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Europe / Poland

Polish cities: Poznań’s central role in Poland’s investment ambitions

Poznań is Poland's second-largest economy and is viewed as a gateway to eastern Europe by many of the investors it attracts, making it a key piece of the country's FDI set-up.

Poznań – Poland’s fifth-largest city – is located between Warsaw and Berlin, making it an important logistics hub considered by many to be a gateway to eastern Europe. The city itself – which sits on the Warta river – is filled with grand architecture and history through the renaissance Old Town, Ostrów Tumski Cathedral and the Poznań town hall.

Poznań had been an emerging tourism hotspot before the Covid-19 pandemic and is hoping to regain this momentum over the next few years. (Photo by Vasilisa Voronkova/iStock)

Poznań has played a significant role in Polish history. Following the First World War, the Posnanian War saw Poles seize Poznań, which eventually resulted in the Posen area being officially given to the Second Polish Republic.

In today’s world, Poznań continues to be crucial in Poland with the city having the second-largest economy in the country (after Warsaw). Alongside this, Poznań has the highest GDP per capita and one of the lowest levels of unemployment in Poland.

The mayor of Poznań, Jacek Jaśkowiak, says of Poznań’s layout: “A unique feature of the city of Poznań is the local community, concentrated in fyrtle [districts]. Each of them is unique, with their own distinctive features [when it comes to] places, buildings, stories, legends, personalities.”

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Jaśkowiak believes this dynamic energy rubs off on Poznań citizens. “In Poland, there is a belief that the residents of Poznań are enterprising and I agree with it,” he says. “Many small family businesses as well as large enterprises operate here.”

With such an entrepreneurial population, education is a crucial component of Poznań.

Poznań: the  student city

Poznań has innovation tied into its history, with the city’s school of mathematics being home to the three Polish scientists that first broke the code that ran Germany’s Enigma machine in the Second World War. The work of the scientists is proudly on display at the Pogromcy Enigmy museum, and a focus on education, intellect and innovation runs through the city to this day.

Employees of the modern business services sector in Poznań provide services for clients in 30 different languages. Jacek Jaśkowiak, mayor of Poznań

Poznań is home to 24 universities, including eight public ones, with one in five of its residents being a student. Jaśkowiak says: “Poznań is a student city. It has a direct impact on the development of Poznań and the values we support here.”

The city educates more than 102,000 students with over 80,000 of students (at all educational levels) fluent in English and 30,000 in German. “Poznań is a powerful academic and scientific centre, one of the leaders in Poland,” says Jaśkowiak. “Employees of the modern business services sector in Poznań provide services for clients in 30 different languages.”

It is not just the student population in Poznań that is proving robust. The city's population has been growing steadily since 2000. Sebastian Bedekier, regional director of the Poznań region at professional services company Colliers, says: “[The Poznań workforce] brings a lot of new talents to the market. That is why [university cities such as Poznań] are so sexy to foreign investors, because labour costs are attractive and there is availability.”

Poznań’s workforce has grown in value during the Covid-19 pandemic. “Businesses want people from all over the world – especially in the IT sector – and recruitment has gone global due to the pandemic,” says Bedekier.

Building business services in Poznań

Poznań’s economy is based on advanced production companies, with big conglomerates such as Volkswagen, GSK, Bridgestone, Franklin Templeton and Arvato present in the city.

The divide between the services and industrial sectors is marginal in Poznań. Historically, the city has been known for the manufacturing subsectors of automotive, food and pharmaceutical production.

Using this industrial base as a springboard, the city is looking to expand further into modern business services such as business process outsourcing (BPO), IT and R&D.

Even against the backdrop of the Covid-19 pandemic, Poznań has continued to perform strongly in 2021, announcing ten investments from the likes of Tuopu, Infosys, B. Braun, Express VPN and FasterPay.

“Earlier in 2021, Siemens Digital Industries Software also increased its presence on the IT market in Poznań," says Jaśkowiak. "Preparations are under way for the expansion of the Beiersdorf factory, the cost of which is estimated at approximately 700m zlotys, and the Bridgestone factory, which will spend more than €160m ($187.4m).”

Poznań looks to bounce back strongly from Covid-19

Key sectors in Poznań are plotting strong recoveries from Covid-19, according to Jaśkowiak. “Companies from Poznań reacted calmly to the situation and did not carry out sudden reductions in employment," he says. "The BPO and IT sectors efficiently switched to remote work. The pandemic has become a great opportunity for IT companies, especially in the e-commerce sector, as the demand for IT services has increased."

Companies from Poznań reacted calmly to the [pandemic] and did not carry out sudden reductions in employment. Jacek Jaśkowiak

Alongside this, industrial sectors are finding their feet. “Despite the initial stagnation in the automotive sector, the biggest players in Poznań, such as Volkswagen and Bridgestone, have already returned to the standard production level," says Jaśkowiak. "Volkswagen has completed the process of expanding its plant in Antoninek after five years. Each new Volkswagen Caddy that you see anywhere in the world will have been been produced in Poznań!”

As companies look to shorten their supply chains, Poznań is also experiencing increased interest from investors looking for warehouse space with strong links to the European market. “During the pandemic in Poznań, the increase in demand for warehouse space reached a record level of 31% year-on-year,” says Jaśkowiak.

A rebound for tourism?

Before the pandemic, the wider region of Wielkopolskie (of which Poznań is the capital) had been enjoying a steady increase in tourist numbers.

Between 2010 and 2019, tourist arrivals grew by 1.25 million. There is hope that as the world reopens, tourism growth will pick back up for Poznań.

Kraków was always perceived to be bigger and better, but in the past few years Poznań tourism has really grown. Sebastian Bedekier, Colliers

“Poznań did not used to be on the list of Poland's touristic places," says Bedekier. "Kraków was always perceived to be bigger and better, but in the past few years Poznań tourism has really grown. It is not only business tourism, but tourism to see the city and the history. Poznań is kind of a cradle for Polish history.”

Jaskowiek agrees, saying: “This is a place that has played a significant role in Poland's past. It is believed that the baptism of Poland took place in Poznań. [We have] one of the largest and oldest trade fair centres in Europe. Poznań is also known as the culinary capital of Poland.”

Visitors to Poznań can satiate their appetites with traditional dishes such as pyra z gzikiem (regional potatoes with cottage cheese), and if cottage cheese-covered potatoes aren’t enough to attract investors, the high-levels of talent, lower operational costs and the city’s aspiration to build a robust and innovative services sector off the back of its industrial history may just do it – Covid-19 permitting.

This article originally appeared as part of Investment Monitor's 'Future of Polish Cities' series, with the first looking at Łódź and the second Wrocław

Ruth Strachan is a senior reporter at Investment Monitor.