On the site of a 19th-century textile factory is the Łódź Special Economic Zone (LSEZ), a manifestation of the city’s drive to build and maintain a diversified economy following generations of dependence on a single industry. Established in 1998 as an initiative of the Polish government, its 13 square kilometres are divided into 44 sub-zones which are now home to more than 200 companies and nearly 37,000 employees.
Similar to many entities of its kind, LSEZ attracts companies with preferential incentives and tax exemptions. Its tenants encompass a range of sectors with a particular focus on manufacturing, IT services and business process outsourcing alongside pharmaceuticals, packaging and food processing. Big-name tenants include Ericsson, Hutchinson, Fujitsu and Infosys, the last two of which are LSEZ’s biggest employers, with multiple projects in the zone.
Uniquely, LSEZ acts as an investment promotion agency as well as an industrial zone. “Formally we are not a regional development agency, but we act like one,” says director of business development Agnieszka Sobieszk. “In the initial phase of a company’s location analysis, support from local authorities and the stock of businesses around the zone are very important. If the zone says we are here to support you, either through financial benefits or other non-fiscal actions, then we are there for you.”
This approach won LSEZ a place as one of the top 20 zones in the world in fDi’s Global Free Zones of the Future 2012/2013 ranking. In the magazine’s 2016 Global Free Zones of the Year, LSEZ was commended for its education and training support, crossborder collaboration and logistics.
The zone’s greatest assets are its property offers and its people, says Ms Sobieszk. “The real estate and rent offered and the availability of educated staff from local universities, combined with financial incentives, provide a comprehensive package for investors,” she explains. “The co-operation between the companies and the universities is crucial for such projects.” Specialised faculties at the University of Łódź and Łódź University of Technology have designed lectures and projects involving staff from zone residents Fujitsu, Infosys and others, providing a direct pipeline of talent to businesses.
Additionally, Łódź capitalises on its central location, with access to two major motorways and a newly built railway station meaning Warsaw is just over one hour away. In 2015, LSEZ co-founded the LODZistics Business Logistic Network of Central Poland, aiming to develop the region’s logistics potential. The organisation brings together logistics companies, institutions, local government, universities and R&D centres.
Great and small
But the zone is not solely about the big players: smaller entrepreneurs are also being brought into the businesses ecosystem. “We have to think outside the box and offer something more to attract investors, so we focus a lot on employee training and qualification,” says Magda Kubicka, LSEZ development and strategy specialist. “We started the Startup Spark project to combine the potential of young business with the infrastructure and experience of large companies.”
LSEZ currently works with 25 start-ups, commercialising their innovations in collaboration with large business partners such as Procter & Gamble and French packaging company Albea. “We help investors find the best start-ups for their technological needs, and we accelerate them to develop the best solutions to implement into the corporation,” says Ms Kubicka.
The zone’s vast employment potential and outreach to different segments of the community have played a major role in restoring confidence in Łódź, and the investment numbers speak for themselves. “I would say that programmes dedicated to the location and the people, and the improving condition of the city itself, are bringing back life into this previously industrial city,” says Ms Kubicka.