Wroclaw is trying to shake off the image of Poland being a source of low-cost labour
Wroclaw, Poland's fourth-largest city, is better known as Festung (Fortress) Breslau. Largely destroyed during the war when German troops in Breslau were besieged by Russians, the capital of Lower Silesia in southwest Poland – an area that belonged to Germany before the second world war and has been fought over throughout history – has been transformed since the end of socialism in 1989.
"Wroclaw was a grey place. Many parts of the old town hadn't been renovated after the war," recalls Tomasz Spiewak of the Wroclaw Agglomeration Development Agency.
Dotted around the city are bronze statues of dwarves, the symbol it adopted in honour of the 1980s Orange Alternative underground movement. A peaceful protest group, it initially painted graffiti of dwarves on spots created where the police covered up anti-regime slogans.
Since then, the old town has been rebuilt and a roster of global companies including Volvo, Google, Siemens, Cadbury, IBM, Microsoft and Capgemini have set up business in Wroclaw. It is also the headquarters of four Polish banks, while South Korea's LG produces half of all flatscreen TVs made in Europe in Wroclaw.
Many companies that initially came to set up small plants in Wroclaw have beefed up their presence and now also develop new products here. "Volvo came to Wroclaw to build buses but ended up setting up an IT and business process outsourcing centre," says Spiewak.
A high-tech cluster of biotech, IT, photo optics and engineering firms has sprung up, along with a research hub in restored 19th century buildings on the outskirts of the city.
Owing to four special economic zones in and around Wroclaw, the city has received €60m (£52.9m) for research programmes from the EU, along with €140m for infrastructure improvements. The money has poured into a new airport terminal, motorways linking the region with Berlin, Prague and Ukraine, and a 42,000-seat football stadium that will host some of the Euro 2012 games, as well as the rebuilding of the city's 19th-century Prussian railway station. For the time being, Wroclaw's surroundings are a giant construction site.
The latest available GDP figures show Wroclaw growing by around 12% a year in 2008 and 2009, faster than China, and unemployment, at 5.4%, is half the national average in Poland. The city forms part of the rapidly growing border region in the west while eastern Poland is more agricultural and has had greater problems adjusting to life after socialism.
"Wroclaw used to be very different. It has experienced tremendous growth," says Adrian Bohdanowicz, radio research manager at Nokia Siemens Networks.
The company runs an R&D centre in Wroclaw, its third-biggest in the world, and like many others, is capitalising on Wroclaw's large student population. Its technical university is said to be the best in Poland. It is compulsory to study two foreign languages, which means most graduates speak English and German as well as Polish.
"We now have a rather good environment to grow for a company," adds Bohdanowicz. "There are a lot of young skilled engineers here - it's a city of universities. It's also about the infrastructure support we're getting from the local government, and we have a very good relationship with the city mayor and the local authorities."
Along with other Polish regions, Wroclaw is trying to shake off the image of Poland being a source of low-cost labour. "Since 2004 when Poland joined the EU, salaries in Wroclaw have gone up by about 50%," says Jan Zarski of the Agglomeration Development Agency. "We're not a low-cost country any more, our competitive edge is that we can provide high quality services or products at a competitive price. So the quality to price ratio is our advantage."
Aside from foreign investors, Wroclaw is also trying to attract Polish companies through a pilot programme called Polish champions, designed to help them expand abroad.
One of them is Polish construction chemicals group Selena, which was founded in Wroclaw in the late 1990s and now has an annual turnover of €230m. Its vice president, Kazimierz Przelomski, says: "We developed quite fast thanks to quite favourable conditions. We've benefited from the economic free zone and tax advantages."