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Reports on major Polish cities Bydgoszcz

2011 The results presented are based on the assumption that the information obtained from sources This analysis is a certain interpretation of the data received and cannot be treated as a final other than PwC is complete and accurate in all respects. PwC assumes that the data and the recommendation, or advice on the choice of methods of operation or as a suggestion regarding responses are truthful and, therefore, the data received was not reviewed or otherwise verified. the application of specific solutions. This document should not be treated as a substitute for consultation with professional advisers. Accordingly, PwC does not accept liability to any entity, which will use the information contained in this analysis without consulting a professional adviser. Despite many difficult years of transition We have now repeated this process, with in Poland, sound market-based economic, a number of key enhancements. We increased democratic and socio-political institutions the number of cities analyzed from 7 to 11, have been built, enabling civic activity added a number of indicators that were to flourish. Cities have taken more and more not available in 2006, and have also been able responsibility for their own strategic to assess the rate of change evident between decision-making, and for delivering ever greater 2006 and 2010 on the basis of the differences affluence and quality of life for their residents. between the two reports. The European Union’s “Leipzig Charter” sets The level of development capital in Polish cities out urban development principles, stating that today is a legacy of past events in the region. development should strive to be sustainable, Polish cities suffered many years of slow growth, Bydgoszcz to satisfy economic prosperity, social followed by a transformation during which equilibrium, environmental, cultural and health a great deal of painful economic restructuring goals, and to deliver effective democratic was necessary. It experienced rapid, sustainable institutions. Poland’s membership of the growth between 2005 and 2008, only European Union has meant that Polish cities to find itself hit by the global financial crisis. After a number of difficult decades, Polish cities have now set have had unprecedented access to development The accompanying radical increase in funds funds to help them to reach these goals. themselves on a path of rapid development that offers them from the European Union budget for regional the opportunity to catch up with other Western European In the previous version of this report published development offered Polish cities cities and greatly enhance the quality of life of their residents. in 2006, we principally tried to estimate the opportunity to markedly improve where cities were at in terms of their access development capital in the seven key areas. It is doubtful whether Polish cities have ever before had such to \ development capital at the point where However, the accumulation of development a tremendous opportunity. their growth was just taking off. In accordance capital is necessarily a long-term process, with a methodology developed by PwC and it is often only after years that the payoffs (formerly PricewaterhouseCoopers) for residents, in terms of increased income, we identified “seven capitals”, each of which economic activity and quality of life, are evident. relates to a crucial area of development, and then estimated each from number of selected indicators.

Witold Orłowski PwC’s Chief Economic Advisor

Reports on major Polish cities Bydgoszcz 1 Table of contents

Methodology 3

Study results 6 General observations

Bydgoszcz 9 Key conclusions and recommendations

People 12

Quality of Life 17

Image 23

Institutions 27

Infrastructure 31

Finance 36

Investments 42

2 Every city must have a certain amount of development capital in order to develop. Over the past few years, Polish cities have managed to clearly increase this capital.

Methodology

The seven types of capital of Polish The measurement of the growth potential cities of Polish cities is based on a methodology developed by PwC (formerly Over the past few years, Polish cities have it PricewaterhouseCoopers). It is based on the Cap al substantially increased their capital. However principle that solid development requires in many ways, they still find themselves lagging a number of different resources, termed the Institutions behind the cities of western Europe that they city’s “capitals”, to be present at the same time. seek to compete with and be compared to. Finance We mostly commonly think of the term There are likely to be large amounts “capital” in a financial sense. However, modern of development funds available to Polish cities economics uses and understands the term in the coming years. The purpose of this report much more extensively, as applying not only Infrastructure Investments is to evaluate the level of development capital to money but also to resources like of Polish cities now. In doing so, it offers the qualifications, knowledge and experience a perspective on the major strengths of a population (human capital), the number Image and weaknesses of Polish cities that will and quality of their interactions (social capital), People support the development of clear strategies and even the value attributable to the way Quality of life and priorities to enable Polish cities to make a city is perceived (image capital). These each the best use of those funds to achieve their represent necessary resources for development, goal: to transform themselves into modern, and only with skilful investment over years flourishing vibrant population centres. will they mature.

Reports on major Polish cities Bydgoszcz 3 A city with high development potential is a city with all 7 capitals well and evenly developed.

Methodology

Seven development capitals • Quality of Life Capital (QLC) reflects the A city with high development potential is a city Apart from measuring the level of development living and working conditions the city offers. with all 7 capitals well and evenly developed. of the 7 individual capitals in the 11 cities In analysing the development potential It consists of such ingredients as the state If one of the capitals is less developed, this in 2010, the study also tries to measure of Polish cities, we use the concept of the natural environment, level of health suggests weakness – and indicates a direction the change in the capitals that took place of 7 capitals, each of which is important care, quality of educational institutions for strategic remedial action. between the last and present editions of the for the city’s development: and people’s sense of security report, i.e. 2006-2010 (noting that the previous All of the indicators are defined and calculated edition covered only seven Polish cities.) • Human and Social Capital (HSC) defines • Technical and Infrastructure Capital (TIC) in such a way that a higher value indicates the quality of human resources at a city’s relates to the infrastructure, as broadly that the capital is of a higher quality. Due to methodological differences, a direct disposal. This includes the knowledge defined, of a city: its housing stock, roads, It is always measured relative to the average comparison of the changes between 2006 and qualifications of its workers, transport systems, as well as shopping for the 11 cities surveyed, which is 100. and 2010 cannot be made; therefore, capital the demographic structure (cities with centres, ATMs and internet access. change is measured using a simplified The report’s authors have made every effort an ageing population are less dynamic than methodology. As such this results in an estimate, • Institutional and Democratic Capital (IDC) to source comparable data, and have used ‘young’ cities) and the social activity of the and caution should be exercised in its use. inhabitants. reflects the efficiency of the municipal the most recent available data (generally institutions (government and administration) from 2009-2010). It should also be noted that, where growth • Culture and Image Capital (CIC) relates and the level of civil society activity. rates are concerned, a lower starting point to how a city is perceived: as an interesting offers greater scope for growth than does • Investment Attractiveness Capital (IAC) and attractive place, or a cultural desert, a higher starting point. This should be factored tells us how strong a magnet the city is for for example. The better the image, in when considering the estimates of growth investors, both foreign and domestic. the easier it is to attract investors to the city provided here. and boost the economic and social activity • Sources of Finance Capital (SFC) specifies of its residents. the extent to which the city is able to obtain cash to finance development.

4 Bydgoszcz Reports on major Polish cities 358 Bydgoszcz: Population in thousands

General data on the cities included in the study

Tri-City Population: 734 k Szczecin GDP per capita: 135 Population: 406 k (Poland=100) How to read the radar charts When analysing the chart, attention GDP per capita: 129 should be paid to: (Poland=100) Białystok in the report? Population: 295 k GDP per capita: 102 A radar chart allows us to analyse the city’s • The size of the image area – the larger (Poland=100) the area, the greater the capital. Bydgoszcz capital in several areas at the same time: the Population: 358 k more indicators being considered, the greater • The shape of the figure – the more GDP per capita: 124 the number of axes on which we place values. (Poland=100) proportional it is, the more balanced Poznań is the development of the individual capitals. Population: 554 k When connected, the points on the axes form Warsaw GDP per capita: 200 “Pulling” of the shape in any direction Population: 1 714 k a shape (triangle, square, pentagon) where (Poland=100) suggests that the capital in that area is more GDP per capita: 295 the number of vertices is equal to the number (Poland=100) developed than the average, while “recession” of axes. These diagrams depict a given city’s along any of the vertices indicates relative Łódź capital development (in red) against the average underdevelopment. Population: 742 k for the 11 major cities surveyed (in grey). GDP per capita: 124 Wroclaw (Poland=100) Lublin Population: 632 k Population: 349 k GDP per capita: 154 GDP per capita: 111 (Poland=100) (Poland=100)

Katowice Population: 309 k Krakow GDP per capita: 197 Population: 755 k (Poland=100) GDP per capita: 155 (Poland=100)

Data on the population from the end of 2009, GDP from 2008 (the latest available CSO data). Source: CSO, PwC

Reports on major Polish cities Bydgoszcz 5 Study results General observations

A good five years The fastest economic development over the Growth index of the economic development of Polish cities, 2006-2010 period 2006-2010 was recorded by Wrocław The past five years (2006-2010) have proven and Warsaw, followed closely by Poznań, Average growth in 11 cites very positive for Polish cities. The country’s Krakow, Katowice and Łódź. A slightly slower development accelerated after Poland’s than average rate of development was Wrocław accession to the European Union, partly due observed in Szczecin, the Tri-City area to the enormous opportunities created and Bydgoszcz. However, the main regional Warsaw by unprecedented increases in regional metropolitan centres of the “eastern wall”, development funds. Importantly, this has shown Lublin and Białystok, developed somewhat Szczecin clear results in terms of increases in income more slowly, despite additional special and quality of life, improved infrastructure, development resources being targeted Poznań and more efficient public institutions. at these regions from European Union funds. The index of economic development* measured This suggests that serious structural problems Łódź for the 11 Polish cities covered by the survey continue to hamper market-driven economic Lublin shows a marked improvement in all the cities growth efforts there. – its value has increased on average by 27%. Krakow

Katowice

Tri-City

Bydgoszcz * representing the weighted average of GDP growth per capita (real) from 2005-2007, growth in real Białystok incomes 2006-2010, and reduced unemployment.

0 10203040Source: PwC

6 Bydgoszcz Reports on major Polish cities Study results Growth of 7 capitals

Development capital increased Of the cities studied, the fastest average Estimated growth of the average value of 7 capitals of Polish cities, 2006-2010 everywhere growth of the 7 capitals was recorded in Lublin, Białystok and the Tri-City area. Average growth in 11 cites Polish cities took advantage of good To a large extent, this is the result of the large development conditions in 2006-2010 amounts of development funding, mainly Wroclaw to significantly increase their development from the EU, that have been directed to Poland’s capital. We estimate this growth to be 16% eastern cities. However, this increase has Warsaw on average, meaning that each type of capital not yet translated into accelerated economic increased, on average, by this amount in each growth among other “eastern wall” cities. Szczecin of the cities studied. Capital grew at a rate that was slightly above Poznań However, development has not been uniform. average in Kraków and Katowice, and slightly The greatest successes were achieved in the below in Bydgoszcz, Łódź, Wrocław Łódź areas of Investment Attractiveness Capital and Warsaw. However, the development and Culture and Image Capital, whereas capital of Poznań and Szczecin increased Lublin the slowest progress was made in the areas noticeably more slowly. It is worth re-stating, of Technical and Infrastructure Capital at this point, that a lower initial level offers Krakow and Quality of Life Capital. This is not surprising, greater scope for growth than does a higher as infrastructure is built up over many starting point, and that this factor may Katowice years while quality of life only increases be influencing these results. as a consequence of sustained successes Tri-Cites in other areas. Bydgoszcz

Białystok

0 5 10 15 20 Source: PwC

Reports on major Polish cities Bydgoszcz 7 Study results The level and growth of 7 capitals of Polish cities

Comparison of capital growth 25%

Białystok Tri-City 20% Lublin Krakow Katowice Bydgoszcz 15% Łódź Wroclaw Poznań Warsaw 10% Szczecin

5% Disparities are slowly declining Relationship between economic

development and the capitals of 7 capitals in 2006-10 per cent Generally speaking, over the period 2006-2010, Estimated growth in the average values 50 75 100 125 150 the lower the starting level in a given city, A high level of development of all 7 capitals Average level of development of the city’s the faster was its average increase in capital, indicates favourable economic development 7 capitals, 2010 (the average is 100) Source: PwC leading to reduced inter-city disparities. conditions, and consequently better quality This trend is so far relatively weak, but it should of life for a population. An analysis of the data strengthen with the adoption of appropriate on the average level of the 7 capitals recorded strategies for city development and the effective in the 11 cities studied, paired with economic utilisation of development resources. development index data for the period Level of 7 capitals and economic success of Polish cities However, we note that in the case of Szczecin 2006-2010, does indeed suggest a close and to a lesser extent Poznań, the estimated relationship between the 7 capitals 40% average capital growth was markedly slower and economic growth. In the case of Wrocław, 35% Wroclaw than might have been expected. the results on economic growth are slightly Katowice Warsaw better than would be expected given its 30% Łódź Poznań Szczecin 7 capital resources. 25% Bydgoszcz Krakow Lublin 20% Tri-City Białystok 15% 10%

index 2006-10 in per cent 5% Increase in the economic growth

50 75 100 125 150 Average level of development of the city’s 7 capitals, 2010 (the average is 100) Source: PwC

8 Bydgoszcz Reports on major Polish cities Bydgoszcz Key conclusions and recommendations

9 Bydgoszcz Key conclusions and recommendations

The city on the banks Bydgoszcz – overall assessment of development of 7 capitals of the Brda river must make every effort to remain attractive Average for 11 cites

Institutions (IDC)

People (HSC)

Bydgoszcz has high development potential, however several Investments (IAC) steps aiming at increasing the city’s accessibility Quality of Life (QLC) and strengthening its image will have to be taken in order to utilise it. The development ratios of seven capitals Image (CIC) are not comparable among large Polish metropolitan areas, Infrastructure (TIC) with the exception of Quality of Life Capital. Finance (SFC)

40 60 80 100 120 140

Source: PwC

10 Bydgoszcz Reports on major Polish cities Bydgoszcz Key conclusions and recommendations

However, it is justified to say that Bydgoszcz Good result recorded in the area of daily life is one of the leaders among the developing culture and city life quality (including City’s biggest strengths: cities. It definitely has good conditions for this. the highest healthcare quality ratio) may be It seems that Bydgoszcz's development Bydgoszcz’s great attribute in building its •High quality of life, including the highest healthcare is limited by relatively weak transportation image. Bydgoszcz's Human and Social Capital, quality ratio. accessibility and insufficient infrastructure which is average when compared to other development. It should be expected that this cities, may be considered the city's limitation. •Very good image in the area of daily life culture. situation will change after the A1 interstate Perhaps a good idea to that effect would be to •High effectiveness in obtaining EU funds. highway from Gdańsk to Warsaw is fully better utilise the advantages of being located completed. Inconveniences related to limited in direct vicinity of the city of Toruń. It should access by road and rail (lack of correct be noted that the Investment Attractiveness Major challenges: connections with the metropolitan areas) Capital is low when it comes to foreign are neutralised thanks to the airport. investors and general conditions of investing, •Improvement of city’s overall image and image however it is relatively high when it comes in the area of high culture. It should be emphasized that despite low to domestic investors. Investment Attractiveness Capital, the city •Stimulating the development of Human and Social was not completely ignored by the investors. Capital and using more effective methods to attract It should be expected that Bydgoszcz will foreign investors. effectively attract new companies (also because of better transportation), however, for this purpose, actions will have to be taken to strengthen its image.

Reports on major Polish cities Bydgoszcz 11 People are the most important and the most valuable resource determining a city’s chances for development. There is no substitute for people’s skills, their willingness to work, and the business and social activity they engage in.

People

Why do we measure Human However the reality is a little more complicated. Measuring Human and Social and Social Capital? Human Capital influences the community’s Capital (HSC) The overall demographic situation economic development and improves its in Bydgoszcz is good – it is not People are the most important and the most quality of life in less obvious ways, such as The Human and Social Capital score constitutes significantly different from other cities valuable resource determining a city’s chances reducing corruption, fostering long-term an aggregate measurement of the value (this ratio is steady in all cases). The share for development. In the modern world, it is investment and disseminating knowledge, of a city's human resources, taking into of persons in post-employment age possible to buy almost anything. You can rent preventing abuse of common goods, speeding account the following five characteristics: is close to the average value for the 11 an advertising agency to promote a city, find the investment process (by reducing the demographics, education, and citizen’s analysed cities (18.9% compared investors to provide funds for infrastructure probability that administrative decisions will attitudes towards the free market, labour to average value of 19%). On the other development, and build efficient administration be appealed). In addition, through development market activity and civil society engagement. hand, the demographic burden ratio and online systems for providing services of the third sector, it is conducive to greater is equal to the maximum value for to inhabitants. But there is no substitute social control over actions taken by authorities. HSC: demographics the analysed cities i.e. it is 0.55, which for people’s skills, their willingness to work, (Source: Social Diagnosis 2009.) means that for each two persons in the The demographic make-up of a city is one and the business and social activity they employment age there is a little more of the most important determinants of its engage in. In the longer term, it is the people The value of Human and Social Capital depends than one person in pre-employment Human and Social Capital and is, in the first – the Human and Social Capital, being a set on many factors. Some of them can be or post-employment age. The childbirth instance, defined by its age structure of characteristics describing the human influenced only to a relatively small degree ratio is close to the average value and the number of very young children. resources – that determine a city’s economic (e.g. demographic structure). It is also not for the analysed cities (9.9 compared The basic demographic criteria used development and its success. Human Capital possible to force people to conduct business to average value of 10). is typically associated with intellectual or social activity – although attempts may be to measure HSC include the demographic resources while Social Capital describes the made to encourage them to do so and facilitate burden ratio, the share of elderly in the city’s With the average level of HSC of 100 quality of the civil society. It is easy to imagine any initiatives to that effect. However, population, and the number of births in terms of demographics for the 11 that the level of Human Capital – people’s in certain areas e.g. in education or on the labour per 1000 inhabitants. compared cities, the value of HSC intellectual capabilities and skills – translate market, the potential for action on the part in Bydgoszcz is at the level of directly into economic development. of municipal authorities is quite high. 98.6.

12 Bydgoszcz Reports on major Polish cities In a modern economy, the quality of the human resources of a population is determined largely by its skills.

People

HSC: education Here, HSC is measured in terms of share of persons with university and high school According to the adopted indicators used In a modern economy, the quality of the human educations, the number of high school for measuring the education of general resources of a population is determined and university students per 1000 inhabitants, public, amongst the surveyed cities largely by its skills. Measuring this therefore and newspaper readership (the percentage Bydgoszcz is on the same level as involves measuring the average education of people who regularly read one of the three e.g. Białystok or Łódź. This is influenced of the inhabitants: the better their education, main national dailies). These last two were by the lowest – amongst the surveyed cities the higher the city’s attractiveness in terms introduced in this year’s survey, which – share of inhabitants with university of investing and conducting business activity. reduces the direct comparability of HSC education (14.3%) and with university With the importance of the information society with earlier reports. and high school education (51.5%). and the knowledge-based economy, it is Both of these ratios are considerably impossible to ignore such aspects of education below the average values for the analysed as knowledge of information and communication cities. However, it should be noted that technologies, knowledge of foreign languages, the per capita number of students is not and access to education and training in these the lowest among the analysed cities – it is areas when discussing Human Capital slightly above average and it is considerably attainment. However, in order to avoid higher than for Wrocław, Tri-City the repetition of similar indicators or Szczecin. for the individual Capitals, these aspects With the average level of 100 for the have been taken into consideration 11 cities, the value of HSC in Bydgoszcz in the Investment Attractiveness Capital in terms of education is at the level of and Technical and Infrastructural Capital. 89.4.

Reports on major Polish cities Bydgoszcz 13 People

HSC: attitudes towards the free market HSC: labour market economy For Bydgoszcz, the ratio analysed The unemployment rate is moderate for this area is considerably below average The labour market conditions, from a Human (6.3%), which ranks Bydgoszcz higher Development is also affected by the attitude for all analysed cities (the share of persons Capital perspective, principally relates to the than Łódź, Lublin, Szczecin and Białystok. of citizens towards the market. In locations conducting business activity is 12%). availability of employees with skills sought by However, it should be noted that such where people are more pro-market, they adapt However, it is the leader among employers. In a city with high Human Capital, value is not typical for all analysed more easily to the demands of the market the analysed smaller cities, and its ratio there should be low unemployment. metropolitan areas – for Poznań, and are more economically active and successful. is higher than for Białystok and Lublin. As such, the HSC indicator regarding the labour Warsaw, Katowice and the Tri-City, the unemployment rate is more than HSC in this area is measured by the proportion Bydgoszcz’s HSC with respect to attitudes market is measured by the unemployment rate, one-half lower. of persons engaged in business activity. towards free market economy is 85.2 both overall and that specifically for youth. while the average for 11 cities is 100. A considerable challenge for the city is the unemployment rate among the youth (17.9%), which is the highest among the analysed cities.

With the average HSC with respect to labour market for the 11 cities being 100, such value for Bydgoszcz is 69.0.

14 Bydgoszcz Reports on major Polish cities People

HSC: civil society engagement The ratio of engagement of the civil A high level of engagement in civil society society in Bydgoszcz is – alongside indicates high Social Capital – people with Szczecin – the lowest among are involved in common interest activities . the analysed cities. In Bydgoszcz, HSC with regard to civil society engagement the values of average voter turnout is measured by access to Internet resources in the elections (53.9%) and and average voter turnout (parliamentary the activity of non-governmental elections in 2007, presidential and local organizations observed on the Internet government elections in 2010). are in the lower part of the range for all the analysed cities.

With the average level of 100 for the 11 cities, the value of HSC in Bydgoszcz in terms of social engagement is at the level of 82.7.

Reports on major Polish cities Bydgoszcz 15 People Summary

Bydgoszcz’s Human and Social This should also positively translate itself into People – Bydgoszcz Capital the situation on the labour market, which is more favourable as compared to other The city’s demographic situation is favourable. similar cities, however it is still less favourable Qualifications The level of engagement of the civil society than in large metropolitan areas. and the level of education are moderate. 160 The city’s activities aiming at improving The long-term strategy for building the city’s 140 the situation in this regard should focus Human and Social Capital should also include 120 on the areas related to stimulating social support for education. 100 engagement and entrepreneurship. 80 Social activity Demographics 60

40

20 With the average level of 100 for the 11 cities, the value 0 of Bydgoszcz’s total Human and Social Capital is at the level of 85.0. min. in 11 cities city max. in 11 cities

Rynek pracy Market orientation

16 Bydgoszcz Reports on major Polish cities Quality of Life

Why do we measure Quality The quality of life in the city is made up of Measuring Quality of Life Capital In our reports, these are covered in the Culture of Life Capital? many factors. The condition of the natural (QLC) and Image Capital or the Investment environment is one important aspect, as are Attractiveness Capital. If a city wants to succeed economically Quality of Life Capital largely determines the access to good quality medical and educational in the long term, it must provide good living extent to which the city is considered a good However, considering the importance services. A sense of security is of tremendous of healthcare and sense of security to the conditions for its inhabitants. A high quality place to live and work. It is the most debatable importance. The best entertainment centres overall quality of life, we decided to stay of life in a city will cause people to decide to live capital (besides Culture and Image Capital). and services cannot guarantee that inhabitants It is also the most difficult to present as a single with the definition that was adopted four years and work there, including those who will reject and guests will feel comfortable in the city ratio. In the Polish market there are several ago, which is also consistent with PwC’s offers to move to different domestic or foreign if a sense of security is lacking. indicators that pertain to various aspects of the global methodology. This also allows direct cities, and investors will be more inclined function of a metropolitan area. These include comparability with the previous edition to relocate business activities. A high quality for example the number of cultural events or of these reports. of life also leads to pride and satisfaction with hotels of a given standard. one’s own city, while a low quality of life yields disillusionment and frustration.

Hence, when measuring QLC, we take into account four aspects of quality of life: the condition of the natural environment, level of medical services, level of educational services and sense of security.

Reports on major Polish cities Bydgoszcz 17 Cities with a good natural environment give their inhabitants a much greater sense of comfort and satisfaction with life.

Quality of Life

QLC: condition of natural environment From the standpoint of ratios describing Cities with a good natural environment give the condition of the environment, their inhabitants a much greater sense Bydgoszcz is located close to average of comfort and satisfaction with life. figures for the analysed cities. For example, It should be remembered that in the field the car traffic density ratio remains at the of environmental protection – as in many other level of 1131 cars per km2 vs. the average fields – commonplace opinions are difficult figure of 1199 per km2. It should be also to overcome, and spectacular failures emphasized that the city recorded a very or successes (such as appearance of fish good result in the area of sewage treatment or bird species which have not been seen (100%). Only the ratio of emissions for many years) very frequently have greater of dusts and gaseous pollutants, which impact than technical measurements is less favourable, differs from the overall of environmental pollution. favourable picture.

The selected indicators that we use to measure With the average level of QLC in terms QLC in terms of the condition of the natural of condition of the environment of 100 environment include air pollution measurements for the 11 cities, the value of QLC in terms (emission indices for various types of gaseous of natural environment in Bydgoszcz 2 and dust pollutants), number of cars per km is at the level of in the city limits, capital expenditures 94.8. on environmental protection and percentage of treated sewage.

18 Bydgoszcz Reports on major Polish cities Quality of Life

QLC: healthcare quality The results of the measurement show that the situation The availability of medical services of adequate in terms of accessibility of good quality medical quality is one of the factors that exerts services is very good in Bydgoszcz, even despite lower considerable influence on the assessment number of physicians per capita (which is considerably of living conditions in the city. While below the average value for the analysed cities). certain problems in this area are common Infant mortality rate, which is considered the most to all Polish cities, individual cities also fare synthetic indicator of healthcare’s functioning, very differently. is at the lowest level in the group of the analysed cities The basic ratios selected for measurement and it amounts to 3.7 per 1000 births (the average of QLC in the area of medical services include rate for 11 cities is 6.0). the number of physicians per 1000 inhabitants, The estimated waiting time for an appointment infant mortality rates, and the ranking with the specialist physician is the shortest (except of healthcare centres (by the Centre for Białystok) among the analysed cities. Bydgoszcz’s for Monitoring Quality in Healthcare hospitals are ranked equally high (the value of the ratio and “Rzeczpospolita”), as well as the average is slightly above the average, which gives Bydgoszcz waiting time for an appointment with a given fourth place among the analysed cities). specialist physician. The last two ratios were not available when the previous edition With the average level of 100 for the 11 cities, of this survey was carried out. the value of QLC in Bydgoszcz in this respect is 134.3 and it is the highest among all analysed cities.

Reports on major Polish cities Bydgoszcz 19 Quality of Life

QLC: education quality According to this document, cities are centres for the creation and transfer of knowledge, and Bydgoszcz’s synthetic ratio describing the The quality of educational services is usually the sustainable development of metropolitan value of educational services is the lowest one of the first issues considered when assessing areas should take into account the need among the analysed cities. This is above the overall quality of life in a city. Good schools to continuously increase the level of education. all attributable to the lowest score and highly ranked universities attract new The indicators used for measuring QLC include recorded by Bydgoszcz’s universities inhabitants and are important when making scores recorded by the city’s most important in the university rankings, which the decision to move, either temporarily universities in the university rankings is considerably below the average value or permanently (which results in greater (in “Perspektywy” magazine), the success rate for the analysed cities. The ratios describing availability of highly skilled employees). of high school-leavers in 2009, and results the standing of junior high schools, Good education also facilitates the city’s social recorded on 6th grade exams and junior high high schools and elementary schools and economic progress due to the fact that school-leaving exams in 2008. This indicator (the passing rate of the relevant exams) it positively influences its development is new in this edition of the survey. are close to the average levels for the prospects. Active innovation and education analysed cities. For example, passing policy is one of the main priorities rate of the high school-leaving exams for sustainable development specified by the was 82.5% compared to the average value EU document referred to as the Leipzig Charter. of 83.4% for the 11 cities.

With the average level of 100 for the 11 cities, the value of QLC in Bydgoszcz in terms of education quality is at the level of 71.6.

20 Bydgoszcz Reports on major Polish cities Quality of Life

QLC: sense of security In the area of sense of security, Bydgoszcz Sense of security encompasses many ranks slightly above average for the dimensions: physical security of the inhabitants analysed cities – in terms of the recorded (the crime rate and road traffic safety), crime rate as well as traffic accidents protection from natural disasters and accidents, and collisions per capita. and a sense of security in terms of access to healthcare and job opportunities are all With the average level of 100 equally important. for the 11 cities, the value of QLC in Bydgoszcz in terms of security While measuring QLC for sense of security is at the level of we limited ourselves to the area of physical 109.2. security and used the following indicators: number of recorded crimes and number of traffic accidents per inhabitant.

Reports on major Polish cities Bydgoszcz 21 Quality of Life Summary

Bydgoszcz’s Quality of Life Capital To improve the Quality of Life Capital Quality of Life – Bydgoszcz in Bydgoszcz, it will be important to maintain Bydgoszcz is located in the middle of the ranking, on the high level the ratios which currently Environment however it should be emphasized are above average for the city, and at the same that the ratios recorded in this category time improve the quality of educational 180 by the individual cities were relatively equal. services, especially on the university level. 160 140 Bydgoszcz’s result is negatively affected by low 120 values of ratios describing quality of education 100 and – to some extent – the natural environment. 80 In other categories, especially when it comes 60 to healthcare, Bydgoszcz’s results are favourable 40 when compared to other analysed cities. Security 20 Health Services

0

With the average level of 100 for the 11 cities, the value of QLC in Bydgoszcz is at the level of 102.5. min. in 11 cities city max. in 11 cities

Education

22 Bydgoszcz Reports on major Polish cities Image

Why do we measure Culture early can be clearly seen throughout Poland However, we see participation in the qualifying In sustainability terms, Polish cities are also and Image Capital? and Europe. For the others, changing round itself as important – it has the potential active internationally: 10 cities signed the the image among inhabitants, investors and to start a debate on the how the candidate cities mayors’ agreement declaring limits on CO2 In the modern world and in the modern tourists will necessarily involve long-term should promote their cultural attributes emissions, and 12 cities (all those covered economy, decisions to purchase goods efforts. In this report we decided to avoid and may result in several new initiatives by this analysis plus Rzeszów) belong to the and services are made not only on the basis a detailed analysis of the quality, effectiveness and a comprehensive approach to development EuroCity network which includes the largest of actual values, but also on the basis of our and consistency of activities conducted by in this area. European cities and focuses on challenges opinions about a product. A product’s brand individual cities in the image-building area, as facing the European Union, including climate is an important aspect of this: its prestige, quality As part of city strategies for development and such processes are to great extent evaluated change and social exclusion. and the trust we have in it. A similar principle promotion, Polish cities have been increasingly subjectively. For the purposes of this publication, holds true for cities. In addition to the things considering the sustainability of their we limit ourselves to indicators which that a city offers its inhabitants and companies, development strategies. This is of key are objective and measurable. our opinion of it, i.e. its image, is very important. importance to the cities’ development, their A city that enjoys the image of a robust, friendly As this report is being prepared, some of the image, and the quality of life they will be able and interesting place with a good standard cities being analyzed are facing tremendous to offer in the longer term. Polish cities are of living will attract both tourists and investors. opportunities to shape their image in Europe. increasingly beginning to consider sustainable development issues in a comprehensive and The image of the city depends on many factors. Firstly, Poland will have the presidency of the long term manner; this applies to both larger Since the previous edition of “Reports on major European Union in the second half of 2011, cities and smaller townships. The tasks related Polish cities”, we have seen tremendously and subsequently host Euro 2012. In addition, to implementation of principles and strategies positive changes in Culture and Image Capital these reports were being compiled, it become for sustainable development are also at the strategic and qualitative level. In most known that five Polish cities have qualified increasingly frequently reflected in lists of duties of the cities, image is no longer shaped to compete further for the title of European and tasks for the individual departments by accident but is, to much greater extent, Capital of Culture. For Gdańsk, Katowice, of local government bodies. the result of more or less consistently executed Lublin, Warsaw and Wrocław this means promotional strategies. Positive results for cities very intensive activities in the area of Culture that started regular promotional activities and Image Capital.

Reports on major Polish cities Bydgoszcz 23 Culture and Image Capital is a measure of how the city is perceived – by its inhabitants as well as outsiders.

Image

Measurement of Culture and Image CIC: general image of the city Capital (CIC) Bydgoszcz attracts relatively few tourists General image consists of the city’s overall and it is not properly positioned on the Culture and Image Capital is a measure of how recognisability, its generally recognized Internet and in popular tourist guides the city is perceived – by its inhabitants as well attractiveness, as well as the perception to Poland. The city’s ratios concerning as outsiders. Like many of the capitals, it can of its values by its inhabitants (e.g. traditions traditions of entrepreneurship give rise to lively debates and strong emotions, of honesty and hard work). are slightly better – there are more and the range of potential indicators that can The basic indicators we have used to measure people conducting business activity be used to attain it is very broad. CIC as regards general image are: the number in Bydgoszcz than in e.g. Łódź or Lublin. What is important is the fact that even a broad of “good associations” with the city on the With the average level of CIC in terms selection of available indicators does not Internet (e.g. number of websites with the of overall image of 100 for the 11 always mean a the value obtained is precise, city’s name and the word “culture” in them), cities, the value of CIC in terms of the making the analysis extra difficult. We preserve number of tourists visiting the city, the number city’s overall image is at the level of the methodology adopted four years ago of words a city warrants in a typical tourist and, in measuring CIC, take into account three guide to Poland and tourist opinions expressed 40.3. characteristics: general opinions of the city, on online travel sites, and the observed rate high culture, and the culture of daily life. of entrepreneurship (a new indicator for this edition of the survey).

24 Bydgoszcz Reports on major Polish cities Image

CIC: high culture CIC: daily cultural life For Bydgoszcz, the ratios describing the The Daily Life Culture Capital is one A city’s image largely consists of its activity capital with regard to high culture are A city’s inhabitants and guests form of Bydgoszcz's biggest strengths. Among in the area of so-called high culture. Although on the last place in the ranking. an impression of a city on the basis of the daily the analysed cities, it ranks second after a relatively small percentage of inhabitants This results from the fact that the per capita cultural life: the selection of restaurants, Katowice. However, this is determined and guests use such services, these budget for culture is the lowest among hotels, number of cinemas, number and quality by slightly different premises, namely the are significant cultural events that are more the analysed cities and that there are no of parks, and number of popular mass events. largest per capita number of green areas likely to be publicized in the opinion-making cultural events taking place in Bydgoszcz. The indicators used to measure this aspect (almost three times higher than the media and shape the city’s image as an As compared to other cities and the city of CIC include: the number of cinema seats, average number for all analysed cities) interesting, attractive and appealing place. of Łódź, Bydgoszcz has more favourable number of restaurants, number of sport stadium and the per capita number of stadium The basic indicators selected for measuring per capita ratio of concerts. However, seats (including those under construction, seats. It should be noted that the ratios CIC with regard to high culture include the this figure is still below the average value including planned Euro 2012 facilities) and of important aspects related to quality city's culture budget, the number of concerts, for all analysed cities. In the analysed the green areas within the city's administrative of life (per capita number of restaurants, film festivals, theatre festivals and classical metropolitan areas, the number of cultural boundaries (all per number of inhabitants). per capita number of cinema seats) music festivals, as well as concert attendances events is incomparably higher than are considerably below the average values (all per number of inhabitants). in smaller towns. for the analysed cities. With the average level of 100 for the 11 With the average level of 100 for the 11 cities, the value of CIC in Bydgoszcz cities, the value of CIC in Bydgoszcz in terms of high culture is at the level of in terms of daily life culture is at the 45.8. level of 143.6.

Reports on major Polish cities Bydgoszcz 25 Image Summary

Bydgoszcz’s Culture and Image It seems that in addition to promotion it is also Image – Bydgoszcz Capital recommended to take actions related to strengthening the relevant resources Bydgoszcz’s general image should be shaped influencing the high culture and daily life by the city’s active policy. The ratios suggest culture (in this case, high value of the analysed General image that the city is not recognizable in the world. ratio results mostly from large number of 250 green areas per one inhabitant). 200

150

100

With the average value of 100 for the 11 cities, the value 50 of Bydgoszcz’s Culture and Image Capital is 76.6, which makes 0 min. in 11 cities the city the leader among smaller cities that were analysed city (and also puts it ahead of Łódź). It should be noted that there max. in 11 cites is a clear difference to that effect between the analysed smaller cities and the metropolitan areas. Everyday culture High culture

26 Bydgoszcz Reports on major Polish cities Institutions

Why do we measure Institutional In cities with high Institutional and Democratic Measuring Institutional and Democratic Capital? Capital, it is easier to develop and exercise and Democratic Capital (IDC) a consistent development strategy. Authorities Institutional and Democratic capital determines which are controlled democratically can The Institutional and Democratic Capital the degree to which institutions which manage perform their duties more effectively and have of a city is made up of the quality the city function effectively, e.g. city authorities, a stronger social mandate for managing of the authorities’ actions, the activities public administration and maintenance services. the city, while the activities of the citizens of the inhabitants, and communication It also reflects the level of civic activity supports them on the road to achieving between the authorities and the people. of inhabitants and effectiveness of democratic common goals. This facilitates the achievement mechanisms, as well as the level of success in terms of economic and social and effectiveness of communication development. between the authorities and the society. IDC is measured in three areas: the effectiveness of municipal institutions (authorities and public administration), their performance of the basic function of ensuring public safety, and non-governmental organization activity.

Reports on major Polish cities Bydgoszcz 27 Institutions

IDC: administrative effectiveness The primary indicators used to measure IDC in terms of the effectiveness of municipal The indicators defining the effectiveness of municipal Opinions regarding the city’s authorities and institutions are: administration expenses authorities for Bydgoszcz are above average. administration are based on the experiences (compared to the population), indicators It is worth noting that expenses on administration per of inhabitants and visitors. These judgments of the effectiveness and availability capita are below the average for the analyzed cities, are influenced by the way the authorities of offices indicated by waiting times for entry which shows that the institutions are effective indeed. communicate with the society: whether citizens in the economic activity register, office With regard to the waiting times for the entry are included in strategy development, opening hours that reflect citizens’ needs, in the economic activity register, Bydgoszcz is a leader and whether explanations of the problems and opportunities to use online office services among the cities (it is possible to obtain the entry and goals of various activities is provided. (new in this edition), and the percentage relatively quickly there). A constructive dialog with inhabitants of votes received by the incumbent president contributes to both a streamlined process Indicators defining availability of the municipal office in the local government elections of 2010 of strategy development as well enhanced and opportunities for using web-based office services (also new in this edition). performance, since a document developed assume similarly favourable values, though merely in a such a manner will better take into slightly above the average. The low percentage of consideration the problems facing inhabitants votes given to the incumbent president (who lost and offer solutions. the elections) indicates that the inhabitants evaluate the efficiency of municipal institutions as low.

With the average level of 100 for the 11 cities, Bydgoszcz’s IDC in terms of effectiveness of administration is at the level of 102.0.

28 Bydgoszcz Reports on major Polish cities Institutions

IDC: public safety expenditure IDC: non-government organization With regard to expenses on public safety activity Indicators of activity of non-governmental Assessment of municipal institutions is largely per capita, Bydgoszcz is at a lower level organizations for Bydgoszcz assume based on their actions in the crucial area in the ranking of all the analyzed cities. A high level of non-government organization the lowest values among the analyzed of safety: expenditure on law and order Lower expenses, however, do not translate activity contributes to the better operation cities. The number of non-governmental services, and the extent to which people trust into a low crime-detection rate or a lower of democratic mechanisms, increased scrutiny organizations registered in Bydgoszcz per these services. It is worth noting that citizens’ number of police officers and guards of authorities’ actions on the part of citizens, 1,000 inhabitants is 3.5, with the average assessments of authorities’ efforts in this area per capita. The latter two indicators are fostering of partnerships between the city’s value of 5 for all the analyzed cities. can be separate from their actual perception slightly higher than the average values inhabitants and its authorities, as well as the The value of the indicator defining the of security (taken into consideration in the for all the analyzed cities. increased involvement of citizens in working Quality of Life Capital) – in other words, out and implementing a city’s development presence and search engine optimization there are cities with a high crime-rate despite It is worth emphasizing that Bydgoszcz strategy. of non-governmental organizations the considerable efforts of the authorities, also has a relatively low crime-rate per from Bydgoszcz is also low. IDC in terms of non-government organization as well as cities where both expenditure capita – occupying in this area the third activity is measured by analysing Internet With the average level of 100 for the 11 on safety and crime-rates are low. position among the analyzed cities cities, the value of the above indicator (behind Białystok and Warsaw). sources to ascertain the number and level In measuring IDC in terms of public safety, of activity of non-government organizations for Bydgoszcz is at the level of 70.6, the following indicators were used: the city’s With the average level of 100 for the 11 registered in the city. which is the lowest value among expenditure on safety, the number of police cities, IDC in terms of expenses on safety the analyzed cities. and city guards (all per 1,000 inhabitants) in Bydgoszcz is at the level of 92.3. and the crime detection rate.

Reports on major Polish cities Bydgoszcz 29 Institutions Summary

Institutional and Democratic Institutions – Bydgoszcz Capital in Bydgoszcz

The score achieved by Bydgoszcz results from a fairly good value of the indicators Efficiency of the administration of administration effectiveness and public safety. 140 The value is lower largely because of the 120 lowest level of activity of non-governmental organizations among the analyzed cities. 100 80

60

40

With the average level of 100 for the 11 cities, Bydgoszcz’s 20 min. in 11 cities Institutional and Democratic Capital is 88.3. 0 city max. in 11 cities

Security NGO activity

30 Bydgoszcz Reports on major Polish cities Infrastructure

Why do we measure Technical For these reasons, we regard Technical Measuring Technical and Infrastructural Capital? and Infrastructural Capital as warranting and Infrastructural Capital (TIC) special attention. Effective infrastructure – including efficient The city’s Technical and Infrastructural Capital transport, housing resources, services It is important to remember that to have has a strong impact on the city’s attractiveness infrastructure, media and utilities (both more effective infrastructure in place requires not as a place to live and do business. The TIC traditional such as power and water, only the presence of concrete resources such assessment is usually based on the experiences and modern such as telecommunication as transport systems, buildings, equipment and and observations of the city’s inhabitants and the Internet) is a prerequisite for creating installations, but also a level of organizational and visitors. Negative opinions that gain an efficiently functioning metropolis where efficiency in management and administration traction can destroy a city’s image, even it does people can live and do business. The advantages that allows these to be fully utilized. well in other areas. that flow from well-developed Technical The actual Technical and Infrastructural Capital and Infrastructural Capital directly influence level often depends also on the efficient the other Capitals, in particular Quality of Life, operation of the markets for services, media Human and Social, and Investment and utilities and housing. Renting or buying Attractiveness. Without sufficient, or sufficiently appropriate housing is as difficult as in a city developed, Technical and Infrastructural with no housing resources available as it is In our opinion, there are four kinds of infrastructure crucial Capital, progress in the other areas will be in a city with extensive housing resources for successful development: transport infrastructure, energy considerably slower than in cities with well but an inefficient market . developed infrastructure, and people’s quality and IT infrastructure, housing infrastructure, and trade of life deteriorates, the city’s image worsens, and services infrastructure. and its attractiveness as a place for locating investments diminishes.

Reports on major Polish cities Bydgoszcz 31 Infrastructure

TIC: transport The development of transport infrastructure A general assessment of the efficiency of the in Bydgoszcz measured by the number of seats transport network in the city needs several in public transport per capita and the number of roads factors to be taken into consideration: road and bicycle lanes per square km is below the average infrastructure, alternative forms of transport, for the analyzed cities; in terms of these indicators, the quality of public transport and the quality however, Bydgoszcz stands out from smaller cities. of the city’s connections to the outside world. Compared to other cities with access to an airport, The indicators used to measure TIC the number of direct flights from Bydgoszcz is the for transport are: density of the road network, lowest. It is worth emphasizing, however, that the number of bicycle lanes, number of public very existence of an operating international airport transport seats in relation to the population, in Bydgoszcz influences the city’s development as well as the number and quality of the city’s potential and increases its transport accessibility as connections to the outside world: the number compared to smaller cities from the analyzed group of direct flights (airports within a 100 km (Białystok, Lublin). In terms of an access to the radius), time taken (by train) to reach the five European network of highways and accessibility largest Polish cities (a new indicator in this by railway, Bydgoszcz is slightly below the average edition of the survey), access to the European for the analyzed cities. motorway network (a new indicator in this With the average level of 100 for the 11 cities, edition of the survey). In combination, these the value of TIC in terms of transport for Bydgoszcz indicators give us a general idea of the quality is at the level of and development of the city’s transport 72.1. infrastructure.

32 Bydgoszcz Reports on major Polish cities The availability of low-priced apartments or houses in the city depends both on the number and quality of housing resources in the city and on the efficiency of the real estate market.

Infrastructure

TIC: apartments With regard to a synthetic indicator of housing The availability of low-priced apartments resources, Bydgoszcz is at a lower level in the list of all or houses in the city depends both the analyzed cities. The city has the lowest number on the number and quality of housing resources of apartments per 1,000 inhabitants (387, against the in the city and on the efficiency of the real average of 413), even though it must be admitted that estate market. A more efficient market the values of this indicator do not vary greatly among will facilitate the attraction and retention the cities. An increase in the number of apartments of highly-qualified workers in the city, in the years 2004-2008 was, however, one of the and draw new investors to the city. lowest in the analyzed group (2.1% as compared The primary indicators used to measure TIC to the average of 5.1%). Despite the above, prices in terms of housing are: number of housing of apartments on the secondary market in Bydgoszcz units per 1,000 inhabitants, quality of the are the second lowest, behind Katowice, among housing resources (measured as percentage the analyzed cities. of units with bathrooms), the growth rate With the average level of 100 for the 11 cities, of housing resources and average rents the value of TIC in terms of housing resources on the secondary market. for Bydgoszcz is at the level of 90.6.

Reports on major Polish cities Bydgoszcz 33 Infrastructure

TIC: media and utilities TIC: trade and services Bydgoszcz has the lowest number With regard to trade and services, Without efficiently and reliably supplied media of Internet users per capita and this is a Market services, especially trade, financial, indicators describing the situation and utilities, it is difficult for a city to establish situation which undoubtedly requires hotel and catering services, create the market in Bydgoszcz stay at a relatively low level an image as a good place to live, and above all, to be changed considerably. On the other infrastructure necessary for ensuring compared to the average. This applies a good place to do business. This is true both hand, Bydgoszcz, along with Kraków and a well functioning economy. These services to the area of shopping space per capita for the traditional utilities (power, gas, water) Katowice, belongs to the cities which can are usually highly correlated: cities which and the number of shops, hotels as well as modern media mechanisms boast of the greatest percentage of space offer e.g. large, modern shopping spaces also and restaurants per 1,000 inhabitants. (telecommunication, internet), which afford with free access to wireless Internet. typically offer other services of high quality. The number of ATMs per one inhabitant innovative growth opportunities and make When measuring TIC for trades and services, is at an average level in the group of the it possible for citizens to make full use of their Power consumption per capita we used the following indicators: area analyzed cities. knowledge and skills. is considerably lower than the average level for the analyzed cities. The percentage of of modern shopping space, number of ATMs, With the average level of 100 for the 11 The following indicators were used to measure people using the water supply and sewage and number of shops, hotels and restaurants cities, IDC in terms of trade and services TIC in this respect: the percentage of people networks in Bydgoszcz is slightly lower per 1,000 inhabitants. in Bydgoszcz is at the level of 86.4. using the water supply and sewage networks, than the average in the group of the power consumption by households (which analyzed cities. is associated with the number of durable goods in a household), the estimated number With the average level of 100 for the 11 of Internet users (per 1,000 inhabitants), cities, the value of TIC in terms of media and the percentage of the city area covered and utilities for Bydgoszcz is by free access to wireless Internet (the last two 106.3. indicators are new in this edition of the survey).

34 Bydgoszcz Reports on major Polish cities Infrastructure Summary

Bydgoszcz’s Technical Talking about Bydgoszcz, it is worth noticing Infrastructure – Bydgoszcz and Infrastructural Capital the BiT City project – an integrated transport system in Kujawsko-Pomorskie voivodeship Development of transport infrastructure (Bydgoszcz, Toruń, Solec Kujawski). It is Transport a comprehensive project estimated at PLN 800 requires decisive actions. In the area of trade 160 million (including EUR 100 million from the and services, as well as housing resources, 140 Infrastructure and Environment Operational Bydgoszcz is at a distance away from the 120 remaining analyzed cities. The situation Program), which is to be completed by 2014. 100 is different with regard to media and utilities, The project will cover reconstruction 80 where the relevant indicator for Bydgoszcz and modernization of the transport system, 60 assumes the value above the average – mainly purchase of rolling stock (fast railway) and because of the scope of free wireless Internet. tramway cars, construction of an overbridge 40 in Solec Kujawski and development of a ticket Retailing and services 20 Housing selling system common for the three cities. 0

With the average level of 100 for the 11 cities, Bydgoszcz’s Technical and Infrastructural Capital equals 88.9. min. in 11 cities city max. in 11 cities

Utilities

Reports on major Polish cities Bydgoszcz 35 Finances

Why do we measure Sources While investment is a desirable goal, it’s also Cities with high SFC value are those that Measurement of the Sources of Finance Capital? a particularly difficult one to achieve nowadays. are able to source the necessary amounts of Finance Capital (SFC). Admittedly, we do have access to considerable of funding, drawing on various sources, so as Sources of Finance Capital refers to the ability financial resources from the European Union to achieve the best results with as low funding SFC should be understood as the ability of a city to access the funds necessary budget. However, to be able to take full acquisition costs as possible. In an environment of cities to finance projects essential to their for financing its own development. Such funds advantage of these, we need to find considerable as complex as the current one, Sources of Finance growth. Well developed SFC shows that a city can come from various sources: tax revenues, funding of our own for co-financing. Taking Capital becomes particularly important; is able to acquire sufficient funds for such government subsidies, EU funding, revenues a long-term view, city development requires maintaining it at a high level is decidedly purposes, from diverse sources. from issuing securities or contracting loans. us to urgently modernise infrastructure more challenging than during the boom times. The following four aspects are analysed for They may also include private sector funds that and improve public services, despite the current That is why in this edition of the reports the SFC assessment: tax base (the city’s GDP), are used for financing undertakings necessary economic downturn. At the same time, however, we decided to focus on this Capital, and pay budget financing, funds from the financial for the city’s development. increased risk aversion among financial more attention to the methods of finance market (loans), and EU funds. We would like To develop successfully, present-day cities need institutions has caused them to view large acquisition that are less onerous to the local to emphasize that, in the long term, Polish cities to make investments that deliver efficient investment projects with a new caution government budget. should aim at engaging more private sector infrastructure, desired quality of life, and distrust. Such a complex economic situation funds, mainly in the form of public-private and effective operation of public institutions. makes acquiring the necessary funding for city partnerships. A good development strategy is not enough investment difficult. Costs are also increasing, – sufficient funding is required to achieve as a result of the imposition of higher margins the goals. This second edition of the “Reports by financing institutions, as well requirements on major Polish cities” is being published for additional guarantees. A limited budget at a time when the world economy is still and continuously rising costs will mean that in crisis, and as Poland is struggling with an there simply might not be sufficient funds economic slow-down resulting in decreased for some investments. budget revenue.

36 Bydgoszcz Reports on major Polish cities Finances

SFC: revenue base SFC: budget financing In 2008 (most recent data available In 2009, the total city revenue The principal revenue base of a city consists from the Central Office of Statistics), Budget financing comprises the funds that in Bydgoszcz amounted to PLN 1.1 billion, of the income obtained by its residents. Local Bydgoszcz’s GDP per capita amounted a city has in its own budget (the sum of its own with the average for the 11 cities equal taxes may be levied on such income in varying to 124% of the average GDP per capita funds, and the subsidies and funding received to PLN 2.6 billion (significantly inflated degrees, depending on the policies adopted. of Poland, which places Bydgoszcz at the by the city from the central budget). The main by the revenue of Warsaw). Both the total In general, the higher the economic activity bottom of the list, however, still before benefit of financing development from the revenue and own revenue calculated of the city, the higher the current and future Łódź, Białystok and Lublin. budget is that it does not involve any increase per capita were below the average level. revenue of the city’s budget, which allows in the city’s debt. There are, however, also It places Bydgoszcz, together with Lublin With the average level of 100 for the 11 for financing various investment projects. certain drawbacks resulting from such financing. and Szczecin, significantly below cities, the value of SFC in terms of revenue Budget funds are always limited to some SFC assessment in terms of the revenue base the average for the 11 cities. The share base for Bydgoszcz is extent. Moreover, in the long run, providing is done based on GDP per capita. 79.3. of capital expenditures in the total city extensive funding from the city’s own budget spending amounted to 12.5%, which is the can only be done through applying high local lowest value in the whole group of cities. charges and taxes. This in turn may negatively influence the economic climate of the city. With the average level of 100 for the 11 cities, the value of SFC in terms of budget The SFC for budget financing comprises financing for Bydgoszcz is the total revenue of the city’s budget (including 69.5. subsidies from the central budget), its own revenue (in both cases per capita) and the share of capital expenditures in the city’s budget.

Reports on major Polish cities Bydgoszcz 37 Financing development with funds from the financial market is beneficial, as it provides the opportunity for investments that could not be covered from budget funds to be carried out.

Finances

SFC: market financing High debt levels are negative if the funds acquired through loans are for current Total debt of Bydgoszcz is one of Funds originating from the financial market expenditure or investment projects with no the highest in the group of the cities may be acquired by contracting loans from economic justification. Using loans to finance analysed (only Wrocław and Kraków banks or issuing municipal bonds. Financing projects that help economic development may noted higher indices) – in 2009 development with funds from the financial be correct in the long-term; however, in the it amounted to 52%. Rating awarded market is beneficial, as it provides the initial analysis phase, cities should consider to the city by Fitch agency is at BBB opportunity for investments that could not be all the forms of financing available. level (which means full ability to pay covered from budget funds to be carried out. the instalments and interest, with The negative to this is increasing city debt. SFC measurement in terms of market financing potential problems in the case However, when analysing Polish city debt includes: the city’s debt to revenue ratio of economic downturn). levels, it should be noted that debt for 2009, i.e. the latest audited data available and investment are usually correlated. (pursuant to the Public Finance Law, With the average level of 100 for the This means that low debt levels may reflect the proportion should not be higher than 60%) 11 cities, the value of SFC in terms a low level of investment. and the city’s credit rating. of market financing for Bydgoszcz is 66.4. Low value of this index results mainly from high debt of the city.

38 Bydgoszcz Reports on major Polish cities Cities can use development funds as structural resources thanks to Poland’s membership of the European Union.

Finances

SFC: EU funds The SFC related to EU funds is based on the total amount of money from EU funds used In terms of EU funds, relevant index Cities can use development funds as structural for co-financing current and planned projects for Bydgoszcz definitely exceeds the resources thanks to Poland’s membership of (in the budgets of 2007-2013, on the basis average value for the cities analysed. the European Union. These are non-refundable of data from the Ministry of Regional grants covering the major part of project costs With the average level of 100 for the Development, correct as of June 2010, serving the goals of regional development 11 cities, the value of SFC in terms including projects for which contracts have and quality of life improvement. Access to such of EU funds for Bydgoszcz is 145.4. been signed with the Municipal Offices and funds is very beneficial for the city (although It is the second highest index (after municipal companies), on a per capita basis. finding the city’s own share for co-financing Szczecin) among all the cities. may pose a problem). Acquisition of EU funds is, however, a fairly complex process and the procedures related to correct use of such funds tend to be burdensome.

Reports on major Polish cities Bydgoszcz 39 Finances

SFC: public-private financing A significant increase in the interest shown by private entities in projects in the form of PPP Public-private funds are those that the city At the same time, we would like to emphasise or concessions has also been noticeable in the gains through contracts with private investors last two years. Regrettably, in only a few cases the importance of the future development potential with, as a result, projects important for the city’s was the public contract award procedure of Polish cities and in the appropriate parts of the reports development being financed by the private and selection of the private partner successful sector. The use of public-private financing we indicate how individual cities are approaching (e.g. construction of underground car park should be treated as the reflection of skilfulness in Wrocław and Kraków, construction of indoor forms of infrastructure project financing that are still of a city in acquiring funds for development. swimming pool in Oława, development of the fairly new to our market. When preparing our reports four years ago, lakefront in Chełm). The majority of tender we hoped that this index would be included procedures are cancelled due to lack of interest in the SFC assessment in this next edition. among private partners. This lack of interest However, despite high hopes and the potential results from poor project preparation of PPP development in Poland, public and a tendency of the public sector to transfer procurement where a private partner is selected most of the risk to the private partners. on the basis of principles set out in the In practice, it is hard to talk about the PPP Public-Private Partnership Act is still not carried projects that are already underway, out in numbers sufficient for making such and we decided not to include public-private an assessment. A high number of tender financing in the SFC assessment. announcements for private partner selection (PPP or concessions) published recently (on average 40 announcements per year were published in 2009-2010) constitute proof that this form of project execution is more often being considered.

40 Bydgoszcz Reports on major Polish cities Finances Summary

Bydgoszcz’s Sources of Finance For a long-term strategy, the city should Finances – Bydgoszcz Capital continue to improve its revenue base and consistently exploit opportunities connected Total value of the SFC for Bydgoszcz indicates with European subsidies. At the same time, GDP the necessity to undertake actions in order change of the expenses structure which would 200 to improve the city’s financial standing. allow to increase the capital expenditures Bydgoszcz has a relatively small revenue base, seems to be of significant importance. 150 which results from low GDP per capita. Authorities in the region consider privatisation The extensive debt combined with the low of several hundred kilometres of roads and 100 level of capital expenditures in overall budget modernisation of main transport routes in the expenses is also alarming. The overall image Province with participation of private investors. connected with the financing capital seems 50 to be better only due to the availability European Union Budget of European funds and its efficient use by the municipal authorities. 0

min. in 11 cities With the average level of 100 for the 11 cities, the value of SFC city for Bydgoszcz is 90.2. max. in 11 cities

Financing

Reports on major Polish cities Bydgoszcz 41 Investment Attractiveness Capital is essential for the city’s future development.

Investments

Why do we measure Investment Very often investors do not act rationally. Measuring Investment Attractiveness Capital? They tend to make new investments where Attractiveness Capital they have invested in the past, even if the Investment Attractiveness Capital reflects conditions offered by other cities may be better. Investment Attractiveness Capital has a strong a given city’s attractiveness as a location Subjective and secondary factors may also influence on a city’s development opportunities. for business activity, and thus its capacity influence decisions about where to launch As evaluation of investment attractiveness to attract investors. Perception is crucial; this investment: the city’s accessibility for travelling is not always entirely rational, cities can only capital is not always directly connected with businessmen, the goodwill of local patiently strive to promote a positive image. the city’s actual strengths and weaknesses. administrative bodies and the first impressions Awareness of the business potential of a city, Cities providing very good investment from the visit. A city that is not perceived and identifying the sectors that the city conditions sometimes are regularly ignored as a good investment location should strive is best suited to meeting the needs of, by investors, while other cities actually to change this by any means possible. are pre-conditions. Therefore, drawing up offering worse conditions are popular. Investment Attractiveness Capital is essential a clear and transparent planning policy for future development. and strategies for its effective implementation is critically important.

Investment Attractiveness Capital is measured above all by analysing a given city’s success in attracting investors, both foreign and domestic. We also take into account investment conditions, that is those factors that may enhance the image of the city as a good business location.

42 Bydgoszcz Reports on major Polish cities Investments

IAC: attractiveness to foreign investors Ratios for Bydgoszcz remain on the To evaluate a city’s level of perceived incomparably lower level investment attractiveness to foreign companies, in comparison to larger metropolitan we analysed the level of existing investment areas. When compared to the smaller and data concerning the availability of skilled cities, however, the ratios are similar. employees. The number of foreign investors The indicators used to measure IAC active in the city per capita is one for attractiveness to foreign investors include: of the lowest (just after Białystok number of foreign companies that have and Lublin) in the group of the cities invested in the city in the last three years, examined. Bydgoszcz’s attractiveness and the number of graduates from technical for foreign investors could be and scientific universities located in the city improved by increasing the number or in its vicinity (distance of up to 50 km) of graduates from technical who completed their education in the last or scientific faculties. three years. With the average level of 100 for the 11 cities, the value of IAC in terms of attractiveness for foreign investors for Bydgoszcz is 55.8.

Reports on major Polish cities Bydgoszcz 43 Investments

IAC: attractiveness for domestic The basic indicators used to measure IAC investors for domestic investors in this respect are: Bydgoszcz’s investment attractiveness from the the total value of the companies’ capital domestic investor’s point of view, as for the analyzed Domestic companies are usually more aware expenditures per capita (demonstrating their ratios is relatively good in comparison to the majority than foreign companies of the strengths investment in a given location), relationship of the cities examined – a syntactic ratio places and weaknesses of given cities as investment between capital expenditures and fixed assets slightly above the average level. locations, and their decision-making can (indicating growth of or reduction in business therefore be more rational. This is true Capital expenditures per capita are one of the highest engagement in a given location), number particularly for large domestic companies, in the group of smaller cities. Moreover, there is also of innovative companies operating in the city which very often have significant freedom a high relationship between capital expenditures (as per the INE PAN, BRE Bank and Gazeta in choosing the most suitable investment and fixed assets (significantly above the average) Prawna ranking) and wage levels (as relatively location for the long term. and a large number of companies from Bydgoszcz low wage levels should attract investors). included in the innovation rankings per capita.

This ensures advantageous conditions for investing, along with relatively low wage level as well.

With the average level of 100 for the 11 cities, the value of IAC in terms of attractiveness for domestic companies for Bydgoszcz is 103.7

44 Bydgoszcz Reports on major Polish cities Investments

IAC: investment conditions Considering investment conditions, value of the When considering, for instance, the level examined ratios places Bydgoszcz on the last position of human capital or infrastructure in a city, among the cities analyzed. Only 19% of the city’s area subjective assessments of its suitability is covered by spatial development plans, compared for investment and business activity may to the average value for the 11 analyzed cities hold more sway than its actual advantages. established at 31%. Availability of high-standard This analysis takes into account factors that hotels, as well as the number of international may encourage or discourage companies, and language schools is lower than the average level especially foreign ones, from investing. for the cities analyzed. It should be emphasized, The indicators used to measure IAC however, that in the group of smaller cities, aside from for investment conditions include: Szczecin, only Bydgoszcz has international schools. the percentage of a city’s area covered by spatial With the average level of 100 for the 11 cities, development plans, the number of language the value of IAC in terms of investment conditions and international schools, and the number for Bydgoszcz is of beds in 4- or 5-star hotels (compared 57.8. to the city’s population).

Reports on major Polish cities Bydgoszcz 45 Investments Summary

Bydgoszcz’s Investment Although the investors may be encouraged Investments – Bydgoszcz Attractiveness Capital by relatively low labour costs, promotional campaign which would emphasize actual Total value of Bydgoszcz’s Investment investment advantages of the city is above all Attractiveness Capital based on the analyzed needed. The authorities should support ratios is one of the lowest (next to Bialystok) development of services determining the way Foreign investors in the group of the examined cities. in which the city is perceived by investors, and 250 There are areas calling for immediate actions, should improve transport routes with other 200 in particular in terms of investing conditions parts of Poland and foreign countries. It is also and attractiveness for foreign investors. necessary to support and use the potential 150 of domestic companies operating in Bydgoszcz – in particular those providing the most 100 innovative solutions. 50

0 min. in 11 cities With the average level of 100 for the 11 cities, the value of IAC city max. in 11 cities for Bydgoszcz is 68.3.

Investment conditions Domestic firms

46 Bydgoszcz Reports on major Polish cities Contact Details

ADrafted by: Team for Public Sector Services

Witold Orłowski Michał Mastalerz Sebastian Gościniarek Chief Economic Advisor Partner Vice-director +48 22 523 4394 +48 12 433 3510 +48 22 523 4664 [email protected] [email protected] [email protected]

Marzena Rytel Adam Żołnowski Director Director +48 22 523 4685 +48 22 523 4282 [email protected] [email protected]

Pawel Szaciłło Paweł Ożarowski Vice-director Partner +48 22 523 4667 +48 58 552 9017 [email protected] [email protected]

Reports on major Polish cities Bydgoszcz 47 Offices in Poland

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