Like it or not, tech startups are the future. President-elect Trump may want to shift the focus on infrastructure and making America (and it’s roads or airports) great again, but for Europe further investment in technology is the key. One Central European city seems to be getting it right.
We’ve seen it at the WebSummit in Lisbon – there’s no way you can (or want to) miss the breaking point in AI, machine learning, Internet of Things – particularly for the industry – as well as bio-, fin- or med-tech. This is where the money is to be made and where the future of work lays. Scouting and doing all we can to assist tech startups in their struggle to grow and innovate is a must for Europe. Poland will realise that and find itself on the frontline or waste much of its economic advances of the last 25 years.
Another Silicon Valley wanted?
Few cities are getting momentum and may win in the game. Kraków, historical capital and a no. 1 tourist destination in the region is about to become one of the startup hubs for Central and Eastern Europe. Not yet there, though. – We will not have another Silicon Valley here. Ever. We miss the components needed for replicating that ecosystem. And, even if we start expanding now, we can’t catch-up with their growth which builds on itself – Wojtek Burkot, previously heading Google engineering centre in Kraków, made the argument at the Open Eyes Economy Summit, mid November. – But Kraków’s unique assets can be still used to develop a thriving corporate and startup environment. Starting with a fast growing number of multinational corporations operating here. Let’s check the data behind this.
For the past 5 years, in Kraków, corporations grew by 20% each year – making shared services, outsourcing and IT centres the biggest industry and the most promising employer ever. Current headcount – 60 thousand people in a city of just over 800 thousand (2nd largest in Poland), average age – 28 and 80% are graduates of local universities (source: ASPIRE association). It may sound surprising but Kraków tops the list of European locations for outsourcing, prepared by Tholons annually, and holds 9th place globally with only Asian mega-cities above.
A snowball that heats-up the party
Many factors added up to make it happen, including a reasonably lower cost of running a business compared to the capital, but a whole generation of people speaking foreign languages and hungry for a career in an international environment is not to be taken lightly. – Few corporations, such as Motorola, broke the ice here in the not-so-wild-East, and over the course of 10 years we saw a snowball effect. With one brand attracting another, we witnessed a critical mass and a mature market being built. – Paula Mazurek has some first-hand experience as she made her way through several IT/R&D centres in town and recently headed allegro.tech program run by engineering centre for one of Polish top internet companies (Naspers group). – Now over 160 corporates operate centres in Kraków with Google, IBM, Cisco, ABB, HSBC and other global giants. This – among other elements including technical universities and EU funds available for driving R&D, innovation and growth – makes a good environment for corporate-startup collaboration.
Around 2500 startups in Poland so far struggled to attract attention (and money) from local or central government. There are several cities with more or less active start-up communities, the biggest, unsurprisingly, in Warsaw (the capital) – where you can find most of the investors too. Kraków, administrative centre of Małopolska region and a hub for most of the Southern Poland with some 3 million people within 100km radius, wants to repeat its corporate success. Currently 11% of Poland’s start-ups are located in the city, which is again second after Warsaw.
Boosting start-up talents
With 200 thousand students in Kraków, its start-up community of some 250 companies and over 3000 people is alive and kicking. – Last weekend we partnered in Smogathon with 28 teams from 3 continents competing for 25,000 EUR in cash – a hackathon-style bootcamp to fight air-pollution. 24 hours of non-stop (de-)mentoring was quite a challenge but we loved some of the projects and are now talking to them about further support. – Paula Mazurek, who run Google for Entrepreneurs in the city (4th edition globally) is currently the CEO of Bitspiration Booster, an accelerator run by a team of experienced corporate professionals and start-up veterans – We see all the bits and pieces in the city to create a healthy ecosystem, with corporates – especially in tech areas – and start-ups building a win-win relation. We set up the program to scout and match teams of talented founders with our well-developed corporate network.
The central government starts sending promising signals too, with a pilot fund of 15 million EUR to facilitate corpo/start-up collaboration and more planned. Within this “ScaleUp” program, Kraków Technology Park (KTP) secured some 1,5 million EUR for its 15-months project. – This is a good move and we are supporting KTP’s efforts, but what we need now most is to spread the news in Europe, US and globally. Looking for start-up investment potential? Can’t miss Kraków’s offer! – says Paula Mazurek.
The recent success stories of CD Project Red (creators of “The Witcher” computer game), Estimote and Kontakt.io (beacon technology leaders) or Silvair (about to launch an IoT lighting system based on their newly established Bluetooth Mesh global standard) support her argument. Kraków is yet to show that its top European outsourcing status, mixed with highly educated and motivated talent pool and a growing interest in high-tech, scalable businesses will trigger a leap. And when it does, you want to be there first!