You may never have heard of Plovdiv, a city of around 350,000 people in central Bulgaria, but you’ve probably encountered something that was made there. In the 1990s, as the Bulgarian economy opened up, the city saw an influx of new factories producing everything from Liebherr fridges and Socotab tobacco to car parts, bikes and electronics.
Now, thanks to cheap labour, a stable currency (the lev, which is pegged to the Euro), and a 10 per cent flat tax rate, the city is now a leading European industrial hub. According to Eurostat, whose definition includes manufacturing, mining, and the production of raw materials like steel or chemicals, “industry” now accounts for almost 40 per cent of the city’s economy.
Here’s Plovdiv, compared to a few other cities:
Share (%) of industry in total GDP. Source: CityMetric Intelligence.
This industrial revolution has been pretty good for the local economy: between 1990 and 2010, GDP per capita increased four-fold, from around €1000 to almost €4000. (In the country as a whole over that period, it increased more slowly, from €1800 to around €5000.)
The authorities clearly don’t expect the industrial sector to shrink anytime soon. In 2013, the city started developing the 1070-hectare Trakia Economic Zone in six locations around Plovdiv; it’s already attracted over €1bn worth of investment.
But lots of manufacturing isn’t unqualified good news for any city: there is, unsurprisingly, a strong correlation between industry sector share and air pollution, and Plovdiv, Krakow and Milan all register pollution levels over the EU-limit for a large chunk of the year. Here’s the number of days pollution levels were over the limit in Plovdiv and Krakow, compared to low-industry cities Dublin and Stockholm:
This effect is probably made worse by the fact that both Krakow and Plovdiv’s major industrial activities are pollution-heavy. In Poland, 85 per cent of electricity comes from coal-fired power plants, while the majority of Plovdiv’s factories produce chemicals, plastics and metal products. As ever, growth comes at a cost.
And the benefits have proved slow to filter down to employees, too. In 2013, skilled industrial workers in Plovdiv were earning a meagre €500 a month before taxes, compared to over €1000 in Moscow and around €600 in Bulgaria’s capital, Sofia. Competitive wages may be great for manufacturers – but they’re not so good for those who actually work for them.
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