Prague is the second fastest developing city in the European Union, thanks to aid from world trade exposure and high increase in the educated workforce.
This stems from the CEE Investment Report entitled “Thriving Metropolitan Cities,” which analyzed 200 cities and ranked them according to GDP per capita, “human capital,” and city connectivity based on the number of passengers at local airports.
Irish Dublin became the winner of the ranking. Prague has risen to the top by attracting foreign investors to a highly educated workforce that exceeds the EU average and can be compared to, for example, Paris and Madrid. After Prague ended Wroclaw, followed by Sofia, fifth is Košice.
“Few people realize that the quality of life in the largest cities in Central and Eastern Europe, such as Warsaw, Prague and Budapest, is almost comparable to Western Europe. It is not as high as it is in Paris or London, but is approaching some of the renowned Western cities, such as Rome or Madrid,” says a study published by Skanska, Dentons and Colliers International.
In general, the cities of Central and Eastern Europe (CEE) dominate the European Union’s list of fastest growing metropolitan areas. CEE cities ranked 20 out of 20 on the ranking.
Warsaw and Prague may even become the second Milan or Berlin in the future. “There will be only two or three world cities in Europe, such as London, Paris or, to a lesser extent, Frankfurt. Then cities like Milan or Berlin are a bit lower, and Central European capitals can find their place at this level,” says Michael Batty, a British urban planner and geographer, and a professor at University College London.
It is also a fact that Eastern European cities still have nowhere to grow. “The last years have been particularly good for the region. GDP growth remained strong despite the onset of a slowdown in the euro area. In 2018, the difference in growth between CEE and the euro area was the largest since the last financial crisis. The explanation is the very strong growth in consumption due to wage growth, ”says the study. Another factor is the relocation of production from Western Europe to Central and Eastern Europe, both in terms of industry and services.
Regarding foreign investment, the authors of the study note the influence of Asia. Since 2013, the CEE region has accounted for less than 3 percent of all capital spent by Asian investors outside their continent. This year, however, this number jumped to 9.5 percent.
South Korea dominates Asian investment in CEE. In the first half of 2019, South Korean companies invested 686 million euros (17.6 billion crowns) here, overtaking German investments. In this context, the study expresses its surprise at the excellent air connections that Asia cities such as Prague have.