Ukrainian cities Kyiv and Lviv have made it into the inaugural Smart Locations of the Future ranking produced by Financial Times division fDi Intelligence. Both Ukrainian destinations featured in the global top ten for cost-effectiveness, with the Ukrainian capital city occupying fifth place while Lviv was in eighth position.
The cost-effectiveness category of the ranking assessed 115 investment destinations worldwide on such indicators as rental fees for office and industrial space, corporate and total tax rates, average salaries for skilled workers, and the costs of registering property and establishing a business.
Central and Eastern European cities dominated the category, highlighting the relative competitiveness of the region and underlining the competition Ukraine faces as it seeks to attract greater international investment to the country. Alongside Ukraine’s pair of entrants, Poland and Lithuania both had two ranking cities, while Romania’s Iasi and Bulgarian capital Sofia also entered the global top ten.
Kyiv and Lviv are not the first Ukrainian cities to gain recognition from Financial Times division fDi Intelligence. A 2018 survey by the fDi service ranked eastern Ukraine’s Kharkiv as Europe’s most cost-effective large city. Of the 40 large European cities studied, Kharkiv was found to have the lowest average annual salaries for skilled and semi-skilled workers, lowest cost of establishing a business, and most competitive rental rates for grade A office space. It also had the second lowest costs for electricity and corporation tax.
This latest ranking is a further indication of Ukraine’s rising international investment profile as the country experiences a period of sustained economic growth. Ukraine’s GDP has risen for three consecutive years and is set to remain on an upward trajectory in 2019-2020. Ukraine has also made steady if unspectacular progress during recent years in the World Bank’s annual Ease of Doing Business ranking, climbing consistently from a low point of one hundred and fortieth position in the 2013 report to occupy the seventy-first place in the 2019 edition.