Lithuania no longer looks enviously across the Baltic at its well-to-do Nordic neighbours and its capital illustrates why. Self-confident, creative and well-educated, the city typifies how a small nation can realise big ambitions.
“It’s one of the fastest-growing economies in the EU but it’s a different city from the one I moved to,” says Belarus-born Andrei Maewski, who arrived in the Lithuanian capital to study seven years ago and decided to stick around to found human-resources technology business Globalhru. “If you walk around the streets you’ll see new design shops, coffee shops, bars and independent restaurants that weren’t here before.” You’ll also see the red-tiled roofs of Vilnius’s fairytale-baroque old town and the green tufts of parkland and forest that skirt the city of 535,000 inhabitants. A quarter of a century since the collapse of communism and the Eastern Bloc, the Lithuanian capital has quietly become a beacon for how to do business in the Baltics. It has also proved an irresistible magnet to many who, just like Maewski, have moved (or returned from abroad) to live here.
But it wasn’t always this way. In 2004, when Lithuania entered the EU, droves of workers emigrated to pursue their fortunes abroad. In the intervening years, however, and despite a rough ride through the financial crisis in 2008, there has been a remarkable turnaround. Government investment to the tune of €200m over the past decade has given the nation Europe’s fastest broadband, while successive mayors have been working to reduce bureaucracy and make it easier to hire talent from abroad. Even the time it takes to start a company has been slashed to just three days. What’s more, all that effort seems to be paying dividends. The Swiss-based imd business school’s World Competitiveness ranking saw Lithuania leap six places this year to 28th (a positive step for any country) and the World Bank’s Ease of Doing Business ranking puts the Baltic state at a presentable 24th. Statistics can lie but these figures are backed up by the many businesses who have moved here and made concrete investments.
“Eight years ago the first multinationals, including Barclays and Western Union, began moving their customer-service departments and IT services here,” says the city’s mayor Remigijus Simasius. “We have one of the youngest populations in Europe and 100,000 students in the city, most of whom are multilingual.”
The ambitious one-time justice minister and member of parliament only took office in April but things move fast in small countries: during monocle’s visit, news of a new technology park that will open in a former hospital building early next year is announced. The site will include 19 buildings and 900 desks for start-ups, accelerators and incubators set to grow the technology and gaming industries for years to come.
Google, Uber, Nasdaq and Russian firm Game Insight have already set up offices in Vilnius and their collective presence has convinced many promising graduates to stay on in the city.
Market-research firm Euromonitor moved here a decade ago after 12 years in London. “The decision was based on the availability of talent,” says Vilnius-born Marius Dundulis, the company’s director of analytics, modelling and innovation. “I was using freelancers here and management saw the results.”
What started as an office of eight has swelled to 200 staff from 20 countries, speaking countless languages. “In summer you’re only 15 minutes’ drive from the lake,” says Dundulis, who lives a 10-minute walk from his office. He counts the city’s proximity to nature and its high standard of living as reasons to stay on and work here.
It is an attitude shared by those working in the office of design agency New! Founded in 2009 and now an employer of 40 staff, the agency has struck a blow for the city’s mostly overlooked creative scene. “That’s the good thing about Vilnius,” says co-founder Tomas Ramanauskas, gesturing to the views from his office over the Neris River to the nearby woodland of Vingio Park. “The more I travel, the more I see it. The city is more manageable than elsewhere. In London you’re exhausted by the logistics of just getting around.”
Technology start-ups in Vilnius are also making the most of the swift internet and industrious workforce. Last year set a record, when the number of employees and capital raised by start-ups doubled. Both are expected to grow again in 2015.
One homegrown success story is Pixelmator, an image-editing app started in 2007 by brothers Saulius and Aidas Dailide. Now with a staff of 20, the company is held up as an example to other aspiring entrepreneurs. “In older European democracies there are established ways of doing business but things are changing rapidly,” says Darius Zickus, who returned to Lithuania in 2009 after 19 years in the UK and joined the team as a video editor four-and-a-half years ago.
Other internet start-ups include peer-to-peer fashion-trading website Vinted and TrackDuck, a service offering a simple way for clients to feedback website changes to designers. “There’s competition but we help each other,” says Edmundas Balcikonis, TrackDuck’s ceo and co-founder. “The community is small; everyone’s doing different things.”
Much of what Vilnius’s tech-savvy businesses are creating is invisible but their success breeds tangible confidence. There has been a cultural shift towards the local, the carefully made and the plain interesting. Dublin-born Anne Jennings-Tauciene opened her charming restaurant, Bistro 18, on Stikliu Street in the old town 19 years ago, having married a Lithuanian. “The idea of being yourself is growing,” she says. “The country’s come on leaps and bounds.”
Further examples of this transformation across the city abound. Over the past few years, inspired retailers such as those behind chocolate shop and fashion brand House of Naïve and coffee shop Crooked Nose have come to reflect the discerning consumers and growing disposable income of Vilnius’s workforce.
Growth has complemented this social shift and given rise to a burgeoning cultural scene. The rough-around-the-edges, post-industrial district of Naujamiestis is home to Loftas, a 1,000-capacity event space founded in 2010 by husband-and-wife team Victor and Zivile Diawara with just €3,000. The couple now host a diverse programme of 200 events a year within the one-time electro-technics factory, from music and club nights to film screenings and conferences. It’s a social cause at heart but a profitable one too, showing how far the post-Soviet nation’s arts scene has come. Like a number of people monocle meets, Lina Pliuraite studied abroad (in this case in Italy) before returning to Vilnius, where she started her clothing company LeMuse in 2010. Clipping across the wooden floor of her airy old-town shop, she wouldn’t want to be anywhere else but here among her tasteful Lithuanian-made womenswear. “Ten years ago Lithuania fell behind but now we’ve gone back to our roots and I’m really proud,” she says. “When I was younger I wanted to live in Italy but today I don’t know what could ever make me leave.”
Homegrown establishments are cheap but service can be slow and abrupt. Businesses such as Ukrainian-born bar Sweet & Sour have found a willing clientele in Vilnius; as disposable income grows there are gaps in the hospitality industry for others to fill.
Wages are low compared with elsewhere in Europe and there are plenty of talented multilingual graduates. Smaller businesses could make savings if they’re looking for a Baltic berth.
The technology park will open in early 2016, while accelerators including Green Garage and the Rufus Art Centre also show the growth in entrepreneurship. Canny investors may well see their money go further in Vilnius than in more established markets.
Setting up: Free but a limited company must have a minimum equity of €2,896.87.
Time taken to register a business: Three days
Office space: €800 to €15,600 a month per 100 sq m.
Staffing: EU citizens can work without prior notice and share the same rights and duties as Lithuanians.
Foreign investment: Those looking to start a business can get a residence permit within a month but must invest €29,000 and employ a minimum of three locals.
Average monthly wage: €699.80
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