Krakow's mini-boom in IT attracts Polish and foreign techies

Some 70 multinational firms have opened, employing 20,000 skilled workers – Poles and foreigners alike – in Krakow, which some call a small Silicon Valley of Central Europe.

By Robert Marquand, Staff writer / November 2, 2012

KRAKOW, POLAND

One of the clearest illustrations of “brain gain” in Poland comes from the southern city of Krakow which is experiencing a mini-boom in information technology – at a time when much of Europe’s tech scene is in a windless ocean.

The global reverse migration – turning brain drain to brain gain in many countries – is obvious here: Some 70 IT and multinational firms have opened, employing 20,000 skilled workers – Poles and foreigners alike.Cisco opened in May, and its 90-person staff will soon climb to 500. Google moved an R&D office here. State Street, Capgemeni and Lufthansa, Shell, Brown Brothers, and Philip Morris, to name a few, are all present.

The hopeful call Krakow a small Silicon Valley of Central Europe. And the buzz here is a magnet for brain gain: It’s a small oasis of Polish bohemia with 14 colleges and universities, and a bar-arts-and-film scene, and – not destroyed like Warsaw in World War II – it retains its Austro-Hungarian architectural charm.

In reporting for The Christian Science Monitor’s “brain gain” project, I met a cluster of young and bright reverse migrants here in a translucent glass-and-steel tech-park. Recent-hires at the British firm Element14, an online interface provider for electronic parts sales, they are part of the vanguard of Poland’s brain gain. Their profiles tell as much about this city’s bright future as the vibrant draw it is at the moment.

Jaroslaw Grabon, a software engineer, was born in Poland, but his family moved to Germany. Now, in an admittedly “wrenching” decision, he’s come back to Krakow, leaving a flat and friends in Munich. He says he got a call from a Krakow headhunter for Shell, and decided, out of curiosity and interest in the country, to move back.

“I felt better in Poland than Germany in ways I can’t easily explain, but it was a big decision. I left the whole family. I sent out 120 CVs and got 80 positive replies.Gdansk was a possibility but I decided on Shell. Then moved here [to Element14].”

Alessandro Lombardi couldn’t get work in his native Italy – but, here, he’s wired-in.

Tomasz Wasilewski worked in Warsaw for a Silicon Valley firm that employed many people like him, offspring of émigré Poles who went abroad earlier. But he was sold on Krakow and moved here, partly because of the Krakow buzz and partly for the experience.

A young Finnish woman, Marianne Kuukkanen, arrived this year and says that the city’s multicultural environment requires looking “more closely at oneself, and I think this has made me more efficient and aware at my job and with others.”

They report that the multicultural work environment, the new business models being employed, and the need to stay current in tech developments pipe a new and different mentality into Krakow.

“Everyone who is here can move somewhere else if they want, to any other site. We are not bound by nationality. Poles who return have a much bigger influence than elsewhere and they know this. It is a factor in their choice. Because it is a smaller setting,” says Wojciech Burkot, of his hometown, Krakow. He, himself, is a part of the Krakow buzz as head of Google’s R&D unit here, a reverse IT migrant who came home after years abroad to wrestling with increasing Google’s search engine speed.

The Krakow setting is key to drawing “people smarter than us that [keep] the company growing … and improving, says Mr. Burkot.

 “It’s all city, city, city,” says Ramon Tancinco, head of strategy and business development in central Europe for Cisco. He spent two years on a team deciding where to locate the office, and landed on Krakow. “We look at regions not countries, and Krakow is at an East-West corridor and in a stable EU country. When you bake in the student population, that’s very strong.”

Indeed, the area is low income and high education – some 400,000 students live in the corridor between Krakow and Wroclaw – giving it a dense population base that overseas firms call “sustainable advantage.” And the city’s old square with its 11th and 14th century churches and charms and endless cafes are not lost on firms. For example, Kazimierz, the old Jewish quarter made famous in the film Schindler’s List, is rid of its postwar thuggish character and is a cultural center.

The city’s international draw, too, is key, says Elaine Barnes, a senior manager at Element14. “We need 23 languages in one city. English is the business language, German is No. 2. We looked at Hungary and Finland, Sweden, and Poland. The Czech Republic. We couldn’t find the breadth of language anywhere else [but Krakow].”

The ferment of brain gain among European youth and IT wonks and mavens may be in the air. Yet – like visiting any school classroom to “see” education – it is often difficult to instantly quantify something as amorphous as “brain gain” taking place.

Google’s Burkot suggests that brain gain is “incremental in Poland.”

His colleague Tancinco thinks he sees it, though. “The empirical evidence of gain in Krakow is that when I came here four years ago there was one venture capitalist. Now there are six or seven. That is a barometer. Venture capitalists need to see a talent pool of emerging firms with good ideas or they won’t come. You need to see an incubation, a pool of start ups to be the next ‘whatever.’ ”

And, another plus for Krakow’s continued boom is that hasn’t recorded the corporate horror stories heard nearby out of Ukraine or Russia. There is less mafia and corruption. “Go east of here and it is a wilder ride,” says one analyst.

“There is no support for gangsters here, I’ve never been shaken down or been told to give a bribe,” says Richard Lucas, a British citizen who owns 11 companies in Krakow and has been here 21 years.

One bit of learning gained by Mr. Wasilewski, who moved from Warsaw (Poles may seek work overseas but are often reticent to move internally) to Krakow, is about practice. He assumed there was a set of general rules applicable everywhere in the industry he works. But he found out differently.

The US firm he worked for in Warsaw stressed getting jobs done simply. “They wanted us not to make work complicated by adding structure, but to be efficient and nice to the customer. The focus on being direct and pleasant was a big thing to learn,” he says. “That was new."

“But they have a different way of resolving client problems than the European firm I work with now. The Americans wanted me to be a buffer, to dissolve problems. But this European firm wants client problems reported directly to the front line. They say, ‘put us in direct touch, don’t filter.’”

Tancinco from Cisco suggests that Krakow’s advantages are growing geometrically as hires from abroad accumulate here. The bulk of new hires “spent time overseas,” he says, and they add breadth to local know-how and an intangible element that allows them to be effective in a multinational company.

“With a broader perspective, you learn to work around problems, not to take ‘no,’ or to treat petty issues as final … [whereas] working around problems is more difficult if you don’t have a broader view.”

He adds a caveat: “What I haven’t yet seen are professors starting companies. At MIT, everyone has a side business. In Poland, it is still either-or, business or classroom. Silicon Valley is all about ‘And.’"

“But this may change. We’ll see.”

This is a repost of an article that appeared on The Christian Science Monitor on November 2, 2012