Vilnius at the back of the pack

  • 2008-10-29
  • From wire reports
VILNIUS - Vilnius lags far behind other cities in the Baltic Sea region in terms of its economic development and competitiveness rating, German researchers concluded in a survey presented in Rostock last week.
The survey compares nine cities in the region: Kiel and Rostock in Germany, Poland's Gdansk, Vilnius, Rīga, Tallinn, Turku in Finland, Umeå in Sweden and Aarhus in Denmark.

The assessment of a city's potential is based on a presumption that competitive advantage lies not only in the traditional factors - pricing of land sites and labor force, as well as transportation costs - but also the factors with rather indirect effects on the economy - innovations, know-how and openness.
Based on these factors, Vilnius together with Rīga and Gdansk ranked in the group with the worst perspectives, far behind the leading group of Turku, Umeå and Aarhus, falling behind the middle group as well - Kiel, Rostock and Tallinn.

The survey shows that Vilnius has serious problems in terms of its innovation and knowledge level - many of the indicators describing such characteristics are well below the European Union level - yet on the other hand the capital of Lithuania makes the grade as being rather open.
Speaking about innovation, the survey's authors emphasize that the amount of spending Vilnius does for research and technological development (0.76 percent of GDP) is less than one half of the EU average of 1.9 percent of GDP. They also point to the fact that research facilities are poorly provided for, scientists earn a pittance and therefore intellectual talent is leaving the country.

According to the survey, Vilnius, with its 135 university students per population thousand is well above the EU average, it still falls behind in the EU in terms of the people employed in knowledge economy companies.
The authors appreciate the multi-national nature of Vilnius as well as the fact that the number of employed women in the city is above the EU average. Still, the survey points to the fact that the denizens of Vilnius face plenty of challenges when trying to reach a balance between family and work. This relates, among other things, to the poorly developed system of nursery schools and kindergartens.

The research was carried out by the Hamburg Institute of International Economics in cooperation with the Hamburg office of the business consultancy PricewaterhouseCoopers.