Lviv’s Link to the Capital

  • Lviv’s Link to the Capital
Issue 15, July 2009.

What are the key factors attracting potential international investors to Lviv?

Even though the entire world is currently experiencing a very difficult period economically,
interest in Lviv’s tourism sector has remained consistently high. The sector evidently has huge potential and this has proved attractive even in the current challenging economic climate. In the last month alone I have met with a number of investors who are interested in investing into the new airport terminal project or other aspects of our infrastructure rejuvenation plans connected to Euro 2012. Lviv’s tourism potential is so great that these investors are confident they will be able to see a good long-term return on their money. If today we talk about attracting one million tourists a year, within five years this figure could be four million. It is also clear that the strategies adopted by the City Council to promote the growth of the tourism sector are proving effective, which helps generate confidence among potential investors. Besides, in April 2009 Lviv was named Cultural Capital of Ukraine and will hold this title until mid-2010.

How strong is the Lviv brand among the international investors you communicate with in Kyiv?
UEFA General Secretary David Taylor put it well when he said of Ukraine’s four potential host cities: “Kyiv is the capital with everything you would expect to find in a capital city. Donetsk is the home of Shakhtar, Kharkiv is a city of beautiful Ukrainian girls, and Lviv is quite simply a postcard.” Not everyone knows about the beauty of Lviv, but even those who only know the city as a dot on the map are increasingly appreciating the advantages of its position. Lviv’s geographical location is a big plus. From a logistical point of view it makes Lviv ideal for transit and easy access to European markets.

What makes Lviv stand out as a compelling investment opportunity among Ukraine’s many rival regional capitals?
It is well-known that Lviv is the most European city in Ukraine both in terms of geography and mentality, and this suggests an environment in which many investors feel more comfortable. I am finding that more and more companies which are not yet present on the Ukrainian market but which would like to enter are now looking at setting up their Ukraine offices in Lviv rather than Kyiv. One reason is economic – in Lviv everything from real estate to personnel costs are significantly lower than in Kyiv. Other companies, once they become accustomed to the Ukrainian market and learn more about the different regions of the country, are also deciding that it makes more sense to establish a base of operations in Lviv. It is also worth noting that Lviv is one of largest educational centres in Ukraine with more than 60 universities and over 160,000 undergraduates studying here every year. As a result the city boasts a wealth of human resources for employers throughout the region.

Which areas do you think have the most potential for international investment growth in the coming years?
The two sectors that stand out as particularly attractive are tourism and IT. The huge tourism potential of Lviv is already being exploited and has succeeded in attracting a lot of investors to the market, while the city also has a wealth of young IT talent whose professionalism is proving an enticing proposition for international IT investors and computer technology outsourcing operations. Luckily, Lviv has a wide range of institutes and universities focusing on IT which are already producing the next generation of computer programming professionals, so this should guarantee the continued growth of this sector.

The ‘Ukraine Competitiveness Report 2009’, which is published by the Foundation for Effective Governance in partnership with the World Economic Forum, Lviv is among the top ten regions in Ukraine with the highest competitiveness index.