Do you know?

Warsaw, the capital of the biggest country in the Central Europe, where 40 million people live, is an investor-friendly city. Warsaw is a good place for investment becuase the political, cultural and economic role of Warsaw makes it an attractive town.

44 companies - more than for any other city - to locate in Warsaw in the next five years

Nearly a fifth of companies (18 per cent) plan to relocate or outsource their European activities to another country over the next two years, with Central and Eastern Europe being the favoured destination, and India and China the top destinations outside Europe.

"The corporate world of the 21st century is mobile. The cities of Europe need to be aware of this, and to create more favourable conditions just to hold on to existing investment - let alone to attract new investment," says David Hutchings of Cushman&Wakefield (C&W), which operates the European division of global property consultant Cushman & Wakefield.

The findings are revealed in European Cities Monitor, an annual survey carried out by C&W/H&B since 1990. ECM is based on interviews with senior managers and board directors of 500 of Europe's top companies. It looks at issues regarded as important by companies when deciding where to locate, and then compares how Europe's leading business cities perform on each issue.

Key factors that those interviewed say need addressing in Europe's cities are all to do with improving communications. Top comes public transport within cities, followed by traffic congestion and transport links with other cites.

26 per cent of companies have already outsourced European activities to another country in the past three years. Central and Eastern Europe has been the most favoured destination. "Companies are attracted by the proximity of Central and Eastern Europe, the region's relatively low cost of office space, and a skilled and relatively low-cost labour force," says David Hutchings.

Hot on the heels of many of the countries in the region joining the European Union (EU) earlier this year, European-based companies are not only looking at Central and Eastern Europe as an outsourcing destination, but also to open offices there. Warsaw is the city that can expect the biggest influx of companies over the next five years, followed by Moscow, Prague and Budapest. In Western Europe, Paris comes top.

"The tendency to open offices in Central and Eastern Europe will continue for a few years yet," says David Hutchings "EU membership of countries including Hungary, Czech Republic and Poland has meant however a spread in focus to the countries further east, such as the region's largest country, Russia, as companies search for new low-cost production areas and new markets. The only cloud on the horizon for these cities could be the advance of Asia with its even lower cost base."

Outside Europe, the list of favoured cities for opening an office over the next five years is dominated by Chinese and Indian cities, apart from New York. Top comes Shanghai, then Beijing, New York and New Delhi, with Mumbai in joint seventh place.

For the first time in the survey, 'competition from Asia' was cited as the factor likely to have the greatest impact on business over the next ten years, having overtaken the two other top factors - the enlargement of the European Union and the performance of the US economy.

"Asia has two of the world's fastest growing economies, China and India, with a combined population that accounts for more than one in three people on the planet," explains David Hutchings. "Companies from around the world are setting up in these two economies, attracted by the low costs and increasingly skilled labour forces, and also to capture market share as the economies open up and develop at a rapid pace."

European Cities Monitor produces an overall ranking of the 30 best cities for business in Europe. In the 2004 survey: • London, Paris and Frankfurt retain their position as the top three business cities. • Barcelona and Madrid, at 6th and 7th, close the gap on Brussels and Amsterdam marking the continuing upward advance of these two Spanish cities. More than any other city in Europe, these two cities are perceived to be improving themselves as business locations. "The rise of the Spanish cities shows a clear link between a city perceived to be doing the most to improve itself and the perception that that city is a good location for business," says David Hutchings. • Top risers include: Munich (overtaking Berlin and Milan to come 8th), Prague (four places to 13th), Stockholm (three places to 15th), Warsaw (two places to 20th) and Vienna (two places to 22nd).

The overall city ranking is compiled from the individual city scorings on 12 different location-oriented factors. The interviewees were asked to rank the importance of each factor. They chose 'easy access to markets' as the most important factor. "Communication factors continue to be very important, as well as the availability of qualified staff. Cost factors are ranked behind these, with quality of life issues rated as the least important," says David Hutchings.

London dominates many of the rankings - ease of access to markets, qualified staff, external transport links, telecommunications, languages spoken, availability of office space (knocking out Berlin from last year's top spot) and internal transport (leapfrogging Paris). The city also performs better for 'quality of life', moving up from 16th to 9th place.

For other factors:
• Warsaw comes top for low cost of staff and best value for money of office space.
• Dublin for climate created by the government.
• Barcelona for quality of life of employees.
• Stockholm for freedom from pollution (leapfrogging Oslo).

Another new question for this year focused on the best European cities for conferences and exhibitions - Paris came a clear top, followed by Frankfurt and London in joint second place.

This year Warsaw moves up in the following categories:
• The best cities to locate a business today - from 22nd place in 2003 to 20th place in 2004 (in 2002 Warsaw was on 26th place)
• Best cities in terms of value for money of office space - from 7th place in 2003 to 1st place in 2004
• Best cities in terms of qualified staff - from 26th place in 2003 to 16th place in 2004
• Best cities in terms of external transport links - from 26th place in 2003 to 24th place in 2004
• Best cities in terms of the climate governments create - from 5th place in 2003 to 3rd place in 2004
• Best cities in terms of languages spoken - from 22nd place in 2003 to 21st place in 2004
• Best cities in terms of availability of office space - from 10th place in 2003 to 8th place in 2004
• Best cities in terms of internal transport - from 28th place in 2003 to 27th place in 2004.

This year Warsaw moves down in the following categories:
• Best cities in terms of quality of telecommunications - from 25th place in 2003 to 26th place in 2004.

Warsaw still occupies the 1st place in terms of low cost of staff, the 18th place in terms of easy access to markets, the 27th place in terms of freedom from pollution and 29th place (ex aequo with Moscow) in terms of the quality of life for employees (Barcelona is on the 1st position in this category).

Familiarity with cities as a business location was also an important factor. 27% of companies knows Warsaw, 44% knows Prague and 28% Budapest. London is known by 90% of interviewed companies.

Cities promoting themselves best to attract inward investment: Barcelona, London, Paris, Dublin, Madrid, Prague and Warsaw. Cities doing the most to improve themselves: Barcelona, Madrid, Berlin, Prague, London, and ex aequo Lisbon and Warsaw.

source: Cushman & Wakefield - Warszawa

<<back