With a total of 31 new investment projects from the likes of Nasdaq, Uber and AIG brought to Lithuania, 2015 was a record breaking year for the foreign investment development agency Invest Lithuania. Whilst the number of projects attracted and jobs created increased by 20% and 50% respectively, the standout figure last year was the nearly fivefold jump in total capital investment (CAPEX), up from €30 million in 2014 to €144 million.
Despite the fact that 2014 had been a record year, the team at Invest Lithuania were determined to rewrite the record books once more in 2015. And they were able to do so by further tailouring and refining their investment strategies, as the agency’s director Mantas Katinas explains.
“2015’s results are the best in the history of the agency and of Lithuania,” says Mr Katinas. “Our consistent focus on creating a favourable business environment and actively ‘targeting’ investors is bearing fruit. Thanks to this strategy, Nasdaq, Uber, AIG, Intermedix, Teleperformance, Revel Systems and many other global companies have chosen Lithuania as the place to grow and develop their businesses.”
“Analyses suggest that Lithuania stands out in the region with its strong services centres, games industry and information technology clusters,” Mr Katinas continues. “We are pleased that investment in production jumpstarted last year, and are targeting further breakthroughs in this area in the future.”
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One clear motivating factor for the Invest Lithuania team is that the fact that their efforts lead to the creation of new jobs for skilled specialists across the country. The investment projects attracted in 2015 will create at least 2,647 new jobs over the next three years. Around 1,500 of these will be in shared services, whilst over 600 new positions will be created in the manufacturing sector. Denmark is leading the way as an investor in Lithuania, with Danish capital companies set to create 794 jobs. The US and France are the next biggest investors.
The distribution of new employment opportunities will also be well balanced across the Baltic country. Thanks to their high concentrations of service centres and IT businesses, Vilnius, the capital, and Kaunas, Lithuania’s second city, will see the highest number of jobs created. Forecasts suggest that investors in these sectors will become increasingly interested in the port city of Klaipėda in coming years due to its untapped potential.
Whilst opportunities in the services and IT sectors are concentrated in the largest cities, new investments in manufacturing are focused on the regions of Lithuania, with 150 new jobs to be created in the city of Panevėžys. By contrast, just 1% of the total capital investment in manufacturing projects in 2015 went to Vilnius.
In terms of capital, the largest investments announced in 2015 were Neo Group’s €50 million project in Klaipėda Free Economic Zone and the construction of a new €34 million production facility by Eternit Baltic. The biggest job creators of 2015 were Danske Bank and Teleperformance, both based in Vilnius, and Intermedix, located in Kaunas.
As you would expect from an agency that has had two record breaking years in a row, Invest Lithuania has already set ambitious targets for 2016. There will be a greater focus this year on cutting-edge scientific research, innovation and tech industries, as these areas bring the highest value to the country. Whilst competition to attract investors in these fields is fierce, Mr Katinas believes Lithuania’s dynamism and adaptability can give it a competitive advantage. “Our current success is the result of having a clear focus and making the right changes. In order to move from being a strong regional player to being among the very top ranks globally, Lithuania must continue to regularly implement changes that enhance the country’s attractiveness as an investment location.”
Mr Katinas would like to see further reforms that focus on attracting and nurturing talented specialists. “Today, it is most important to reform the education system, to create the right infrastructure to enable innovation, and to modernise the immigration system. We are also calling for a new draft labour code and for a maximum limit on social security contributions from companies. As a small country that wants to compete globally, we must implement these changes quickly. This could be our competitive advantage over large countries,” Mr Katinas explains.
With this focus on reform and further adaptation, the team at Invest Lithuania are confident that the substantial growth of 2015 can be emulated this year. They have set themselves the target of increasing overall performance by at least 15% in 2016.
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