The Judging Panel

Votes for rounds two and three were cast by members of fDi’s editorial team as well as by the following independent guest judges:

	Peter Lemagnen, director, Oxford Intelligence
	Peter Bishop, committee chairman, World Chambers Federation
	Mark Soden, country manager, Spengler Fox

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EUROPEAN CITY OF THE FUTURE 2006/07:


LONDON


 Buoyed by its winning Olympic bid, London has begun a period of massive reinvestment. Economists predict that the UK capital’s 2012 Olympics could boost the city’s gross domestic product by an additional €8.7bn. One judge on fDi’s panel said: “You have to take into account the economic potential created by an event of this size.” London is expected to spend about €14.5bn on infrastructure to host the games. Roughly €10.4bn of that capital investment is earmarked for transport infrastructure alone. Heathrow’s new Terminal 5 is due to open in 2008, built at a cost of €3.75bn, allowing an additional 30 million passengers to use the airport each year. The UK section of the Channel Tunnel Rail Link is also due to open in 2007, having cost €15bn. Other large developments include the go-ahead to transform the derelict Battersea Power Station into an international showcase for the UK’s creative industries.

London led round three of the competition for IT and communications, and also quality of life. It ranked top for infrastructure and development projects, heritage, international schools, hospitals, telecoms charges, internet penetration and universities.

The UK capital is served by a fast-growing number of low-cost airlines and all major airlines. Its five international airports are among the world’s busiest, handling more than 120 million passengers a year. The city has also begun to reinvest in its dated rail and underground infrastructure, and now has 570 railway stations and 275 underground stations.

London also won the judges’ vote on medical care, largely for its 75 public sector hospitals, 46 private sector hospitals and 10 medical universities. The city has more than 40 international schools, 43 universities and higher education colleges, 300 museums and 200 theatres. More than one-third of the city’s land space is made up of parks and green spaces.

Further confirmation that London is currently Europe’s hottest business location comes from Ernst & Young’s most recent European Investment Monitor, which again ranked the city as the most popular business location. The report detailed 153 new investment projects creating more than 2500 jobs in 2004-05, up 37% on the previous year.

Runner up: Paris

Paris ranked a close second to London, just two points behind. “With 137 FDI deals signed in 2004 creating up to 5000 jobs, Paris is obviously getting it right with foreign investors,” said one of the judges.

France’s capital city led round three of the competition for its overall FDI promotion and scored well on transport, coming a close runner up to London. The city’s two international airports, Paris Charles de Gaulle and Paris Orly, and 12 business and general aviation sites make it Europe’s second most popular air-transport hub for passenger traffic and third for cargo and mail. High-speed trains connect Paris with major European cities, such as London (two hours and 35 minutes) and Brussels (one hour and 25 minutes).

During the past six years, Paris has spent in the region of €3bn to develop its inner-city railways, metros and tramlines (the EOLE Regional Express Railway, the Météor line, the Orbitale beltway through the suburbs, and expansion of the city’s metro lines and tram lines), and nearly €1bn on road and motorway development, including La Francilienne highway, which circles Greater Paris.

Like London, the French capital offers excellent human resources. It has 17 universities, more than 350 higher education colleges, 134 doctoral schools and nearly 1000 research laboratories.

Paris scored top marks for marketing and scored well for economic performance and recent FDI deals. The judges particularly liked the city’s focused promotion strategy to encourage research and development investment in specific clusters, such as life sciences, digital technologies, complex systems design and management, and the automotive industries.

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EUROPEAN REGION OF THE FUTURE 2006/07:

VILNIUS and KAUNAS region

Two fast-changing regions dominated the European Regions of the Future 2006/07 competition from the start: the Vilnius and Kaunas region in Lithuania, and Central Hungary. But in round three, Vilnius and Kaunas won on the strengths of economic potential (one point ahead of Central Hungary), location costs (by far the cheapest of all the locations in round three) and exceptional FDI promotion.

Vilnius & Kaunas: Mayor of Vilnius Arturas Zuokas and Saulius Lukosius, head of strategic planning for Kaunas municipality, accept the award

Judges gave Vilnius and Kaunas top marks for the volume of recent FDI deals, with investment of just under €4bn in 2004. One judge remarked: “Vilnius and Kaunas has shown strong economic progress, achieving GDP growth rates above 8% in the past few years.”

Both Vilnius and Kaunas and Central Hungary registered 8.4% GDP growth in 2003, and the judges gave both regions top marks for economic potential and for recent investment deals.

Vilnius and Kaunas, however, had the lowest industrial rents, the lowest middle management and secretarial costs, and the lowest manual labour costs of any round two region. With the rapid pace of economic development, wage levels are likely to rise but, for the moment, manual workers earn less than €2 an hour. Average industrial rents have remained low at just over €3 per square metre per month – less than half that of some other round three locations.

Vilnius and Kaunas had one of the highest mobile phone ownership ratios in Europe at 107% of the adult population. fDi’s judges also gave top marks to the Lithuanian region’s infrastructure development and three FDI attractions.

Vilnius has already invested €130m of a €800m investment plan to revitalise the city centre. Other large-scale projects include a €60m 26-hectare shopping and entertainment complex in Kaunas and the building of a new 12,000-seat arena.

Runner up: Central Hungary

Central Hungary won top marks from the judges for economic development and potential. The region has a strong reputation for the availability of well-qualified labour, good logistics, good quality of life and an advanced R&D base. In round three of the European Regions of the Future competition, Central Hungary ranked top alongside Vilnius and Kaunas for both economic growth and FDI deals. Just over 100 FDI deals were signed in 2004, including €100m-plus investments from French telecoms and construction group Bouygues and Japanese high-tech manufacturing firm Ibiden.

Central Hungary also boasts the highest number of students, about 45,000 of whom graduate each year from the region’s 14 universities and 21 colleges. The region’s reputation for R&D is well deserved: there are more than 1255 public and private R&D units. Samsung, Ericsson, IBM, Nokia, Cisco, SAP and Tata Consulting all have R&D units in the region.

Central Hungary: Gyorgy Retfalvi, chief executive of ITD Hungary, and Tamás Lukovich, managing director of Pro Regio Central Hungary regional development agency, collect Central Hungary’s award for overall runner-up for regions and Central Europe Region of the Future

Central Hungary has the highest broadband connection rate of any round three region and, according to the judges, offers the best investment incentive package, including a reduced corporate tax rate of 10%. The region offers grants for companies that invest in high-tech manufacturing, regional headquarters, R&D, and information and communications technology.

The region’s high level of job creation and FDI stock per capita also helped it to win judges’ votes. Property is still relatively cheap – compared with prices in western Europe – including prestigious locations overlooking the Danube and parliament buildings.

ROUND TWO WINNERS

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METHODOLOGY

The competition for European Cities & Regions of the Future 2006/07 was held in three stages. In part one, regions and cities were invited to put forward bids to be selected as the best location in their country or region (UK, Benelux, Greece, etc). In round two, winners of the first round competed in five broader geographical
categories: northern Europe, eastern Europe, western Europe, central Europe and southern Europe. In round three, the best locations in Europe went head to head for fDi magazine’s top awards: European City and European Region of the Future 2006/07. Awards were also given for the best locations in each individual category (most cost-effective, best promotion strategy, best economic potential, etc).

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CATEGORIES& CRITERIA

Economic potential

• Economic potential [judged]
• GDP
• GDP growth
• Level of inward investment
• FDI deals [judged]

Cost effectiveness

• Out-of-town office rent
• Centrally located office rent
• Industrial rent
• Secretarial salaries
• Middle management salaries
• Manual labour rates

Human resources

• Universities [judged]
• Number of 2006 graduates
• Percentage of population with a degree Transport
• Transport [judged]

IT and telecommunications

• Phone lines per 1000 people
• Mobile phone ownership (% of population)
• Broadband connectivity (% of population)
• Maximum broadband speed available
• Telecommunication charges

Quality of life for expatriates

• Housing [judged]
• Hospitals [judged]
• International schools [judged]
• Natural and cultural heritage [judged]

FDI promotion strategy

• Promotion strategy [judged ]
• Three biggest attractions for FDI [judged]
• Incentives [judged]
• Infrastructure and urban planning projects [judged]