Inward investment attraction is job number one for national investment promotion agencies around the globe. But what happens when major companies in a nation or region assume that mantle? We’ll soon find out.
At the World Economic Forum in Davos, Switzerland (above), in January, representatives of 12 Central and Eastern Europe (CEE)’s biggest and most dynamic companies signed a memorandum establishing the Business Council of Growing Europe. The objective is to promote Central and Eastern Europe as an attractive investment destination for global investors and encourage cooperation between business leaders of the region. Warsaw, Poland-based PZU Group, the largest insurance company in the region, initiated the Council, which is embraced by 11 other founding companies from CEE.
The motto of the Business Council is “Growing Europe” to emphasize the key feature which the 11 CEE countries have in common: stable growth. The memorandum establishing the Business Council was signed by 11 international companies originating from Central and Eastern Europe, including: PZU, Banca Comercială Română, Bolt, Bulpros, Exponea, Gedeon Richter, OTP Bank, Pekao SA, Prezi, Riko Group, Triglav Group and UiPath.
Signing of the memorandum took place in the presence of Andrzej Duda, president of the Republic of Poland; Kolinda Grabar-Kitarović, president of the Republic of Croatia; Egils Levits, president of the Republic of Latvia; Jüri Ratas, prime pinister of the Republic of Estonia; Georgette Mosbacher, ambassador of the United States to the Republic of Poland; as well as representatives of business and think-tanks, including John Rogers, vice president, Goldman Sachs; David McCormick, co-CEO, Bridgewater Associates; Karan Bhatia, vice president of government affairs and public policy, Google; and Fred Kempe, president and CEO of the Atlantic Council.
High-Tech Hub, or a Larger One
The objective of the Council is to promote Central and Eastern Europe as an attractive destination for global investors and to present the region as a development hub of high technology, a booming destination of investments in infrastructure and renewable energy sources. According to the memorandum, the participants will organize joint events promoting the region, take part in panel discussions and meetings at leading economic conferences and events, participate in the activity of working groups and partner with consultancies.
“The region is well positioned to become the most attractive investment destination both in Europe and globally,” said PZU CEO Paweł Surówka. “It offers economic, political and social stability while generating stable economic growth throughout economic cycles. By joining our forces, we can raise awareness about the dynamism, entrepreneurship and innovation of this part of Europe. From now on, Central and Eastern Europe has a Business Council, it has a voice, it has engaged business leaders who want to work for its promotion together.”
“We believe that the CEE region offers great investment opportunities at the global level, but it is currently too fragmented to successfully compete for capital on the global level,” said Andrej Slapar, CEO of Triglav Group. “Therefore, we support all activities aimed at unifying and increasing the promotion of the region, and establishing closer business ties. We find this new initiative — Growing Europe — to be an important step toward those goals.”
Added Vargha Moayed, Chief Strategy Officer at UiPath: “Fostering digital transformation and ensuring a trustworthy deployment environment for artificial intelligence and business automation have never been higher on the European Commission’s agenda as they are now. This technology will have far-reaching impacts on the way we work, and we at UiPath believe we have an obligation to the CEE and the rest of the world to support the future of work. We are proud to be a founding member of this initiative and look forward to working with its other founding members to successfully transform the CEE into a hub for future digital growth.”
Out from the Shadows
The transition of Central and Eastern Europe has been unprecedented, the Council pointed out. Within only 30 years, the countries previously cut off by the Iron Curtain have become full-fledged members of the European Union, NATO and the World Trade Organisation. After joining the global free market with a burden of the centrally planned system, their economies have become a key driver of EU’s growth, as attested by macroeconomic statistics.
The combined GDP of the 11 countries in the Three Seas Region (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Romania, Slovakia, Slovenia) is close to €1.2 trillion. The countries of the region generate 20% of EU’s economic growth. Foreign direct investments in CEE were equal to only 2% of EU FDI in 2015, rising to 15% in 2018, a 7.5-fold increase within three years.
Another strength of the region is the potential of its population, currently totalling 100 million. A high percentage of the professionally active population aged 25-64 in the former Eastern Bloc countries of the Three Seas region has higher education, representing the region’s huge human potential. Poland alone ranks above Spain or Italy as measured by the combined number of STEM (Science, Technology, Engineering, Mathematics) graduates.