Where Next? - The CEE: Central Eastern Europe
Why CEE? - Benefits
CEE has become the go-to market for shifting supply chains from Asia to Europe.
All of the countries in CEE have seen rapid economic growth in recent years, making them attractive markets for foreign investors.
The countries have a proven over 30-year track record of democratic reforms and stable growth making them safe choices in turbulent times.
Skilled workforce: CEE is home to a large pool of well-educated and skilled workers, it has above average share of STEM students, most of the university graduates speak fluent English and often other foreign languages.
Strategic location: CEE’s geographic location at the crossroads of Europe and Asia makes it a strategic hub for trade and investment.
Well-developed and modern infrastructure that has been recently built utilizing the EU funds.
Low operating costs: Compared to Western Europe, operating costs in CEE are relatively low, making it an attractive location for companies looking to with EU: Many CEE countries have undergone significant reforms and are integrating with the European
Why CEE? - Challenges
Majority of the Central and Eastern European countries are facing demographic challenges such as an aging population, declining birth rates. However due to low unemployment rates they have been go-to markets for non-EU labour migrants.
Political instability and polarization in some CEE countries could pose challenges to economic growth and investment. It could also impact the business environment and the rule of law.
Some CEE countries are facing a shortage of labor, particularly in sectors such as IT, engineering, and healthcare. This could impact the competitiveness of these countries and the ability of businesses to grow and expand.
While many Central and Eastern European countries are making efforts to transition to renewable energy sources, they face challenges such as the availability and affordability of green energy, as well as resistance from fossil fuel industries and political opposition. These challenges could impact the sustainability and competitiveness of these countries in the long run. Union, providing a stable and predictable business environment for investors.
Why CEE?
Central and Eastern Europe (CEE) has been a go-to destination in Europe for foreign direct investment (FDI) for over 20 years. The region has successfully attracted major manufacturing and business services investments. CEE has been praised by multinationals for its skilled and price-competitive workforce, proximity to major West European markets, quickly developing infrastructure, and political stability. Recently, CEE has become the go-to market for shifting supply chains from Asia to Europe. With increasing concerns about the reliability and cost-effectiveness of Asian supply chains, many companies are looking to diversify their production and distribution networks. CEE offers a favorable alternative due to its proximity to major European markets, enabling shorter lead times and reduced transportation costs. However, the popularity of the region has resulted in an overheating labor market, growing labor costs, and limited availability of industrial space. Moreover, some of the governments in the region are challenging the rule of law, leading to deteriorating relations with the EU and limiting the flow of EU funds to the region. Last but not least, the differentiated approach of CEE governments to investment incentives (subsidies) provides great opportunities to negotiate attractive investment deals and lower capital expenditures and operational costs in certain locations. Overall, CEE remains the most attractive place in Europe for most FDI projects. However, with significant disparities not only on a country but also regional level, careful site selection is key to successful project implementation
