As more and more information technology-related companies open branches in Krakow, enthusiasts speak of a local version of California’s Silicon Valley.
If the trend continues, Krakow and the entire Malopolska region will really become an IT capital of Poland. During the last couple of years, international companies such as IBM, Motorola, Google, MAN, Delphi, Sabre, Capgemini and ABB have located their IT labs in Krakow.
In addition, some of the biggest Polish e-business-related enterprises – including Comarch, Onet and Interia – opened branches in the city. The major factor attracting them to Krakow is an abundance of highly educated personnel.
Universities based in the city educate 180,000 students each year. In particular, the University of Science and Technology (AGH), Krakow University of Technology (PK) and Jagiellonian University’s (UJ) computer studies graduates supply the rising demand for skilled IT employees.
The competition in the job market serves all Krakow residents as wages rise to meet the demand for highly educated specialists.
In some cases the wages reach or even exceed European standards.
A good programmer with two or three years of experience may earn up to 10,000 złoty (2,700 euro) a month, five times the average wage in Poland.
Local authorities try to make investing in Krakow and the region easier. One of the institutions that helps foreign investors is the Malopolska Agency for Regional Development (MARR). Its task is to contribute to comprehensive development of the region.
The agency distributes EU funding, serves as a consultant in the labor market and also an intermediary between local government and foreign investors.
Another institution important for the development of the IT sector is Krakow Technology Park, a company which manages the Krakow Special Economic Zone. The zone offers tax incentives to investors and provides them with space for research facilities and offices.
It also establishes good relations with local authorities as the city itself is one of the shareholders of the technology park, as is the state, Malopołska voivodeship (one of 16 Polish administrative provinces), AGH, UJ, PK and Mittal Steel.
The technology park administers 300 hectares of land in Krakow and nearby towns as well as in other cities of the region: Tarnow, Krosno and Nowy Sacz.
In October the enterprise was granted 25 mln euro from the EU Innovative Economy program to stimulate development of the IT sector in Malopolska. But the Silicon Valley in southern Poland should not be limited to Krakow or Małopolska.
In July authorities of Małopolska, Lower-Silesian, Opole and Silesian voivodeships signed an agreement with the mayors of the regional capitals of Krakow, Wroclaw, Opole and Katowice.
The agreement activated an initiative called New Technology Companies Highway (AFNT), which should help combine the potential of IT enterprises from the area.
The idea is already quite old. Its father is Jerzy Szymura, a programmer and businessman and the former chairman of Techmex, one of the biggest Polish IT companies.
In the mid-90s Szymura proposed that companies, universities and authorities from the area surrounding the Polish part of the A4 international highway cooperate on a common strategy of development. The first agreement based on Szymura’s guidelines was signed in 2000, but its effects were not sufficient.
The most recent agreement suggests that companies jointly commission research and cooperate with universities and subcontractors in other countries. In the future a large-scale enterprise could be strong enough to compete with IT-oriented regions like Bavaria. As in Krakow, the AFNT’s main advantage should be the skilled labor pool created by the region’s 125 higher education institutions and their 600,000 students (a third of all Polish students).
Another factor bringing investment to the four voivodeships should be a high level of communication and transportation infrastructure provided by the three rapidly developing airports in Katowice, Wroclaw and Krakow and direct rail connections with the biggest cities of Central Europe.
The roads, however, still may need a major investment to make the region more driver-friendly. Money could be provided by the Polish Transport and Infrastructure Ministry and from EU development funds.
The future for the IT sector in Krakow and Małopolska seems bright, but labour market specialists already warn that soon there will not be enough programmers to keep local companies working.
The universities have to produce more computer specialists so that this pessimistic scenario doesn’t come true. And more specialists shouldn’t automatically mean lower quality.
Technical education has to keep pace with worldwide trends. And here’s another danger. University teachers will be tempted to leave school to earn much more in private companies. If wages of scholars and researchers don’t grow and remain competitive, the standards are bound to fall.