IT and outsourcing have generated more than 10,000 well-paid jobs in Iasi
Iasi has become one of the most sought Tier-2 cities in Romania for IT and outsourcing, while European projects worth 133 million Euro have helped the city increase its competitiveness. Alexandra Cioboata talks to Mihai Chirica, the newly-appointed mayor of Iasi, to take the pulse of the city
Besides being a core of multiculturalism, history and tradition, Iasi has been recently highlighted as the most important growth pole in north-eastern Romania, which continues to grow and attract new investments every year. Fiscal policies, pro-business taxation, skilled labour force and its competitive cost have represented the main advantages of the economic environment. However, one of the most important industries that have grown fulminatory in the recent years is the field of ICT, including outsourcing, the biggest players in the global software like Amazon, Oracle, Xerox, Continental, SCC, Pentalog and Centric being present in Iasi. Moreover, the 800 companies active in this area generate, besides substantial contributions to local budgets, more than 10,000 well-paid jobs, according to Mihai Chirica, newly-appointed mayor of Iasi.
"The ICT industry is the mainstay of the local economy," says Chirica. "The human capital, very important in the success of a city, has grown sharply in recent years: attractive jobs have appeared for both recent graduates and qualified personnel in various fields. Iasi's academic system, especially the technical one, has modernized its curriculum, offering specializations demanded on the labour market. The IT and outsourcing area has generated over 10,000 well-paid jobs and things will not stop here. Signals from the companies show that they are ready to increase the number of IT jobs through retraining of university graduates without regard to their technical areas. In addition, Iasi becomes attractive for the outsourcing industry and we hope, in the coming years, that our city will become the second destination of this industry after Bucharest."
Apart from the ICT industry, the local economy is concentrated in industries such as services, education, healthcare, pharma, textile, automotive, metallurgy, heavy machinery and construction. In Iasi, regional clusters have been established to tap the potential of innovative industries specialized in ICT, medicine, new media and construction. These economic sectors will continue to grow in the coming years, says Chirica, if Romania will be well-governed and will maintain its 2013-2015 growth rates.
In addition, the mayor of Iasi confesses that he wants to increase the attractiveness of the city for investments through a series of domestic policies to support the economic environment. Thus, the City Hall wants to develop the support infrastructure for business by building an industrial park on the platform of Fortus SA., creating a centre of innovation and technology transfer, developing a technology park, "Iasi Intelligence City", with spaces for the activities of IT and outsourcing companies, including labour housing for employees, business hubs, conference centres, halls for contemporary art and artistic activities and an area for recreation and sport.
"There is a significant challenge in terms of Romanian IT growth: investors can leave as fast as they come," says the mayor. "It is our mission as a public administration to create a favourable economic climate to maintain foreign investments and growth of the local software market. This comes in addition to some local elements that contribute to attracting ICT investments, including the existence of competitive universities at global level, of a ‘reservoir' of technical talent pool represented by young people from the North East region, studying in Iasi, of office space, a modernized transport infrastructure and the existence of a social and cultural life of the city. (...) Iasi needs, without doubt, both government support and solid investments in key development areas of the city and I strongly believe in the potential of Iasi in attracting, with the support of our partners in the country and abroad, sustainable investments, with impact for increasing the prosperity of our city."
Massive infrastructure investment with EU funds. Projects worth 133 million Euro
The infrastructure of Iasi was renovated extensively in recent years, in an effort to attract and manage the EU funds from the 2007-2013 financial period. The large-scale projects, completed at the end of 2015 under POR (Regional Operational Programme), worth nearly 600 million RON (133 million Euro), were aimed primarily at investments in infrastructure: the modernization of tram lines, the rehabilitation of the south functional road artery, the road networks in the historic and cultural areas of the city, the development of the municipality's west transport axis, over ground and underground passages.
Moreover, the city has managed to successfully complete a project of urban regeneration in the historical centre, to rehabilitate heritage buildings, schools and retirement homes. Furthermore, it has invested in the energy efficiency of buildings, along with investment projects in tourism and leisure infrastructure. According to the mayor, Iasi has, with EU support, an infrastructure designed for scientific and technological parks. The Regional Technology Centre, a project developed by the City Hall of Iasi, is hosting a production site of Continental that has high contributions in the automotive sector, such as autonomous intelligent machines, automatic braking systems and electric cars. These aspects have led to the creation of new jobs due to a smart strategy that included several players from the public administration, multinational companies, human capital in Iasi and European funding, says Chirica.
"The European funds have been a chance for our community, for development, for the increase of both competitiveness of the city and quality of life," says the mayor. "In terms of business, the City Hall acted, under my leadership, as an open partner to it, being aware that the support of the local administration is crucial to attracting and retaining investments. The City Hall will continue to fulfil its mission as a catalyst for development by carrying out projects with European financing. We will continue investments in the cultural heritage, schools, hospitals, tourism, sports and leisure infrastructure and environmentally friendly transport systems."
Iasi opens the first municipal centre for waste collection
Another domain where Iasi stands in the frontline is the environment. This spring, Iasi opened the first municipal centre for waste collection, a first for Romania, where citizens can bring paper, cardboard, glass, metal, construction waste, electrical and electronic equipment, batteries and accumulators in order to be further recovered. The centre, co-financed by the Government of Norway within the ‘Green Industry Innovation Programme for Romania', was developed by Ecotic, one of the most important transfer-or-responsibility organizations for WEEE, in partnership with the Iasi's City Hall and Salubris SA. The Iasi Municipal Collection Centre (CMCI) officially opened its doors in March and will actively contribute to the national flow of waste collection.
"Locally, we have started a series of environmental projects of great impact for the green future of our city, whether talking about promoting electric transport and massive investments in the modernization of the tram transport network, the construction of modern roads modern or redirecting heavy traffic outside the city," says Chirica. "Moreover, in spring 2016, Iasi opened the first municipal centre for waste collection, a first for Romania. From now on, people from Iasi can bring to the centre their household waste. All will find their way to an optimal flow of recycling and reuse. My belief is that, in order to be successful, any investment in environmental infrastructure must be accompanied by an educational effort focused on young people."
Plans for Iasi: more visibility
The municipality of Iasi is trying to ensure a predictable and attractive local fiscal framework for the business environment, considering that, compared to other cities in Romania, Iasi currently has the lowest taxes in both homes and buildings introduced into the economic cycle, most of these tax obligations falling to the mandatory minimum limit, according to Chirica. In the next period, the mayor of Iasi says that he will continue to promote the maintaining of a low level of taxation for entrepreneurs and the provision of tax incentives for some investments. "After consultations with the interested parts and the Competition Council, I will propose to the Local Council a series of De Minimis and local state-aid schemes, aimed at young entrepreneurs. Of course, all the legal aspects will have to be clarified and local budget costs of these measures must be sustainable," he says.
In the following period, Chirica mentions that the City Hall of Iasi will concentrate its efforts more to promote the city abroad through Romania's external diplomatic network, foreign embassies accredited in Bucharest and its special relationship with its partner cities, for a greater visibility. "I want to work harder with my team in the promotion of the city," he says. "The world must know that we exist, that we are a modern, performant and vibrant community," he concludes. Mihai Chirica took office in 2012 as a deputy mayor, and, last year, following suspension from office of mayor Gheorghe Nichita under investigation by DNA, he took over as mayor. This June, he was elected mayor of Iasi.
Projects implemented through 2007-2013 POR
No. Project title Total project value (RON)
1 Modernization of tramways in the growth pole 61,719,095.46
2 Traffic Management system in Iasi 87,851,643.21
3 Iasi Regional Technology Center 18,280,915.92
4 Development and rehabilitation of South functional artery - Iasi Municipality 70,485,900.26
5 Urban regeneration Lapusneanu - Unirii Square area 12,094,274.21
6 Building consolidation and restoration in order to set Iasi Municipal Museum 12,592,385.26
7 Road network development in the cultural, historical and touristic area of Iasi 69,413,981.06
8 Supporting investments in energy efficiency of housing blocks in Iasi for families with an average income below 350 Euro/month 3,969,242.60
9 Upgrading the road link Intermodal Centre of Transport - Iasi Train Station 30,617,347.07
10 Partial demolition, consolidation, rehabilitation and refurbishment of Secondary School (Scoala Generala) no.12 Carol I-Building A 3,536,897.20
11 Expansion construction of building A, Grigore Moisil Computer Science High School, and works for demolition of Annex 2 warehouse of the High School 4,669,326.16
12 North-South development axis ′Octav Bancila′ Underpass 85,021,820.03
13 Developing East-West transport axis in Iasi 75,214,928.00
14 CIRIC recreational area 46,118,423.42
15 Rehabilitation, modernization and expansion of St. Cuvioasa Parascheva Retirees Home 10,919,226.60
*The absorption rate is not yet finalised