Business Journal YOUR BUSINESS INTELLIGENCE AND NETWORK PARTNER
| Official Newsletter of the Municipal Investment and Development Arena 2015 | March 2015 | No. 01 |
South East Europe Regional Conference - How to make society in the region more innovative, competitive and self sustainable in both local and global markets.
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n March 2015, The European Bank for Reconstruction and Development (EBRD) and Infoarena Group, under the sponsorship of the city of Zagreb, are organising the first conference of capital cities of Southeast Europe in Zagreb, Republic of Croatia - Municipal Investment & Development Arena 2015! City of Zagreb has decided to host this event from 16th - 17th March 2015 in the modern setting of the Museum of Contemporary art! (http://www.msu.hr/) THE OBJECTIVE OF THE CONFERENCE is to present the potential for busi-
ness to investors, both private and public sector, in co-operation with cities and that cities exchange their experiences of development and investment in the region. The Conference aims to make cities more efficient and competitive and to establish an initiative regarding permanent co-operation between capital cities and other
developed cities in the region. The goal of this initiative is the development of the major cities and society. The Conference wishes to attract potential investment and to stimulate further growth of cities and the competitiveness of the region as a whole. The capitals of SEE can and must be the leaders of the economy and the development of society in their country and the whole region. Some of these cities are
already in the EU, and it is expected for the others to be accepted around 2021, so this conference is a great opportunity for the leaders of the cities to exchange experiences and overview the potential for co-operation. In the capital cities of Southeast Europe, in fifteen countries, there are over 17.730,000 people and the GDP per capita is €18,725. THE CONFERENCE SERVES as a place
TOPICS OF THE CONFERENCE WOULD COVER:
1.How municipalities can attract investment 2.Effective management and development of the municipalities 3.High Level Debate on Development of capitals 4.Representation of projects 5.Presentation of Investment and Development plans for next 4 years for larger cities in the region
for dialogue between the public and private sector, with the aim of making the entire region competitive both on the European market as well as globally. IT BRINGS ALL THE LEADERS of both public and private sectors, to one place and gives them the opportunity to exchange their views. It provides all participants with a chance to gain insights into the full potential of the market and incorporate their business into it.
<p.02> SANDRA ŠVALJEK
<p.03> DAVOR INĐIĆ
<p.06> TOMISLAV GAVAZZI
City can certainly influence the ease of doing business in Zagreb
EBRD invested around €350 million in urban infrastructure sector in Croatia
Our aim is to make the entire region competitive on global markets
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Sandra Švaljek, deputy mayor of Zagreb
The City can certainly influence ease of doing business in Zagreb
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an the City Administration affect the economic activity in Zagreb and Croatia and in what way? Zagreb is the biggest urban agglomeration in Croatia and as such, is also the centre of its economic activity. The size of Zagreb’s population is around 18% of the total population of Croatia, but approximately as much as one third of Croatian Gross Domestic Product is generated in Zagreb. Therefore, the importance of Croatia’s capital in overall economic activity in the country is crucial. The City Administration cannot, for obvious reasons, affect the general business
climate and macroeconomic environment that is determined by national economic policy. However, the City can certainly influence the ease of doing business in Zagreb. The City Administration can and is doing its best to provide high quality communal infrastructure to businesses and to be as efficient as possible when it comes to issuing various licenses. Zagreb has also an active role in stimulating artisans and small and medium enterprises through a package of support measures and by offering free of charge information, consultancy and education within its Entrepreneurial centre. The City Administration is actively seek-
ing new investors and assisting foreign investors in their attempts to invest in Zagreb. Through its Technology Park, Zagreb offers office space and advice to start-ups, and organises an annual startup conference ‘Zagreb Connect’ where local and regional start-ups first get advice from experienced mentors and investors, and then compete for attractive prizes. What are the main advantages of the City of Zagreb as a location for foreign direct investment? When compared with the capitals and larger cities in the wider region, there
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are some pronounced advantages of Zagreb as an investment location. Zagreb’s geographic position is favourable as it is located at the junction of the two panEuropean corridors. From Zagreb, it is easy to reach both the cities of Central and Eastern Europe and those in nonEU countries like Serbia and Bosnia and Herzegovina, whilst the Adriatic coast is only one hour away by car. Zagreb has highly educated and skilled labour force thanks to the University of Zagreb as well as the growing number of private schools. In Zagreb, labour costs of employees in high-tech sectors are relatively low in comparison to Central and Eastern Europe. It is to be emphasised that the foreign language proficiency of the people of Zagreb in their prime age is remarkably high. Due to its numerous parks, sports facilities, vivid cultural scene and good communal services Zagreb is considered to be highly liveable city. In addition, and what could be important for the foreign investors, the presence of foreigners is well perceived well by the people of Zagreb. What are the most important obstacles to investment in Zagreb? Investors who wish to buy attractive areas of land due to their intention to construct real estate in Zagreb might face difficulties due to unclear and unresolved property rights. Once investors buy land, construction may be blocked or prolonged due to the stringent or unclear rules related to spatial plans and zoning. The City Administration is aware of those weaknesses and is making great efforts to diminish them. Could you name some of the important development projects that are to be initiated this year? Currently, the City Administration is devoted to the preparation of several large infrastructural projects, intended for cofinancing through the European structural and investment funds. The most important is modernisation of water supply system, and the construction of a waste management plant. New projects in the area of public urban transportation are also underway – from the construction of new roads and roundabouts, to a light rail link connecting Zagreb to the new airport, a new Sljeme cable car, and cycling route along the bank of the Sava river.
Zagreb will soon launch several projects in the area of energy efficiency. The first is the enhancement of energy efficiency in 87 buildings intended for public use (e.g. kindergartens, schools, elderly homes etc.). The second is the deep retrofit project of multi-compartment buildings in the city centre, and the third is the energy renovation of dozens of sports centres using the ESCO model. In 2015, the City is also engaged in facilitating two relatively big projects that are intended for private sector investment, and which imply the activation of attractive areas of land owned by the City. One project is the construction of the so-called ‘Badel Block’, i.e. the block of mixeduse buildings in the very centre, and the second is the development of a spa and wellness area that would make use of geothermal wells at the southern entrance to Zagreb. How do you see the future development of the City of Zagreb? In the economic sense, Zagreb has undergone a tremendous transformation in last two decades. Once, manufacturing was the cornerstone of Zagreb’s economy and the industry was located even in the very centre of the city. Nowadays, manufacturing is replaced by financial institutions, a strong retail sector, companies in the IT sector and higher education and research institutions. In addition, Zagreb is becoming more and more attractive for tourists, and therefore hotels and restaurants are growing in number and quality. These economic developments indicate future requirements for the business infrastructure and development projects that would make the best use of the already revealed advantages of the city. There are relatively big and centrally located parts of the city that were previously occupied by industrial estates, but are now empty and devastated. These large areas of land, if adequately developed, can become Zagreb’s new centres of business activity. The City Administration has already initiated the process of development of the Zagreb Fair Area, that should become an innovative urban district whose main pillars would be the Fair and exhibition centre, a conference centre, a technology park and science museum. The second brownfield area the City intends to develop is Gredelj. There, the old industrial buildings should be transformed into the co-working space for business belonging to the creative industries, as well as into the new scene of the Croatian National Theatre.
Dr. Gábor Bagdy RICS, Deputy Mayor of Budapest is a panellist on Roundtable 3: High Level Debate on Development of capitals
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udapest, the capital of Hungary and its largest city. It is the centre of Hungarian politics, culture, industry, trade and the logistical hub. The Budapest metropolitan region includes 81 municipalities, with a total population of 3.1 million. Budapest is among the 100 most productive cities in the world in terms of GDP. It produces almost 40% of Hungary’s GDP with only 18% of its population. For every 100 Hungarian companies with a foreign interest, 54 are based in Budapest. 90% of international money transfers and 60% of all real estate, advertising, financial consulting services in Hungary are performed in Budapest. Trade and logistics are also important industries in Budapest. Tourism is a very important part of the service sector for Budapest. More than 1,000 restaurants, cafes, bars and clubs await the 2.7 million tourists who choose Budapest as their destination every year. The city ranks 37th among the world's top 100 most visited cities. It is one of Europe's most popular destinations for shopping tourism; the city has the most shopping centres in Central and Eastern Europe. Budapest is home to several World Heritage sites, including the Danube Panorama, the Buda Castle Quarter, Andrássy Avenue and Heroes' Square, and has the 2nd oldest underground railway in the world, the Millennium Underground Railway. Budapest is the only capital city with thermal spas in the world, and has world's largest thermal water cave system. It is also home to Europe's largest synagogue, the Great Synagogue and the world's 3rd largest Parliament building, the Hungarian Parliament. The Emerging Markets Index ranks the city in 3rd place (of 65 cities), as Central Europe's most liveable city. Forbes’ magazine ranks Budapest in 7th place as one of the most idyllic European cities. “UCityGuides” ranks Budapest 9th on the most beautiful cities in the world list.
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Davor Inđić, Senior Banker, EBRD
EBRD invested around €350 million in urban infrastructure sector in Croatia companies. Hence, EBRD assists cities and their companies through Technical Assistance programmes in promotion of their operation and creation of additional capacities in order to ensure further growth and, eventually, enhancement of services provided to the public, which is fundamental. We are aware that this aspect of improvement and promotion of business activity in the local utility sector has ample growth potential.
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hat are the most significant advantages and disadvantages of investment in urban infrastructure concerning EBRD and/or investors? Cities have vast potential for investment. Cities and municipalities are directly responsible for all the utility services, urban transport and municipal waste, to name a few. Investment requirements in these sectors are immense. Moreover, cities directly impact on potential private investors through GUP (General Urban Plan), through their growth strategies and utility fees (local taxes), to name a few. It is clearly visible in case of successful cities where private investment is implemented also in the urban public sector. On the other hand, there are cities facing stagnation. The local government ability to attract investment, primarily through EU funding, will eventually be fundamental.
How does EBRD provide support to urban infrastructure investment and what are the specific features of EBRD involvement in this sector? EBRD has been active in this sector in Croatia since 1996. In addition, EBRD has been co-operating with local governments for 20 years and has thus far invested around €350 million in urban infrastructure sector in Croatia, providing support to projects worth up to almost €1 billion. The specific feature of the support provided by EBRD is the fact that, in addition to the customary procedure in financing projects, it also provides Technical Assistance through donations which are used to finance diverse consultancy services during the preparation and the implementation of projects. Furthermore, Technical Assistance is provided through operational and financial (corporate) strengthening of our borrowers in this sector who are primarily utility
The relationship between local government and the state is often politicised: what is your opinion of this relationship in Croatia and throughout the region and how does it affect investment? The dialogue or the discussion on the allocation of responsibilities and the coordination between the central and the local authorities is an ongoing process. It is a burning issue also in the most advanced countries globally and there is a wide range of models and specific features to each model. Nevertheless, this relationship, the stability and the continuity of co-operation is vital for success. It is certainly evident during the preparation and implementation of projects financed through EU funding. Co-operation and a transparent allocation of roles in the preparation and implementation are of crucial importance for the success of EU funding implementation. EU funding has immense potential in urban development. Which EBRD models are provided or what are the experiences of other EU member states? EU funding is the greatest and safest source of financing large infrastructure projects. In addition, it is the principal source of potential growth and economic development. Consequently, it is fundamental for new EU member states, as well as pre-accession countries (potential candidates for accession to the EU), to show their capacity of absorption of
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EU funding. EBRD is a partner ensuring co-financing (of both local and national components), as well as providing the previously mentioned Technical Assistance for end users in order to facilitate their project implementation and simultaneously assist them in the creation of additional capacity for further absorption of capital donations from EU programmes. EBRD is currently discussing with the Republic of Croatia about concrete technical assistance in the support to regionalisation of water and wastewater sector, which would provide up to €3 million in technical assistance for 15 major projects in this sector.
Smart Cities – a broad definition Broad definition: "Smart Cities" employ innovative concepts, technologies & services to achieve city objectives
What are the future prospects of this sector and the most severe challenges in further development of urban projects? The greatest challenge is the enhancement and acceleration of investment, primarily concerning EU funding implementation. Moreover, EBRD is developing and supporting new, innovative models of urban infrastructure financing, such as primarily public-private partnerships (PPP) throughout the sectors. We have recently initiated discussions on the construction of new hospital facilities according to the principle of public-private partnerships. Energy efficiency models are based on ESCO models. Croatia and the region need to open up and use the models which have been successfully used in the developed countries for decades. EBRD will continue providing assistance and use positive experiences at a global level to meet the specific requirements and adapt to market conditions. How important is co-operation between cities in the region and what is its role in regional development? It is imperative, as is the case with any co-operation in the current global village. Southeast Europe is a mixture of both substantial differences and similarities. There are a large number of fully-fledged EU member states in the region, as well as candidates for EU accession, or those who are yet to become candidates. Simultaneously, cities throughout the region are faced with similar or almost identical problems, against a backdrop of diverse modalities of investment attraction. Exchange of experiences and co-operation between cities can only strengthen further growth.
• Energy efficiency • Pollution • Resources
• Investment • Jobs • Innovation
• Public safety • Education • Healthcare • Social care
Source: The Boston Consulting Group, Inc.
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Interview: Tomislav Gavazzi, Founder and Owner of Infoarena Group
Our aim is to make the entire region competitive on both European and global markets and to develop co-operation between capitals in the SEE region
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the Infoarena Group, and is supported by regional companies such as Agrokor, A.T. Kearney, Atlantic Group, Bingo, Delta Holding, Gorenje, Holding Slovenske elektrarne, IBM Croatia, IEDC-Bled School of Management, MK Group, Nelt Grupa, Nestle Adriatic, NIS Gazprom Neft, Nova Ljubljanska banka, Podravka, Privredna banka Zagreb, S&T, Styria Croatia, Telenor Montenegro, Telenor Serbia and Vipnet. The main goal of the HR BUSINESS ARENA event is to encourage the signing of the Memorandum of Youth Employment Initiative in the Region on the joint initiative of youth employment in the region, as well as strengthening knowledge and skills for work through training, internships, mentoring etc.
omislav Gavazzi, Founder of Infoarena will introduce Infoarena Group and Municipal Investment and Development Arena to all readers and give a closer look at the ideas they represent: INFOARENA GROUP Infoarena Group
is the leader in the SEE region in supporting companies and governments with business networking, knowledge and intelligence. Our core business is event organisation (conferences, round tables and forums), networking of interest groups and the creation of quality business content. Our objective is the development of a partnership environment that provides a high quality platform to the business segment in order to create a competitive market advantage. To date, we have organised more than 300 business events (conferences, forums, round tables) in the region with more than 30,000 participants. MUNICIPAL INVESTMENT AND DEVELOPMENT ARENA 2015 The Mu-
nicipal Investment and Development Arena will be held this year for the first time. The Arena serves as a platform to increase investment in the capitals of the region, as well as a platform to make them more efficient. It aims to encourage investment and development across the region. There are three aspects of which we are very proud: A place for dialogue. The Conference serves as a place for dialogue between the public and private sectors, with the aim of making the entire region competitive on both the European market and the global market. It brings all the leaders form municipalites , both public and private sectors, to one place and gives them the opportunity to exchange their views on the sector. It provides all participants with a chance to gain insights into the full potential of the market and incorporate their business into it.
THE MEDIATOR OF CO-OPERATION BETWEEN PUBLIC AND PRIVATE SECTOR IN THE REGION. Co-operation
THE ACCELERATOR OF SOCIALLY RESPONSIBLE INITIATIVES. The
between capitals in the region is essential for the development for the region. The market is awakening to such ideas, after a significant period of low co-operation. The crisis has motivated municipalites to think about more efficient business models and consider possibilities of co-operation.. Sharing quality workforce and experience exchange within the region has become very important as the whole region has top experts. ď&#x192;&#x203A;
Conference serves as the accelerator of socially responsible initiatives that we have launched this year. Youth employment Initiative in the Region, launched this April in Dubrovnik by the Advisory Board of the HR BUSINESS ARENA 2014 was the first of those initiatives. The main I would personally like to use this purpose opportunity to thank the EBRD of the Initiativee and City of Zagreb for being our is helppstrategic co-organizers. I wish ing young ng productive and pleasant stay to all people to climb the participants! career ladder. der. The Initiaitiative has been launched by
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Conference Programme
South East Europe Regional Conference
co - organisers:
City of Zagreb
Museum of contemporary art, Zagreb, Republic of Croatia
general patron:
March 16th, 2015 PRE – CONFERENCE PROGRAM: 8:00 - 9:00
Registration & Welcome coffee
09:00 - 09:05 welcome speech: Tomislav Gavazzi, Founder and Owner, Infoarena group, Croatia 09:05 - 10:30 Presentation of Investments and Development plans for next 4 years for bigger cities in the region, City of Zagreb, Croatia: Investment & Development plans for next 4 years introduction speech: Sandra Švaljek, Deputy Mayor, Zagreb, Croatia introduction speech: Davor Štern, former Minister of Economy, Labour and Entrepreneurship in the Croatian Government, member of the Zagreb city council, Zagreb, Croatia Roundtable: Urban regeneration of Gredelj moderator: Maroje Mrduljaš, Managing editor, Oris, Croatia panelists: 1. Davor Štern, former Minister of Economy, Labour and Entrepreneurship in the Croatian Government, member of the Zagreb city council, Zagreb, Croatia 2. Marko Dabrović, partner, 3LHD, Croatia 3. Stipan Marovic, Director, STIMAR company, Zagreb, Croatia 4. Mladen Pejnović, Head of the State Office for State Property Management ('DUUDI'), Zagreb, Croatia 5. Renata Suša, president of the Board, Hrvatske željeznice, Zagreb, Croatia
City of Zagreb
10:30 - 11:00 Presentation of Investments and Development plans for next 4 years for bigger cities in the region - City of Sofia, Bulgaria: Investment & Development projects for next 4 years • Doncho Barbalov, Deputy Mayor for finances, Sofia, Bulgaria 11:00 - 11:25 "Digital economy for better service to citizens and effective management of municipalities", Harri Airaksinen, Vice President, VTT, Finland 11:25 - 11:45 "Smart Cities – a model for future city development", Filip Glavan, Project Leader, Boston Consulting Group OFFICIAL PROGRAMME: 12:30 – 13:00 Registration 13.00 - 13.45 Opening Ceremony
welcome note: Tomislav Gavazzi, Founder and Owner, Infoarena group, Croatia welcome note: Davor Inđić, Senkior Banker, EBRD, Croatia welcome note and opening speach of the conference: Sandra Švaljek, Deputy Mayor, Zagreb, Croatia 13:45 – 15:15 Roundtable 1: How municipalities can attract investments key topics: need of improvement of the business climate need of cooperation between the regions, countries and municipalities
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view from the investors in the region encourage ppp investment EU funding - how to realise them successful case studies catalog of project for investments introductory speech: Vesna Trnokop Tanta, Head of Public Sector Services, PwC, Croatia moderator: Vesna Trnokop Tanta, Head of Public Sector Services, PwC, Croatia panelists: 1. Doncho Barbalov, Deputy Mayor for finances, Sofia, Bulgaria 2. Mirka Jozić, Head of the City Office for Economy, Labour and Entrepreneurship, City of Zagreb, Croatia 3. Andrej Lavrič, Director for developing and managing real estate at HIDRA corporation, Slovenia 4. Mojca Lukšić, Project Manager, Hrvatske vode 5. Harun Omerbašić, Senior Advisor to the Mayor, City of Zagreb, Croatia 15:15 – 15:45 Coffee break / Business networking 15:45 – 17:30 Roundtable 2: Effective management and development of the municipalities key topics: challenges for future development effective management of municipalities and utility companies technology and innovation - key drivers of development entrepreneurship, science and academic communications as engines of economic development cooperation within local business moderator: Nataša Ćurić Martinčević, Sense Consulting, Crotia panelists: 1. Dejan Fičko, President of the Board, Zagrebački holding, Croatia
2. Vladimir Ferdelji, Member of the Zagreb Assembly and president of the Croatian Association of Managers and Entrepreneurs, Zagreb, Croatia 3. Harri Airaksinen, Vice President, VTT, Finland 4. Jadranka Veselić Bruvo, Head of the City Office for Strategic Planning and Development, CIty of Zagreb, Croatia 17.30 - 18.00 Coffee break / Business networking 18:00 – 19:30 Roundtable 3: High Level Debate on Development of capitals key topics: leadership view - mayors of capitals - how capitals can be partner with citizens, entrepreneurs, academy, science and investors key challenges of sustainable development collaboration or / and competitiveness between capitals in the region co-operation between national and regional strategies with capitals in the region Introduction speech: Davor Inđić, Senkior Banker, EBRD, Croatia moderator: Davor Inđić, Senkior Banker, EBRD, Croatia panelists: 1. Sandra Švaljek, Deputy Mayor, Zagreb, Croatia 2. Gábor Bagdy, Deputy Mayor, Budapest, Hungary 3. Doncho Barbalov, Deputy Mayor for finances, Sofia, Bulgaria 4. Pekka Sauri, Deputy Mayor, Helsinki, Finland 5. Dardan Sejdiu, Deputy Mayor, Priština, Kosov 19:30 – 21:00 Closing ceremony; Standing dinner for all participants and VIP guests