In the past decade, Poland has grown to become one of Europe's FDI superstars. Between 2003 and 2012, the country attracted business from nearly 2000 foreign companies, bringing in more than $79bn in new ventures. According to data from greenfield investment monitor fDi Markets, this ranks Poland fourth in Europe in this time period.
One of the main beneficiaries of this FDI is Pomerania, the region bordering the Baltic Sea in the north of Poland. Between 2003 and 2012, the region attracted $6.5bn in foreign investment, with the majority of investment located in Tri-City, an urban area consisting of the cities of Gdansk and Gdynia and the town of Sopot.
“Why do foreigners choose us? Because we are similar to the Mediterranean coast, just a bit colder,” says Pawel Adamowicz, the mayor of Gdansk, jokingly. Together with his counterparts from Sopot and Gdynia, Mr Adamowicz has held office since 1998, the economic success of the region proving popular with voters. As well as the usual FDI selling points (good location, skilled workforce and access to strategic markets), Mr Adamowicz points to Pomerania's ability to adapt to the changing economic landscape as the main ingredient for the region's strong FDI performance.
Such adaptability is particularly poignant for a region that relies heavily on its shipbuilding industry, a sector that took a heavy hit during Poland’s transformation into a free market economy in the late 1980s and 1990s. “Our shipbuilding industry underwent colossal changes. For example, Remontowa Group [the biggest Polish ship maintenance operation] has entered the very complex field of oil platform modernisation and could soon start producing its own drilling platforms,” says Mr Adamowicz. “And many engineers that could no longer work for struggling shipyards switched to manufacturing yachts and catamarans, a sector that is developing quickly right now.”
Local rivalries can often strain neighbourly relations. While mayors and civic leaders the world over may declare their admiration for neighbouring cities, the reality is that they are often keener to forge agreements with places located thousands of kilometres away.
Tri-City is a no stranger to such local rivalry, as residents of Gdynia – who are known as 'herrings' to residents of Gdansk because of the city’s coat of arms featuring two fish – can confirm. Yet this rivalry does not prevent the launching of municipal projects between the three areas.
“There are a number of projects that we have either recently finished or are currently developing together,” says Gdynia mayor Wojciech Szczurek, citing initiatives such as the implementation of Tristar, an integrated traffic management system, and Metropolitan Rail, an intracity communication link between Gdynia and Gdansk.
Jacek Karnowski, the mayor of Sopot, points to Ergo Arena as an example of recent co-operation between his city and its neighbours. The multi-purpose indoor hall was completed in 2010 at a cost of $80m. “Not only do we co-finance and co-manage the arena with Gdansk, but we actually moved our border, so half of the building is located in Sopot and the other half in Gdansk,” says Mr Karnowski.
The co-operation between the cities goes beyond civic matters. Tri-City municipalities usually represent the region jointly at conferences and fairs. “We are, together with Gdansk and Sopot, shareholders of the Pomerania Regional Tourist Organisation and we collaborate through that entity, promoting the region domestically and internationally. We also work together with [investment promotion agency] Invest in Pomerania to develop foreign investments in the region,” says Mr Szczurek.
Differing focal points
Neighbouring cities often have similar economies and skill sets, and as a consequence compete for similar investment types. Not so in Tri-City. Sopot caters for completely different types of business from Gdansk and Gdynia. This is essential, given the fact that it has a population of only 38,000 people, six times fewer than Gdynia and 12 times fewer than Gdansk.
Sopot, an affluent resort, is known nationally for its nightlife. Mr Karnowski says that his city embraces this role, rather than pretending to be a tech cluster in disguise. “We do not want to be associated exclusively with dance clubs. Sopot is a happening place when it comes a broad spectrum of musical and sporting events,” says Mr Karnowski. He adds that there is still a lot of business opportunities connected with Sopot's role as a leisure hub. “We are a place where you come to relax, but also where the biggest conferences in the country are organised. For that reason, we are still seeking investments in our hotel infrastructure,” he says.
There is more room for competition between Gdansk and Gdynia, as both cities position themselves as destinations for business process outsourcing (BPO) and shared services centres (SSC). More than 13,000 people work in 40 BPO/SSC ventures in the Tri-City area. Yet, Gdansk and Gdynia seem more set on fighting for investments with other Polish cities with significant BPO clusters, such as Kraków, Poznań and Wroclaw, rather than with each other. These joint efforts were recognised earlier this year at the Polish Outsourcing and Shared Services Awards. Its judging panel awarded Tri-City the title for BPO/SSC City of the Year.
In the past year, companies such as German pharma giant Bayer, UK insurance company Prudential and Finnish chemicals firm Kemira have invested in BPO operations in Pomerania. And in May 2013, Gdynia celebrated the opening of Pomerania Science and Technology Park, the biggest blue-chip campus in Poland. The park was built at a cost of $65.5m and can accommodate up to 300 companies and 2000 people. At the time of opening, 85% of the office space was already leased.
“We have many investments in the [BPO/SSC sector], but we can still accommodate many more, as we have sufficient office space available,” says Mr Adamowicz.
But, according to Gdansk's mayor, foreign investors value Tri-City not only for its business aptitude, but also for the quality of life. Being close to the sea is a luxury not many cities in Poland can boast. "When it comes to quality of life, our natural surroundings definitely help," says Mr Adamowicz. “We have many businessmen from the Netherlands, France and also Spain. Foreigners come to Pomerania and are not only successful when it comes to business matters, but also enjoy living here."