For more than a decade, Fujitsu has made Warrington its base of operations in North England. Fujitsu, the global information technology company based in Japan, has grown its presence in Warrington during the past decade.
“Ten years ago, when we made the decision to center on Warrington in the north, we looked at a number of factors and have been justified in our decision,” said David Sillitoe, director of group properties for Fujitsu in the UK.
Those factors include a solid work force, good business infrastructure and solid growth possibilities.
“Warrington is an important base for us,” Sillitoe said. “We have other main locations in the Thames Valley and Midlands, which we can access quickly from there.
“The cost of building in the North West is significantly lower, and when you compare Warrington with other locations there are no added city costs,” he added. “It is faster to get to an international airport, closer to Birmingham [60 miles away] and the infrastructure is better.”
During the next 18 months, the company will add jobs to its current work force of 350 in North England, bringing total employment to 500 at the site.
ICT Sector Bounces Back
Fujitsu’s growth is emblematic of the increased ICT (information and communication technology) growth across Europe.
According to the European Information Technology Observatory (EITO), the ICT sector is expected to grow by at least 4 percent in Europe in 2005.
The report asserts that growth is occurring across nearly all areas of ICT in Europe. Hardware, software and telecommunications are all experiencing good growth.
“Investment in DSL (digital subscriber line) and UMTS infrastructures, as well as in digital television, is driving growth in the communications sector,” said Bruno Lamborghini, president of EITO.
ICT companies are also looking beyond Western Europe for expansion or relocation sites. Of course, each European country has its own distinct strengths and advantages for technology companies.
“Increasingly over the past two to three years, the people we work with are exploring the possibility to offshore ICT into Central Europe and Western Russia,” said Elias Van Herwaarden, director, Deloitte Consulting, Fantus Location Group. “Countries in Central Europe have a unique skill base, and in general the work ethic is very strong among the work force.”
During the past few years, the big attraction of Central and Eastern European countries to growing ICT companies has been a lower labor costs. While that is still the case, increasingly there are other factors business leaders decide to expand into those regions.
“A country that is coming upstream is Bulgaria,” Van Herwaarden said. “It is of high interest because it used to be the computing center of [the former Soviet Union].”
According to Van Herwaarden, ICT companies are also looking to set up their support and back office operations closer to their customer base. That means they need to set up facilities to serve Central and Eastern European customers.
“We have definitely seen increased demand from the customer side to have a company response that is local and that understands the culture,” he said. “In countries like Romania, the language is not that difficult to penetrate, as the people in Romania have very strong language capabilities.”
The proximity of Central European locations to the rest of the continent also plays a role in attracting ICT companies.
“If you set up a back office in Central Europe — if you ever need to get to a meeting — you can fly to just about anywhere very quickly,” Van Herwaarden said. “You can go up and back within a day. Overall, it helps to make the case for Central Europe as an ICT location.”
ICT Stays Strong in Italy
Italy is one of the European companies experiencing a strong ICT resurgence. In the past three years, the number of ICT companies operating in Italy has grown from slightly more than 62,000 to more than 73,000.
Many foreign companies, including IBM, Vodafone and Transcom, have set up call centers in Italy. With more that 1,390 call centers and 72,000 workstations, Italy is one of the fastest growing countries for call centers in all of Europe.
To support the growing call center, software and engineering growth requires an educated and available work force. Italy is able to provide both.
Italian universities graduated more than 29,000 engineers in 2003, and 46,000 graduates in technology-related fields. Microsoft, Nokia, Motorola, Samsung, Alcatel and Marconi are just a few of the companies that have opened international research or design centers in Italy.
Italy is also popular because the cost of doing business there is less than some of the traditional European business centers. Real estate costs in Milan are far less than either London or Paris, and the cost of hiring and retaining engineering talent is also less than on many other areas of the continent.
In one German city, an interesting set-up offers expanding or relocating ICT companies a potentially lucrative site. The EXPO Park in Hanover, a city of about 500,000 people, is offering one year rent free of charge to qualified companies. Companies interested in the incentive must pass an admissions process.
Across eastern Germany, up to 35 percent of investment costs can be subsidized, with those that are less than 250 employees eligible for a greater incentive. The European Union has standardized many of the incentives, but applications for investment in Germany must still be submitted to the individual regional state organizations.
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