Rapidly developing and internationally recognized, Kaunas is becoming a go to location for Business Services in the region. And it’s not difficult to see why. It is currently one of the least saturated markets in CEE – with only 7 employees in the business services sector per 1000 inhabitants – offering greater potential for companies looking to grow than established centers like Wroclaw, Poznan and Tri-City.
The city’s real strength lies in its talent. It is Kaunas’s ability to consistently produce a young, educated and highly motivated workforce that has undoubtedly been the driver behind the global player Intermedix’s expansion of its Kaunas based operation. The company presently has 640 employees working across a range of key functions that encompasses IT, F&A, and Operations Support.
We could go as far as to say that it is this golden ratio of low saturation to high competence that has made the city such an attractive proposition for companies like Intermedix, NFQ Technologies, Call Credit, Festo, Bentley Systems, Devbridge Group and Dematic. The SSC sector alone has a low saturation of 6.7%, while the city’s universities currently offer courses to 40 000 students each year. Moreover, with the capital city Vilnius only 100 km away, Kaunas can offer a unique and inter-connected labor pool of more than 730 000 people, and an overall student pool which exceeds 100 000.
The student talent pool created in Kaunas is also especially suited to diverse and innovative business services. 1 out of 4 students in Kaunas study engineering related subjects, with this number increasing year on year. In addition, 1 out of 3 students study economics, finance, or business.
Kaunas’s universities and colleges are also keenly aware of the importance of creating synergy between business and education. A particularly clear example of this is Kaunas University of Technology, the country’s premier technical university, which has closely developed several ongoing projects with large global businesses.
Take its cooperation with Intermedix, for example, whose Innovation and Creativity Laboratory is aimed at fostering and developing a local hub for R&D. KTU is also home to the largest Bloomberg Financial Markets Lab in the Baltic States and Poland. This lab enables businesses and public sector organizations to hire new employees with the practical experience of the processes common to global markets.
Kaunas University of Technology also runs similar programs with Siemens, Samsung, Hitachi, Barclays, and many other companies. All this close collaboration is focused on one main aim, creating the right people to service companies looking to grow and develop their businesses.
The fact that Lithuania is multi-lingual is also an attractive lure for business. 86% of the 20-29 age group in Lithuania speak a foreign language, with 69% fluent in English. In the current SSC sector in Lithuania, 97% of services are delivered in English. In fact, services are offered in 34 languages in total, with the predominance of English and Scandinavian languages reflecting the current dominance of US, UK and Scandinavian investment locally.
Looking in more detail at the scope and diversity of the talent on offer, we can see that the Lithuanian SSC sector is equally diverse in the functions it provides and the markets it provides services to. 87% of centers offer 2 or more functions, and 45% of centers are global, offering services to 3 or more regions.
Regarding location and connectivity, Kaunas is Lithuania’s second city, and home to the country’s second busiest airport, which offers regular flights to London, Edinburgh, Dublin, Helsinki, and Tel Aviv. Vilnius Airport is only an hour’s commute by rail or car, and all flights are around three hours to most major European destinations. What’s more, the new Rail Baltica Project, which will run from Helsinki to Berlin, is set to go through Kaunas, creating even greater links between the city and mainland Europe.
Then we have internet connectivity to consider. With some of the fastest internet speeds globally, fiber to premises penetration of almost 100%, and the best 4G coverage in the EU, Kaunas offers a fast and robust IT infrastructure tailored to suit the needs of modern business.
Kaunas also offers very cost competitive rates when it comes to looking for a place to develop your business. On average, 1m2 of office space can be rent for 10EUR, which is 25% lower than in Vilnius, and 50% lower than in Warsaw. Variety and choice is also not an issue, as it is estimated that 41,800m2 of new office space will have been developed by the end of 2018, and by 2019, 27 new business centers will have been built. So, whether companies are looking for the lived-in grandeur of Kaunas Old Town’s architecture or sleek modern design, the city will be able to fit the bill.
For companies of all sizes and functions, Kaunas offers real potential for growth and development. It is clear that as far as this city is concerned, its story is just beginning.
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