Despite many of these cities experiencing a slump, they did not fade into obscurity. Since the start of the 21st century, many regional European cities have been reinventing themselves and revitalising their economies with their own strategic vision, technically skilled workforces, and governmental support. While capital cities will always be a vital entry point and centre for foreign investment, secondary and tertiary cities continue to garner more attention as they often offer an easier investment environment, with lower costs, state incentives, and simply more room to grow.
In response to a range of factors that seem to widen each day—such as rising geopolitical tensions, environmental pressures, and emerging industries—these once-thriving industrial cities are today well positioned to cater to Europe’s emerging demands and opportunities, and they know it.
Enter Ostrava: From “Steel Heart” to High-Tech
Ostrava, the Czech Republic’s third-largest city and capital of the Moravian-Silesian region, is a prime example of the transformation and growth capabilities of a former industrial stronghold.
In 1873, at the peak of the Industrial Revolution, Vítkovice Mining and Iron Corporation was founded in Ostrava by Salomon Meyer von Rothschild’s heirs. It was the largest coal and steel production site in the Austro-Hungarian Empire and remained strong throughout the turbulent 20th century, earning Ostrava the moniker “the steel heart” of the former Czechoslovakia.
As was the case at many other coal and steel production clusters, the 1990s brought change to Ostrava. New economic structures and environmental concerns caused the city’s coal and steel production to reel back significantly.
Rather than fade into economic irrelevance, Ostrava systematically evolved itself by building on its industrial heritage and fostering new economic ecosystems. Like many smaller European industrial cities, Ostrava became a place that “awaited its transformation,” as the city’s Deputy Mayor, Dr. Lucie Baránková Vilamová, puts it. “The positives were a strong industrial tradition and people who were used to working hard, but the main negative was the decline of heavy industry, which brought unemployment and created ecological problems,” she recalls.
A Successful Strategy
According to Vilamová Baránková, the initial step was leveraging incentives from the national government, which encouraged the cleanup of former industrial sites. This was followed by the creation of a strategic plan with an American development consultancy to advise the city on how to design and prompt its new economic growth.
The consultants suggested that the city undertake two projects, Petr Rumpel, Head of the Department of Human Geography and Regional Development at the University of Ostrava, explains. “The first was to establish an economic development department to work on attracting outside investors, and the second was to prepare building sites for new investors.”
At the same time, cleanup of some of the old industrial sites began, according to Vojtěch Peřka, Senior Business Developer, Central & North Moravian Region, for CTP. “Fortunately, the Czech government in the 1990s allocated a significant amount of funds and guarantees to those who first acquired brownfields,” he explains.
Ostrava’s universities began to retool as well. VŠB-TUO, for example, had previously specialised in mining. Today, its strengths include computer science, economics, and materials science and technology.
Gaining Traction Among Investors
“Ostrava really began to wake up around 2004,” says Baránková Vilamová. At that time, outside investors began to take stock of the city, and several major public commitments made a big difference in creating momentum. One in particular noted by Rumpel: Remon Vos, the founder of CTP, made an early move and invested in the southern part of the city.
With investor interest on the rise, Ostrava succeeded in attracting several big-name foreign companies to the city, most notably Hyundai, which built an assembly plant in nearby Nošovice that employs 3,000 people, followed by the Korean carmaker’s tier-1 suppliers, which have created another 7,000 jobs.
“The arrival of Hyundai and the range of companies supplying components to the Hyundai plant completely transformed the region. Previously reliant on coal mining and steelmaking, it became a region where the largest share of GDP and the labour market was connected with the automotive industry,” says Baránková Vilamová.
