Analytics, Economics, EU – Baltic States

Vilnius.

The survey compares nine cities in the region: Kiel and Rostock in Germany, Poland's Gdansk, Vilnius of Lithuania, Riga – Latvia's capital, Tallinn of Estonia, Turku of Finland, Umea of Sweden and Aarhus of Denmark. The evaluation of potential in the study is based on the assumption that competitive advantage not only depends on traditional factors, such as real estate prices, transportation costs and the labor force, but that it also depends on factors with indirect effects on the economy, such as innovation, expertise and openness, reports ELTA.

Based on all these factors, Vilnius, together with Riga and Gdansk, ranked in the group with the worst potential, far behind both the lead group of Turku, Umea and Aarhus and the middle group of Kiel, Rostock and Tallinn.

The survey shows that Vilnius has serious problems in terms of innovation and level of knowledge. Concerning innovation, the authors of the survey emphasize that the investment Vilnius makes into research and technological development, at just 0.76% of gross domestic product (GDP), is less than half of the European Union average of 1.9% of GDP. They also point to the fact that research facilities are poorly funded and scientists earn a pittance, which has led to the loss of intellectual and professional personnel.

According to the survey, Vilnius, with 135 university students for every 1000 residents is well above the EU average, yet the city is falling behind the rest of Europe in terms of people employed in the knowledge economy sector.

The authors value the multi-cultural nature of Vilnius as well as the fact that the number of employed women in the city is above the EU average.

However, the survey states that residents of Vilnius face many challenges when trying to reach a balance between their family and work. According to the research, this fact relates to the poorly developed system of nursery schools and kindergartens in the city.

The research was carried out by the Hamburg Institute of International Economics in cooperation with the Hamburg office of the professional services firm PricewaterhouseCoopers.