Krakow - the best location for BPO SSC investment

"Stiffer competition is arising from South America and MENA regions to capture a significant share of the global outsourcing market. Each city in the Emerging list has been positioning itself and their respective niche services and specific target markets - leading to more defined value propositions per city.
The only Eastern European city, Krakow leads the Top 10 Emerging Outsourcing Cities List. The city, constantly moving up the ranks since 2008, has built expertise in delivering FAO services with improving service delivery maturity for ITO and HRO services. Large multinational companies have established their presence in the city, like Capgemini, Google, IBM and Microsoft."
Global Services, The TOP 100 Outsourcing Cities, November 2010

“Kraków, and its province of Małopolska, form 7.2% of Poland’s GDP and 7% of the total labour force. However, it is not a leading industrial base for the country as it only
contributes 6.9% of the total industrial production. Due to a high academic concentration (two technical universities), the main sector of Kraków’s economy is information technology which supplies 87% of Kraków’s output. Banking and food
production (including tobacco processing) are key sectors of the local economy.
Housing
According to data from the Central Statistics Offi ce (GUS), the number of housing units completed between January and June 2008 rose by 22.6% in comparison to the same period of the previous year. However, one can say that the housing boom is coming to an end in Kraków. However, supply of housing units is still at a healthy rate of 9.8% of the total houses constructed in Poland. Kraków benefi ted from the boom of 2005 – 2007 and there an abundant supply of houses (both for purchase and lease). This means that housing in not a major problem in the city. Average price per sqm in a new unit is PLN 8,000. The city is an important cultural and tourist centre of Poland with a dynamic tourist industry. Museums, theaters and cinemas, offer families a vibrant, urban life.
Commercial Properties
The Kraków offi ce market is expected to experience a development boom within the next two years and as a result the total stock will double. The city has become so attractive to investors over the last two years that the vacancy rate has fallen to 1% in Q3 of 2008 meaning that there is virtually no current vacant space and tenants need to wait for new projects to enter the market. Moreover in the last two years the only way to secure offi ce space was to sign a pre-lease agreement. High demand for offi ce space has been generated in particular by companies opening their BPO centres here. Kraków does not have a central business district. Instead, 3 zones with a high concentration of modern offi ce stock can be identifi ed. These are the city centre fringe (mainly its eastern side), the north-west and southern parts of the city.[…]
Companies locating their shared service centres in Kraków include: Capgemini, Philip Morris, IBM, Lufthansa, Ernst &Young, Bayer, AFS, Ahold, Communication Factory, Electrolux, Indesit, KPMG, Hitachi Data System, CBB Call Centre, Contact Center AZ Soft, International Paper, IFS Poland.
Due to the high number of well-educated graduates Kraków is also an attractive location for the R&D sector. ABB, Delphi Automotive Systems, Lurgi, Motorola, Pliva and Google have opened their research and development centres here.
At 19,000 sqm Kraków’s industrial market has yet to take off compared with the rest of Poland. One reason is due to problems with land ownership, as small plots with complicated ownership structures make it cumbersome to amass larger areas needed for industrial development. The situation is likely to improve as one of the major developers is about to finish construction of an 18,000 sqm project, but even this will not placate the demands of the market.
Recommendations
Kraków is recommended as a centre for BPO/Outsourced activities, especially in offering back office activities for financial institutions. Kraków is also an ideal place for IT services for major corporations. The easy availability of multilingual and qualified labour, possibilities of setting up operations in the Kraków Technology Park – part of the special economic zone, easy access to the European highways – A4 and therefore, possibilities of connecting throughout Europe makes Kraków an attractive place for investment.”
Raport on BPO opportunities in Poland, Colliers International, 2008

Cracow www.krakow.pl
“General information
Cracow is located in the southern part of Poland on the Vistula River, at the foot of the Carpathian Mountains. The city dates back to the 7th century. It was the capital of Poland from 1038 to 1596. Today it is the capital of the Malopolskie Voivodeship (Lesser Poland Province) and Poland’s second largest city.
The city has traditionally been one of Poland’s leading centers of scientific, cultural and artistic life. Each year it attracts over seven million local and international tourists. Cracow’s cultural wealth is internationally recognized. In 1978 Cracow’s Old Town, the Wawel Castle and the Kazimierz district (the historical centre of Cracow’s Jewish social and religious life) were registered on the list of UNESCO World Heritage Sites and in 2000 Cracow was nominated as the City of European Culture. Cracow is also a city closely linked with John Paul II. The future Pope, who was born in the nearby town Wadowice, came to study in Cracow in 1938 and lived there for many years before being elected by the Papal conclave as the Head of the Roman
Catholic Church.
FDI and BPO/SSC sector
In the past, the main focus of Cracow’s economy was heavy industry, but in recent years the city has turned towards services and in particular the high-tech branches of the economy like offshoring of information technology (IT). Cracow’s current economic landscape is becoming more and more represented by large international corporations, like Motorola, Google or IBM, Comarch, Ericpol, Google, Grupa Onet.pl, HCL Poland, IBM, MAN Trucks, Meiller Polska, Motorola Polska Electronics, RR Donnelley, Shell Polska, ABB, Accounting Plaza (Ahold), Affiliated Computer Services, Alexander Mann Solutions, BP, Comarch, Delphi, Electrolux, Google, Hewitt Associates, Hitachi Data Systems, IBM, International Paper, Lufthansa, Motorola, Philip Morris, Pliva, RR Donnelley, Sabre Holdings, Shell, State Street Corporation, Tesco, UBS […]”
Poland as the destination for Shared Services Centers, KPMG, 2009