Kaunas — An Emerging Destination For Shared Services In CEE

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Kaunas, Lithuania’s second largest city, has historically been a leading centre of the country’s economic, academic, and cultural life. Now Kaunas is in the spotlight as the city was heralded as the Emerging City of the year in Central and Eastern Europe during the recent Shared Services And Outsourcing Awards. Emerging Europe spoke to Visvaldas Matijošaitis, Mayor of Kaunas, about the city’s strengths and prospects for future growth.

A 200 per cent increase in SSC/BPO projects and a 450 per cent growth in new jobs — how did the city of Kaunas manage to achieve so much in such a short time?

They are great figures, of course. But if we take into account the fact that Kaunas has the second fastest Internet speed in Europe with an average data transfer speed is 40.61 Mb/sec, the third best broadband quality in Europe and the third one globally we see why SSC/BPO projects are coming to the city and why more and more jobs are being and will be created.

Kaunas is often referred to as a city of students. What talents can investors find in the city?

There are six universities and 48,500 students in Kaunas and the area: Kaunas University of Technology, Kaunas Vytautas Magnus University, Lithuanian University of Health Sciences, ISM University of Management and Economics, Aleksandras Stulginskis University, Lithuanian Sports University. Kaunas University of Technology awards Bachelor’s, Master’s, and Doctoral degrees in technological sciences, physical sciences, social sciences, humanities, biomedical sciences, arts, where students can choose from 58 Bachelor’s programmes, 68 Master’s programmes and 17 scientific fields of Doctoral studies.

The Lithuanian University of Health Sciences is the largest institution of higher education for biomedical sciences in Lithuania, successfully integrating studies, research and clinical practice. LSMU consists of two main academies: Medical Academy and Veterinary Academy. Students of medicine, odontology and nursing gain their practical skills at the Hospital of the Lithuanian University of Health Sciences, which is the largest medical institution in the Baltic States. More than 1,200 highly qualified doctors and 2,400 members of the nursing staff take care of over 78,000 patients at the LSMU Hospital each year.

Summarising it is possible to emphasise that investors will find well educated engineers, medical doctors, as well as business managers and sport coaches among graduates of the Universities of Kaunas.

It is said that a quarter of the Lithuanian population has left the country since 1990. Do you regard it as a challenge in Kaunas?

Kaunas has been affected by such natural changes in population. The latest figures show there are 302,700 [a 20 per cent decrease compared to 2001]. The policy of the municipality is to provide high quality public services for the citizens and help create new jobs, establish SMEs oriented to smart business, technologies and innovation. The city’s advantages like access and mobility, multimodal logistics, information technology, high quality of life and working places could influence the decision of remigrate back and to choose Kaunas as a place to live.

What is the city’s strategy to attract foreign investors?

The city uses available instruments to show advantages of Kaunas: we participate in exhibitions such as MIPIM in Cannes, France, where Kaunas recently presented public and private projects that will be implemented; we prepare and distribute promotional materials about successfully implemented projects, which was partially financed by the ERDF (sport Arena for 15,000 spectators, swimming pool for international competitions, renovated streets, schools, kindergartens and social institutions; we offer more services in public transport; we take part in conferences, tourist exhibitions, meetings with prospective investors and we cooperate with state institutions, such as Invest Lithuania.

When completed, the Kaunas Public Logistic Centre, located at the intersection of European and Russian Rail gauges, will attract more investors in logistics, similarly to the Free Economic Zone near the International Kaunas airport, which passenger carrier Ryanair selected as its base in the eastern part of Europe.

The business valley Santaka addressed to scientists and business companies was opened last year and may affect the investment attractiveness of Kaunas as well.

What are the current plans of the city’s further development?

There are some major tasks that we face in order to increase the city’s economic prosperity. We want to create an investment-friendly business environment, facilitate the development of knowledge-based economy, increasing the attractiveness of Kaunas as a logistics city, develop the public tourism infrastructure and develop Kaunas as one of Europe’s health centres.

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