reaching into the nearby Swietokrzyskie and Mazovia regions.

LSEZ has attracted a host of different companies to these sub-zones, from Polish IT firm Ericpol, which purchased land on the site of a former swimming pool on which it built its new headquarters, and Ceramika Paradyz, a ceramic tiles producer that has so far opened five production facilities across the LSEZ sub-zones and is currently working on a modern logistics and trade centre in the area. 

All that in a region that experienced the downsides of economic transformation at their worst. Little wonder, then, that taxi drivers such as Marek are giving the thumbs up to the Lodz turnaround story.