In round two, Paris pulled ahead of other western European cities, being rated first for its economic performance and potential, recent FDI deals, well-educated population, world-class universities, good IT and telecommunications, good healthcare and strong FDI promotion.
The French capital will gain about 5000 jobs as a result of the 137 deals involving foreign investment that were signed in 2004, including a large investment from Korean electronics group LG.
Barcelona was the runner up on the basis of its outstanding quality of life and low wage costs – the judges rated if first in both categories. It is the cheapest of the west European cities that made it into round two, with secretaries earning an average of €10,926 per year, middle managers earning €20,405 per year and manual workers making €7.25 per hour. The judges also awarded Barcelona top marks for executive housing, remarking on the “wide choice of suitable properties”.
Central Europe: BRNO (Czech Republic)
Runner up: Vienna (Austria)
fDi’s judges picked Brno as having the best economic potential in central Europe, predicting that the city’s rapid economic growth would continue. In 2004, Brno’s regional economy expanded by 14.9%, compared with national GDP growth in the Czech Republic of 4.5% over the same period.
One judge said: “Brno has a very fast growing GDP per capita and this bodes well for the city’s economic future.” Brno also scored well on housing. “You’re going to get a lot more for your money in Brno,” said fDi editor Courtney Fingar.
Runner up Vienna impressed the judges with the quality of its investment promotion, its schools, hospitals and transport. Vienna’s business agency is successfully promoting the city as a location for regional headquarters for companies operating in fast expanding east European markets. The success of Austria’s financial services sector in recent years has helped to transform the country’s capital into an international business location.
Eastern Europe: BAKU(Azerbaijan)
Runner up: Vilnius (Lithuania)
fDi’s judges could hardly fail to acknowledge Baku’s economic growth, which is estimated at 18.6% for 2005. Even though the Azerbaijani capital is heavily dependent on oil-related industries for its income (a fact that concerned some judges), other sectors are developing on the back of the oil sector. For example, the city now has one of the largest air cargo terminals in the Commonwealth of Independent States, completed in 2004.
Business conditions are generally thought to be improving. “The fact that company registration [time] has been cut down from 40 days to five days might not be something you want to shout about,” remarked one judge. “But it does show a clear benefit to business.”
Overall, Baku came top in its category for economic potential and location costs, and tied with Vilnius on investment promotion. Vilnius came top in human resources, IT and telecommunications and quality of life.
Northern Europe: LONDON (UK)
Runner up: Copenhagen (Denmark)
London was rated better than other north European cities for the size of its economy, reasonable middle manager costs, number of graduates, quality of universities, mobile phone ownership, internet connectivity, telecoms charges, transport, hospitals, schools, heritage and development projects. The judges were particularly impressed by its major infrastructure and transport improvements.
Copenhagen was a close runner up. “Copenhagen Capacity is a top class [investment promotion] agency,” said one of the judges. The judges were also impressed with the number of jobs created by FDI projects in the Danish capital (about 1000 in 2004) through 58 green field and expansion investments.
The city picked up points for inward investment, rental costs, phone lines per 1000 people, maximum broadband speed and heritage.
Southern Europe: BELGRADE (Serbia & Montenegro)
Runner up: Manisa (Turkey)
Belgrade impressed the judges with its recent high levels of FDI (€788 million in 2004), good human resources, IT and telecoms, transport, housing, schools, hospitals, heritage and incentives. Judges also noted national GDP growth of 8.6% in 2004.
The city’s reputation in the international business sector is growing. fDi editor Courtney Fingar said of Belgrade’s quality of life: “It has got that rich history but still has a modern buzz to it.”
Belgrade’s transport system is improving and the city is building an international cargo terminal to make its airport into an international cargo hub for south-east Europe.
Runner up Manisa scored points for economic performance (particularly the potential for future growth), recent FDI deals, low office rents and wage costs, FDI promotion, FDI attractions and development projects.
REGIONS:
Western Europe: LAZIO (Italy)
Runner up: Eastern Germany
Lazio was the top western European city in round two for GDP growth, inward investment, percentage of the population with a degree, mobile phone ownership, telecoms charges, housing, hospitals and projects.
Current regional projects include a €3bn extension of Rome’s underground railway, a €640m highway crossover, a €613m highway around the Italian capital, a €474m-development of the port of Civitavecchia, and a €350m Rome exhibition and fair district. Civitavecchia’s new €80m logistics interport became fully operational in March.
Runner up Eastern Germany picked up top marks for the size of its economy, economic potential, central office rents, out-of-town office rents, industrial rents, number of recent graduates, universities, phone lines per 1000 people, internet connection, transport, FDI promotion and investment incentives. One judge said: “Investors have found an educated labour force in Eastern Germany at cheaper costs than elsewhere in Europe.”
Central Europe: CENTRAL HUNGARY (Hungary)
Runner up: Greater Zurich Area (Switzerland)
Central Hungary overtook competing regions to become the Central European Region of the Future 2006/07 on the strength of its economic potential, recent FDI deals, low industrial rents, town centre rents and out-of-town rents, number of recent graduates, broadband speeds, transport, housing, investment promotion and three leading investment attractions.
Judges were impressed with Zurich’s quality of life, its 50 museums, 1400 bars and restaurants, and the clean water of Lake Zurich. The Swiss region also picked up points for investment promotion.
Eastern Europe: VILNIUS and KAUNAS Region (Lithuania)
Runner up: Rivne Region (Ukraine)
The Vilnius and Kaunas region took a clear lead in Eastern Europe, dominating the economic performance and potential, human resources, IT and telecoms, quality of life and investment promotion categories. fDi’s judges were particularly attracted by the quality of life in Vilnius and influenced by the fact that it will become the European Capital of Culture in 2009. They also welcomed the region’s attempts to attract FDI with free economic zones such as the Kaunas Free Economic Zone. “It is an encouraging sign,” said one of the judges.
However, Rivne showed a clear lead on location costs and judges noted the rapid growth of light industries in the region, which grew by nearly 75% in 2004. Rivne was also praised for its economic diversity. “Rivne’s promotion strategy may be basic, but at least it has a convincing plan,” said one judge.
Northern Europe: FLANDERS (Belgium)
Runner up: Scotland (UK)
Flanders beat off strong competition to become the Northern European Region of the Future 2006/07, picking up top marks for GDP, inward investment, industrial rents, internet connection, telecoms charges, transport, housing, international schools and promotion strategy. The regional government’s trade and investment division has 80 offices worldwide and a good reputation. One judge said: “Flanders has done well in attracting some of the highest levels of FDI, new jobs and most diversified investments.”
Scotland scored points for good air transport connections. The region’s four main airports offer regular flights to all major European hubs, plus North America and the Middle East. Judges also noted Scotland’s excellent human resources, stunning landscapes and vibrant nightlife. “I can attest to all three,” said Ms Fingar, who awarded top marks for Scotland’s “cheap homes in gorgeous settings”.
Southern Europe: CENTRAL MACEDONIA (Greece)
Runner up: Pomurje (Slovenia)
Central Macedonia won points for strong GDP growth (7.4% in 2004), industrial rents, town centre rents and out-of-town rents, percentage of the working population with a degree (27%), phone lines per 1000 people, mobile phone ownership (97%) and development projects. The region’s highways, railways and airport are undergoing a €5bn improvement programme.
Pomurje picked up full marks for promotion strategy, housing, broadband speeds, internet connection and manual wage levels. fDi editor Ms Fingar gave top marks to Pomurje for both quality of life and affordable housing.
BEST IN CATEGORY AWARDS
CITIES:
Best economic potential: MANISA
Runners up: Hamburg, Baku, Daugavpils and Paris [tied]
Manisa may be only the 12th largest city in Turkey but recent industrial development has shown how smaller cities can build great economies. Judges focused on Manisa’s sustained growth in sectors such as electronics, food, glass, plastic, metals, textiles, automotives, packaging and white goods over the past two decades. The city’s special industrial zone produces 30% of all televisions made in Europe and 65% of all televisions made in Turkey. Foreign investors include Italian white goods manufacturer Indesit, German electrical goods company Bosch, UK packaging company Rexam and Imperial Tobacco of the UK.
Hamburg demonstrated its mighty economic potential: judges noted that it is expanding its international airport and that the city’s port, the ninth largest in the world, was the fastest growing port in Europe in 2004. One judge said: “Hamburg has proved its potential by attracting big investments from major international firms such as Airbus and China Shipping.”
Most cost effective: RIVNE
Runners up: Manisa and Daugavpils [tied]
Rivne in the Ukraine offers some of the lowest secretarial and manual labour costs in Europe. Secretaries earn an average of just €1200 per year, while middle managers earn an average of €3000. However, at just over €1 per hour, manual wages are slightly above the lowest levels in some parts of Europe.
Manisa scored points for both central office rents and out-of-town rents. It also scored points for the low cost of employing managers and manual labourers. Daugavpils in Latvia offers the lowest industrial rents at just €1.5 per square metre per month, compared with about €10 per square metre in some west European cities. It also offers the second lowest secretarial costs, with secretaries earning an average of just €2500 a year, 20 times less than in other cities in the competition.
Best human resources: LONDON
Runner up: Paris
London won the judges’ vote for best human resources. Its 43 universities and higher education colleges produce more than 90,000 graduates each year and include world-class institutions such as Imperial College, King’s College, University College, the London School of Economics and the School of Oriental and African Studies.
Paris and its surrounding region have 17 universities, more than 350 higher education establishments, 134 doctoral schools and almost 1000 research laboratories.
IT and communications: ZURICH and GLASGOW (Scotland) [tied]
Zurich picked up points for its 730 phone lines per thousand people, maximum broadband connection speeds of up to four gigabites per second and call rates to the US from €0.03 per minute. Glasgow scored points for a high level of internet connectivity and low call charges. Berlin offers the lowest call charges and Kaunas City registers the highest level of mobile phone ownership at 117%.
Transport: BARCELONA
Runner up: London
Barcelona attracted the judges’ attention with the 2005 opening of the city airport’s third runway, new terminal, improved road and rail access and expanded air transport zone. The city also has the top port in the Mediterranean and third largest in Europe after Rotterdam and Hamburg. More than one million cruise passengers travel through Barcelona each year. From 2007, Barcelona will be linked to Madrid and Lyon in France by a new high-speed rail service.
The UK capital won points for its five international airports, radial rail and motorway network and orbital road network that provides easy access to the channel ports. London’s five airports welcome more than 120 million airline passengers each year and offer flights to more than 270 cities.
Quality of life: GENEVA (Switzerland)
Runner up: London
Geneva won top marks for its hospitals and international schools. The city has one of the world’s highest concentrations of doctors, with one doctor per 303 inhabitants, and has several world-famous private clinics as well as its two main hospitals.
The city has 289 private schools, including some of the world’s largest and most prestigious, and also the world’s greatest number of international schools per 100,000 inhabitants.
London was the runner up, scoring points for hospitals and schools. Barcelona came third, with judges attracted to its “gorgeous buildings and beaches, active nightlife and highest concentration of trees”.
FDI promotion: DUBLIN (IRELAND)
Runner up: London
This was one of the hardest categories in the European Cities & Regions of the Future 2006/07 competition to judge, partly because of the amount of jargon and acronyms used by investment promotion agencies. The winners were those that had a clear vision and avoided jargon.
Overall, Dublin scored double the number of points for investment promotion than that of its nearest rival, London. Judges gave Dublin City Development Board top marks for investment promotion and for putting forward the most convincing case for the city’s three biggest FDI attractions. Dublin also ranked second after Belgrade for incentives.
London received top marks for recent development projects and the investment fillip given by its successful 2012 Olympic bid. Judges praised the city for attracting 153 new investments in 2004-05, creating a total of 2582 jobs.
The UK cities of Manchester, Dundee and Sheffield were all commended for investment promotion. Judges predicted that Sheffield’s “excellent agency is one to watch for the future” and liked Dundee’s focus on a few key strengths which allows “a small city to punch above its weight”.
BEST IN CATEGORY AWARDS:
REGIONS
Best economic potential: ADANA (Turkey)
Runners up: Cork (IRELAND), Vienna [tied]
Adana picked up points for economic potential and vigorous average GDP growth of about 20% in the past three years for which there is data, reaching €7.3bn in 2004. Adana is the marketing and distribution centre for an area that is dominated by agriculture and related industries. It has attracted a significant inflow of immigrants and its population has risen to 1.85 million in recent years.
Cork and Vienna were runners up, with Cork picking up points for its strong economic potential and Vienna for its track record on recent FDI deals. The Vilnius and Kaunas region in Lithuania scored points for economic potential and levels of FDI.
Most cost effective: RIVNE
Runners up: Alytus County (Lithuania), Zlin Region (Czech Republic) [tied]
Ukraine’s Rivne region was by far the cheapest location for labour rates. Secretaries earns an average of just €1000 a year, middle managers €1400 and manual workers €0.65 per hour.
Alytus County offers low secretarial wages and the second lowest industrial rents in Europe after the Czech Republic’s Moravian-Silesian region. Zlin in the Czech Republic offers the second lowest town centre and out-of-town office rents (after Adana in Turkey).
Best human resources: Scotland
Runners up: Värmland (Sweden)
Scotland’s huge graduate pool and reputation for academic excellence put it top of the regional league for human resources. More than 60,000 students graduate each year from Scotland’s 13 universities, seven specialist higher education institutions and 46 colleges of further education, which include the University of Glasgow, the University of Edinburgh, St Andrews University, the University of Aberdeen, the University of Dundee and Stirling University.
 | Varmland: Lena Melesjo Windahl, mayor of Karlstad, capital of the Varmland region of Sweden, accepts the award for Scandinavian Region of the Future |
Last year, Scientist magazine named the universities of Scottish cities Dundee and Glasgow among the world’s top five best places to work in academia.
Värmland scored points for the high percentage of graduates among its adult population.
IT and communications: WEST HOLLAND (NETHERLANDS)
Runner up: Côte D’Azur (France)
West Holland has more phone lines per 1000 people (950) than any European region in the competition. It also has the highest level of mobile phone ownership at 118.75%. Côte D’Azur has high levels of internet penetration and super-fast broadband speeds in Sophia Antipolis, one of eight French test sites for new technology offering 40 gigabite per second data speeds. Judges also noted that nearly one-third of the foreign companies active in Côte D’Azur are involved in technological enterprises.
Transport: FLANDERS
Runner up: North Rhine Westphalia (Germany)
As one of Europe’s main transport corridors, Flanders has the highest road density in Europe: 63 kilometres per square kilometre. The region’s international airports include Brussels, Antwerp and Ostend, and its ports of Antwerp (the second largest in Europe and fourth largest in the world), Zeebrugge, Ghent and Ostend are seamlessly integrated with the mainland transport infrastructure by high-speed rail and road. From Brussels, it takes just one hour and 25 minutes by train to Paris, two hours and 20 minutes to London and three hours and 45 minutes to Frankfurt. fDi editor Ms Fingar said: “Flanders’ solid air, sea, road and rail services offer investors excellent interconnectivity.”
The judging panel acknowledged the fact that a high proportion of Europe’s major highways, railroads and waterways pass through North Rhine Westphalia, making it a key location in terms of logistics.
Quality of life: Côte D’Azur
Runners up: Flanders and Lazio [tied]
Côte D’Azur impressed the judges with its inspiring natural heritage and good international schools. “It is hard to argue with the fact that the south of France offers a great quality of life,” said Ms Fingar.
Flanders ranked top for international schools and scored points for healthcare. “Flanders is very affordable for western Europe,” said Ms Fingar. Lazio won points for its strong cultural heritage, healthcare and international schools.
FDI promotion: SCOTLAND
Runners up: Lazio, Canary Islands, Central Hungary [tied]
Scotland ranked top in Europe for international investment promotion strategy. The judges also gave top marks for the region’s three biggest FDI attractions. Both Scottish Enterprise and Scottish Development International have built the region’s reputation in research and technology, focusing on strengths in life sciences, financial services, micro-electronics, opto-electronics and communications technologies, energy, and creative industries.
The Canary Islands scored the most points for incentives, Central Hungary picked up points for both promotion strategy and incentives, and Lazio had the best infrastructure and development projects.
Judges also noted Bosnia and Herzegovina’s potential for FDI with the pending privatisation of large state-run commercial enterprises.
