From Prague Post: Ambitious Brno gains on Prague Companies tout educated work force as main attraction By S. Adam Cardais Staff Writer, The Prague Post June 21, 2006 A few miles off the D1 highway in Brno, south Moravia, just past the rows of blue and gray prefabricated housing that sits on the outskirts of this city as a reminder of the communist past, is the Spielberk Office Centre. Spielberk, which celebrated its first anniversary June 16 with an all-day event, is one of Brno's few class-A office parks, with marble floors, flat-screen televisions and rooftop terraces in its buildings. Surrounded by yellow cranes and steel skeletons, Spielberk is still under construction but is already home to multinational companies such as GE. By 2008, when the 2.8 billion Kč ($124.2 million) park will be complete, it should house 100 companies and 6,000 people, or slightly more than 1 percent of Brno's population. Brno is a city embracing transformation. Long known best among business people for having the country's largest fairgrounds, the city is emerging as a magnet for foreign investment and a center for international commerce. "Brno has been doing well in the past couple of years," says René Samek of state inbound investment agency CzechInvest. "It had a slow start because companies that were interested in coming to the Czech Republic were interested in Prague." The country's second-largest city has stepped out of Prague's shadow. It has attracted the eyes of IBM, Lufthansa and Symbol Technologies. This year, it won fDi Magazine's European Cities and Regions of the Future 2006/07 award for Eastern Europe/Visegrad. CzechInvest is also in the middle of mediating several deals with electronics and precision engineering companies interested in Brno. "It's really happening here at the moment," says Remon Vos, managing director of CTP Invest, the development company behind Spielberk. "There's really a lot going on." 'You have to create' There's a host of reasons that come up in any recent discussion about setting up shop in Brno. The city government, which didn't respond to calls for comment on this story, has done its part, allocating land and spending money on infrastructure to attract investment. And it's benefited from the influx of multinationals, seeing gross domestic product increase 14 percent last year. But there's more to it than that. In terms of investment appeal in Central and Eastern Europe (CEE), Brno has always had assets. It's centrally located, has two top-rated universities — the Czech Technical University and Masaryk University — high unemployment and low labor costs. But for many years it had two things working against it. Prague was the first. For much of the '90s, investors focused on Prague because there was still plenty of room to build office parks and many skilled, educated people without jobs. Now space is limited and unemployment is below 3 percent. Infrastructure was the second major problem. The Brno airport didn't have any direct flights to other European cities until last year, and the city has suffered from a dearth of office space, which is one reason CTP Invest became interested in it. CTP Invest has been in the Czech Republic since 1998 and started developing in Brno in 2001. Vos says his company realized the city's potential — primarily its population of more than 60,000 students — and took a risk building two business parks on the bet that companies would see the opportunity to tap into a young, educated work force as well. "You have to create," Vos says. "You have to make sure there's accommodation to give the companies a chance." The gamble paid off. Executives mention the student population first when talking about why they chose Brno over other CEE cities, including Prague. Ratnesh Mathur, vice president and center head of Progeon, the daughter of an IT services firm with its headquarters in India, says this was the deciding factor in choosing where to locate its new European service center two years ago. Progeon employs 120 people in Brno and wants to create 300 more jobs this year. It will eventually occupy an entire building at Spielberk. Mathur says he's seen Brno change dramatically in the past two years and, like many companies, thinks the town is living up to the potential Progeon noticed from the start. "We're very happy to be here because we saw this coming," he says.