Sitting down with us today is General Secretary of ASPIRE, Andrew Hallam. As an influential part of a multinational corporation that aims to strengthen businesses in various sectors, and as a leader in the business world in Krakow, Andrew has a unique perspective on how multinationals and startups can work together to create far greater good than they could alone.
Mentions and links:
Table of contents:
- 00:48 Intro
- 02:53 Background of Andrew Hallam
- 05:00 Why Krakow is becoming a place other nationalities come to for work.
- 07:15 Krakow is no longer a place to get the cheapest labor you can.
- 09:00 The history of Krakow attracting people like a magnet.
- 11:30 The significance of the Market Square in the evolution of business in Krakow.
- 14:00 Why the corporate world has had to adopt the startup ethos of sharing ideas.
- 16:20 Should you do business face to face or through technology?
- 18:20 How corporations and startups help each other, despite suspicions they have.
- 20:15 Follow these steps if you want to come to Krakow for a startup adventure.
- 27:45 The hunger of the younger generations to be global.
- 28:50 How safe is Krakow?
- 34:40 What is the government doing to increase the prosperity of the city?
- 36:40 How governments can communicate better with business.
- 38:10 The startup community’s default mode is to pay it forward.
- 44:50 What’s the next step in the ecosystem for Krakow?
- 49:50 Outro.
Hello again, Project Kazimierz listener. My name is Sam Cook, your co-host as always with Richard. Richard in Krakow, myself in Warsaw. How are you doing, Richard?
And today we have a very special guest, Richard as tradition; I’m going to let you introduce Rafał. It’s actually someone you’re just saying before the show, you haven’t actually met but you both been in Poland for a long time in different cities doing a lot of great things, so we’re here with the head of Google Campus Warsaw. So Richard go ahead and introduce him.
Very well. Good morning, if it’s morning wherever you’re listening.
Or afternoon, right Richard? Your trademark opening.
It could be the middle of the night, Sam. Some of us don’t sleep.
Whenever you happen to be listening to this podcast, in whatever year, as Richard likes to say, because this is going to last a hundred years. Andrew Hallam is our guest today. I’m confidently pronouncing the name. I usually have Richard announce the name because he speaks Polish better than me, but our guest today is Andrew Hallam. I’m going to let Richard, who’s known him for a long time, give the intro of Andrew’s background, very deep history here in Poland, with a lot to share.
Andrew and I have a lot in common. We’ve both lived in Krakow for a very long time, at least in the region of twenty years, or slightly longer possibly. We cooperated in the British-Polish Chamber of Commerce in the 1990s, where I felt very honored to be a 27-year old vice president, or vice chairman. I think normally of chambers of commerce with grey hair, boring old men in suits. I was everything other than grey haired at that stage. We raised kids in this country, and more recently he’s set up and led the very successful ASPIRE organization, which brings together IT, outsourcing, and shared services company in Southern Poland. I think now that are 50,000 people working there.
Let me say a few words, not so much about ASPIRE to begin with, but about the business services and technology sector in Krakow. Richard mentioned 50,000 people are employed in that industry in Krakow. I think this is often like, you look at math and you don’t necessarily understand the scale that you’re looking at. That 50,000 is the largest number of people working in any industry in Krakow. It’s also the largest number of people that work in our industry across Central and Eastern Europe in one city. Krakow is the largest city for business services and technology in Central and Eastern Europe. With the ranking which everybody use in terms of global ranking, Krakow is first in Europe. It’s only behind those great big Indian cities in terms of outsourcing and business services. This has only happened over a five to ten year period with the industry growing at 20% a year in terms of its headcount.
It’s transforming the city. That’s the industry. With 130 plus multinational brands delivering services from Krakow or having development centers in Krakow. It’s a real success story for Krakow. When I say it’s transforming Krakow, it’s because actually these jobs pay very well, and year on year so the complexity of the processes that are being delivered from Krakow are getting more complex. Consequently, they’ve become more and more interesting jobs. That’s why I talk about the transformation of Krakow. These young people that are working in the industry, because the jobs are here, they’re not leaving Poland. Everybody has this story about Poles emigrating to Western Europe. That’s not really happening in Krakow because there are jobs for graduates. More to the point, what’s actually happening is people that are finding it difficult to find work in Southern Europe, some parts of Northern Europe, from Eastern Europe, they’re actually coming to Krakow for work.
Also, Andrew, one of the things I think you’re seeing with people like myself and a lot of other people showing up, is people from Western Europe, more and more English Americans, not just English and Americans with Polish roots, but just random English and Americans like myself. Some other people I’ve met are just …
I wouldn’t describe it as random. Neither Andrew nor I have Polish roots, so there’s a net of random people is quite well filled.
You guys were 25 years before your time, I guess. I think there’s just a lot more of your type showing up. I consider you guys Poles at this point.
You’re absolutely right. What’s happening is that Krakow is becoming a destination. This is a sensitive subject around the area that I work in. There’s an assumption that you will move your back office processes to a cheaper cost location. You’re always chasing cheaper labor. It’s a labor arbitrage game. That’s really not the case anymore. When you’ve a scale that we have here, when you’ve got a maturity which we have here, this actually creates a new kind of value. Actually there’s an innovation which is going on in Krakow, in an industry like outsourcing. People usually talk about R and D, they usually talk about startups, but this is actually happening in industry, in business services. I think that’s quite exciting, and that’s what’s bringing people to Krakow. Not just tourism, because they’ve always come for tourism, but they’re now coming for work because it’s a nice place to live, and there’s plenty of work, and it’s interesting work, and it’s well paid work in terms of the local environment.
Andrew, you bring up a really interesting point. I didn’t come to Krakow having any idea that I was going to actually live here. I just came because I heard that it was a beautiful city. Out of anyone, you probably know all the random people that are showing up. Between you and Richard, you guys know them, so I guess this is a question for both of you. How many of the people you see showing up both in the corporate, Andrew, and the startup world, Richard, are drawn here just because they happen to take a random visit versus people who know about it from before. Maybe they heard about it from Project Kazimierz, maybe it’s not happening on a large scale yet, but some people might have run across this.
Going back into the corporate area which I know, there’s a huge demand for people. We’re talking about multinational companies that have operating companies in every country, so they’re actively recruiting people.
I think a bit of historical … I know Sam you are talking about your background instructing American soldiers in history. In 1980, before Marshall Law, Poland had 10 million tourists. Poland was a very popular tourist destination in Central and Eastern Europe way back, although I don’t know the statistics, for pre- second World War tourism, I doubt very much that Krakow wasn’t the sort of city people would like to come to back then. Obviously it was part of the Austro-Hungarian Empire and the Austrians were quite a prosperous bunch and Krakow was certainly a city built in the same architectural style as Prague and Budapest and Vienna. Krakow did have this historic role. From the business point of view, that’s a slightly different story, and perhaps Andrew can talk about that.
I was going to say, just on the history part, people often ask me, “When did this all start?” I often answer, “Well, this is actually a story which is 600 years in the making.” What do I mean by that? I mean Richard is absolutely right. Krakow has been at the crossroads going East, West, North, South through history. Yes, it’s gone through a period, probably over 150 years, in which it was becoming shabby, in which it was losing it’s place in the world. Maybe this is why it appeals to people like me and Richard, being British.
Andrew studies in Oxford. I lived in Oxford, studied in Cambridge. We’re two of the only members of the Society of Poland to live in Krakow. I’m working to change this, as many things. It wouldn’t be the most dynamic organization. It would be very dynamic. There wouldn’t be much disagreement. We’re having a meeting of the association now, in fact. Let’s tell our colleagues …
I don’t feel worthy at all with my military education here.
For people coming to Krakow, I always say, “Make sure you’re on a second Thursday so you can attend open coffee, come to one or two of the networking meetings.” If you’re extremely well organized, you might even get an invitation from Andrew Hallam to attend an ASPIRE meeting, although some of their meetings are only for their exclusive corporate members, but they have other open meetings where even people like me get in. The point is that you should also go to the museum under the main market square, where there’s a wonderful pastiche of the economic history where you can see the way they were assessing the quality of lead and copper and different standards organizations. Of course, pre-modern standards organizations, there was always this need to check, is this really gold? Is this copper to the standard? Krakow had that function. It wasn’t just a trade route in the sense that if you didn’t come through Krakow you were going to be hijacked, it was also come through Krakow and value would be added. It’s no mistake that the Rynek Główny means main market square. It says a lot about a city if the most important place in the town has the word market in it. In Britain we’ve got Trafalgar Square. A general on top of a core and a fountain.
This is an absolutely essential point just now. Everything radiates off the market square in Krakow. If I go back nearly 30 years, when I first came here, and of course there wasn’t mobile phone technology and the people in town didn’t have landlines. The market square was the place where everybody would go to meet. You didn’t know who you were going to meet, because you couldn’t actually contact them before you went there. You would just go there. You would run into somebody, for sure, that you could do business with. The whole of Krakow radiates from that market square. That’s the culture of Krakow. It’s actually the culture of ASPIRE. If you want to ask why Krakow has become this giant in terms of business services and technology, it’s because it’s actually the local, it’s the intimacy, it’s the fact that people can meet often, it’s the quality of the conversations that happen when you meet often. Even though the fact that we are now talking about Skype et cetera and our industry is completely dependent on technology and the closing down of distance by technology, but its success is also to do with high touch.
It’s definitely a different characteristic. I’ve been spending a lot of time up in Warsaw recently for business opportunities, and there’s a special nature to the Krakow community. It would be a lot harder in a city like this to meet everyone in such a short period of time like I did when I was Krakow meeting just about everyone. It’s geographically close. There’s a lot of meetups and different things. It’s a really special culture on the corporate side and also the startup side in terms of the community. I think a lot of that definitely has to do with the history of the way people are there.
It’s very much appreciated in the startup world, this idea of sharing ideas. It’s less appreciated in the corporate world, especially when we are competing, all of us, for the same talent. However, what’s going on in business … I mean, business services is just a business model for corporations. More and more trust is being put in business services for various reasons. One of them is to do with cross. We’re naturally competitors, but because things are changing so dynamically, we’ve actually discovered that we are collaborators in developing our own success.
Just a few days ago Andrew and this guy were organizing a meeting for the different heads of these different companies about recruitment challenges. It’s a clear issue when the city is bursting to the seams with people who have jobs and every six or eight weeks another, I think Cathay Pacific, a big Hong Kong airline that opened up and they want two or three hundred German speakers. This could be a little bit … On the one hand everyone says hello. Clearly on the one level the discussion could be borderline illegal, “How could we keep wages down?” but in fact, the result of everyone being in the same room through the association means that good ideas … When we’re recruiting, tell our agencies not just to recruit within Krakow, but to recruit across the region so it’s not just about poaching each other’s staff, it’s about increasing the talent pool.
On the other hand, make sure we communicate with the local government about the need to work to increase land for housing development and apartment building. If you have more and more people piling into the same city without increasing the housing stock, guess what’s going to happen to rent. Obviously, when Andrew talks about good salaries, they will seem low compared to Western Europe, but a thousand Euros a month here goes a lot further than a thousand Euros a month in London or Dublin, where you go out for a couple of good evenings on the town, and bang goes your thousand Euro … Partying like Andrew does, bang goes your thousand Euros. There’s actually a lot going on about this issue of face to face or technology. It’s a commonplace. It’s much easier to do business with people over the phone or Skype or email once you’ve met them, but it’s not either/or, it’s both/and. It’s no accident that both in the startup community people want to meet and that you sound through open coffee and now we’re dealing with each other on Skype. We need both, but people really appreciate, because there’s so many things you pick up when you meet someone. It’s about trust, it’s about sharing experiences, it’s about sharing problems. You’re not going to say in one of these big multinational companies like Cap Gemini, “We’ve got a problem with staff motivation.” Then you go out for a beer with the same guys later. “What are we going to do about motivation?” Then you share ideas, and they may be competitors at some level, but on the other hand they’re also human beings, and if they’ve got a way of making their staff happier, they can share. At the end of the day, it’s not like it’s a huge loss to the other one.
I think that’s absolutely true. The fact is that human beings have got far more motivation, and different kinds of motivation … It’s kind of bounded uncertainty that takes place when human beings talk to each other, as opposed to when corporations speak to each other.
Talking about certainty, one of our first interviewees is someone we all know well, Ramon, who’s been … I wouldn’t call him a godfather because in some circles that’s seen as a bit insulting and in others steered toward a particular religion, and we’re kind of agnostic and globalist here very deliberately in current circumstances. Ramon did make some initiatives within the ASPIRE organization to bring together the startup community in one of your conferences. We’re going to talk about slightly sensitive issues, how the ASPIRE community sees the startup community. I’ve got my own opinions, which I share from time to time, but you’re a guest, so people might be more interested in what your members think about startups.
Those that came in with a model around cost, where the jobs maybe are not quite as interesting, they fear the startup community. They fear the startup community may be offering a more rewarding work environment. For people that want more excitement, they may be encouraged to move from the corporate environment into a startup. There is that one perspective. I think that’s why we don’t have a very well developed relationship with the startup community. Companies have come in more recently in the tech space, and I think Google would be a prime example of this, but it’s not just Google. Everybody always mentions Google, but there are all kinds of other tech companies now coming into the space who feel that having an environment around them which they can actually support of people that are doing startup, not working for them. There is a synergy from that relationship. What the flow is, I don’t think anybody is very, very clear at the moment. There are more of us that are prepared to reach out.
In terms of the startup community itself, I think it’s a little bit distrustful toward the corporate world. I think it tends to look at the corporate world as funders and such like. Not really looking at where a deep collaboration might take place. This is all changing.
Yes, I certainly think it’s undisputable that different people have different career goals at different times in their lives. It’s one thing when you’ve got two small kids and a mortgage. It’s another thing when you’re fresh out of college. It’s another thing if you’re arriving in Poland with a non-Schengen visa, as many Ukranians … Sorry, many Ukranians coming here get a Schengen visa but part of it is attached to having a particular job. Different people have different circumstances, but once you’re in town, when you’re considering whether to come here. I always say, “Networking happens before the event, during, and afterwards.” The fact that there are different things going on in town, not just a thriving startup scene and a thriving corporate business services scene. Also, there’s a thriving university. There’s a thriving tourism sector. There’s a thriving university cultural [inaudible 17:51]. That means there are more choices. There are more choices, and maybe two years in a startup, I’ll see what I can make it. If it doesn’t work out, the existence of the bigger employers is a kind of safety net. It may be the other way around. I’m going to come to Krakow, get settled, I’ll come to open coffee in the morning. There are many people who come to the open coffee meetings from eight until nine who do say, “I work for Cisco.” Ramon, if you’re listening, don’t worry. You said you’re in favor.
On the other hand, there’s a guy who had his small CRN business, he came to open coffee for a while with his startup, and now he’s working for a big, three letter Scandinavian engineering conglomerate beginning with A. [crosstalk 18:43] You don’t have to go far down the alphabet. You’ll get there before you reach C. It’s not the Australian Broadcasting Corporation, but no, he’s now with them. This clearly increases the attractiveness of Krakow as a destination. A business I’ve involved with in London says, “The great thing about London is people like moving to London, because there are so many choices.”
I think that’s absolutely the point, isn’t it? It’s about diversity. The interesting thing is that has happened over the last 20 years. This was an incredibly homogeneous society 20 years ago, and it’s becoming more and more diverse. It’s also … Richard touched on the universities. The universities are very, very important, but the sheer weight of numbers of people that go to university in Krakow, nobody could ever believe this. It’s 200,000 people that are in universities in Krakow. That dominates the atmosphere in Krakow, I would say. That’s why it’s such a young … That’s interesting, isn’t it? It’s obviously an old place, but it’s also a young town. It has that tension always between these various things, such as tradition and modernity, young and old, hierarchy … There’s a lot of that creative tension because it’s got friction, and I think that’s why people find it a really interesting place to be.
What about the stereotype of the Erasmus student. It’s famous. It’s our fellow countrymen back in the U.K. take this momentous decision, whether to leave the European Union. One of the things British people will lose access to is the Erasmus program, which means pure British students abroad, pure [inaudible 20:39] students in Britain. Yet another nasty little consequence of the decision that may be taken. There is this view that it’s just a cheap place for people to come party, not just for the students, but also for the stag nights. Do you think that accounts for the negative view of foreigners sometimes?
It’s the drunk British tourists that give Krakow a bad name.
I think I have a different view on this. I think the people that least like the foreigners that come here and party, are the foreigners that have been here some time. They’re not very keen on the fact that other people have discovered their Krakow.I don’t see outrageous behavior from people visiting Krakow. If you go to Leeds on a Saturday night, you’ll see far worse.
I want to put this way, Krakow is an incredibly safe city. Anybody would be absolutely astonished about how safe you feel walking around Krakow. The other point I would make is this, yes there are some Polish people that I think are not so keen on foreigners. I think this is a generational thing. That’s to say, the young people that are mixing, all the time, in an international environment … Even if it’s their work in terms of, not necessarily the people they’re working with but that the people they’re speaking to on the phones, or their clients or customers, are in these other countries. For them, they’re hungry to be part of the world. They really enjoy having foreigners here. They enjoy the fact that they’re in this international environment at work. Whenever you speak to them, they’ve always been … These kids have disposable income, they’ve been on city breaks over the weekend, gone on a low budget flight, gone off to Barcelona or somewhere like that. That’s that generation. I think there is a generation above that, it’s that generation that probably didn’t mix very much. When there was a Berlin wall, didn’t actually mix very much with people outside of their community. I think they find a little bit more difficult to accept. They’re probably the people anyway that haven’t received the rewards of the last twenty years as the Polish economy has opened up.
I think it’s really important to say that it really is an incredibly peaceful society, even if people say things. In my twenty years, I’ve never seen violence.
I’ve experienced it once and seen it once. Obviously my route into town is past the football stadium. I often say both on this podcast and elsewhere, “One of the responsibilities of business people is to pay taxes. We need to have police, we need to have our soldiers, we need to have our infrastructure.” For all the curses of it steadily improving, it does steadily improve. Perhaps not as fast and as quickly as we’d like, but as we drive past the football stadium or I walk past the football stadium, the rows and rows and rows of riot police basically do keep order. It would be better if there were no violent fans and no riot police, but it’s very reassuring that the riot police … I feel that’s what we’re paying our taxes for.
Naturally, but that’s just a very specific subculture.
Yeah, football fans are a problem everywhere. I certainly agree that we … I don’t know from Sam, maybe you’re in a better position to comment, because you come a country with a slightly different law and order tradition. From the American perspective, how does Krakow seem from a security perspective.
Well, I’m very shocked that no one’s riding around in pickup trucks with guns, because that’s entirely normal to me where I grew up in the United States. It’s a completely different environment. Sometimes I wonder how our civilizations, which I would call cousins, the North American European civilization, have gotten so different on so many big issues, especially related to guns and the way people see the right to bear arms. I’m very struck by how safe it is in Poland. I’ve heard some stories from people about going to the Cracovia Wisla football matches, those aren’t so good and you want to stay off the streets that night, which is one night a year. I’ve never seen it personally. I’m definitely a big fan of the serenity you feel in a city like that.
I’ve heard from several Americans, that when they came to Krakow, that’s when they learned to walk.
I actually just installed recently, just because I was curious, a tracker on my phone counting steps. I routinely walk ten kilometers a day, no problem. You would never do that in the United States. That would be considered a workout, going to the gym and blocking off time for that. I just listen to podcasts and walk around Poland. Whether I’m in Warsaw or Krakow, I love walking, my preferred method of transportation versus take an Uber when I’m late. That’s when I take Uber.
This is a chance to give a applause to Krakow mass transit system, the MPK system, which is absolutely phenomenal. I grew up in Oxford, lived in a village in the countryside, spend some time in Cambridge, and although I believe to some extent public transport has improved in some citizen in the U.K., London clearly being an example, considering the resources that have gone into it, it’s absolutely spectacular. You can get from almost anywhere in the city to almost anywhere safely for around a Euro or less.
Absolutely, especially in the business complex. People say that Krakow has no central business district, but the fact that it’s so compact, it doesn’t actually need a central business district. It operates on this.
Despite a love affair with the car, which I rather regret, because the trend of modern society is against cars rather than in favor of them, I think partly for understandably sad reasons a lot of people of the older generation dreamed of the day they could have a car. To some extent you can’t deny that dream. Having said that, the planner rigorously built bus only lanes all over the city that are inaccessible by cars. They have nice concrete rims to stop cars from driving into them. That actually prioritizes public transport. As a parent, as well, it makes a tremendous difference that you can safely send your kids off to their after school classes or wherever from the age of eight or ten onward, with a bus pass and they get there. There’s video on the buses, so there’s monitoring. It’s this halfway house between being fully independent and being under parent control, in contrast to the American or sometimes British concept of helicopter parenting where you’re in the safe zone in Baghdad and you go from the airspace, and society in between is completely inaccessible..
You have to say here that the Communists were actually a little bit ahead of their time because Nowa Huta, a city that was built by Stalin, there are actually bike lanes. 1950s. I’m not making claims for communism, don’t get me wrong. Credit for communism and Stalin in the same sentence has not happened so far.
Maybe the current climate in the West makes you nostalgic for such figures, right Andrew? We’ve managed to offend just about everyone in Europe and twice over in Poland talking about Hitler and Stalin.
Hitler, Stalin, dogs and chicken … Anyway if we can bring it back toward one of the things we like … Technological trends. You mentioned the planning system, and I think you probably have more dealings with the government than Sam does, and I’m somewhere in the middle. I have the privilege to sit on one government committee, which I regard as a civic duty rather than a huge source of pleasure. What do you think the government has done that worked and should be doing that it’s not doing to increase the prosperity of the city. I’m not talking about individual events, but from a strategic point of view over the next five to ten years.
What are the things they know how to do? I think they know about infrastructure. I think the raise infrastructure, the transport infrastructure, the airport infrastructure. Those are all good things that have happened over this last twenty years.
They’re extremely visible. There are reasons why politicians go for those extremely visible things as well. What they’re less good at, because I see them as having a convening power. They have this ability to bring partners together. Vision and strategy is the weaker. I think it’s completely understandable, because I think different parts of these post-communist societies are moving at a different pace. Government and institutions generally are moving at a very slow pace, weighed down by the weight and burden of history and how things are done and national identity and such-like things.
I think young people, and in corporations and often in global business environment, they’re moving at a very fast pace. Different parts of society are moving at a different pace. Government, which should take the lead in bringing people together, doesn’t take that lead in bringing people together. Consequently it’s up to newer organizations like ASPIRE or individuals like yourself and Richard to move things forward. That’s a good thing, isn’t it? We’re far more as individuals, as groups of individuals, as networks. We’re far more flexible, and there’s far more intelligence within a network than there necessarily is within these institutions. Of course, it’s not quite as democratic. We understand the way it should work. I never criticize too much the way things are going in terms of government. To be honest, I just don’t think they impact what we do. Could they have a more positive impact? Yes they could? But how? Do any of us really know how?
One of the very good things that’s happened in the last two or three years, is that representatives both of the regional authority, the Wielkopolsk region, and very recently members of the city authority have started showing up to startup community events. They come to open coffee, they’ve come to some hive events. This and startup stage, these are the regular fixtures of our community. I always emphasize that this is thoroughly welcome. It’s a completely different story to go to a government office if you’ve met someone before you go there. They say, “Yes, there’s a program. Yes, you got a realistic chance of getting off the ground for 5,000” … Or a subsidy of 5000 is what you need to get your company to a trade fair in Germany, or “Yes, you can have space on a stand at a stall in the Las Vegas CFL,” or whatever it is. It’s a different story. What historically went wrong was the meeting would be called and the time called an inconvenient time of day. The intention was good, “We’re going to cooperate with this or that community,” but the outcome was attending a meeting that started late, where there was no dialogue. There was just a presentation of government programs, and then the meeting ended.
I think that’s something in the culture, the levels of formality. You need to move outside those formal environments in order to communicate. The cultures are just so different, but people aren’t. You need to move outside of those formal environments to start relating to people.
I think one of the things you’ve done Andrew, in ASPIRE, and that the startup community has been pioneering, and is often claimed by Silicon Valley rather excessively but they certainly have no monopoly, is this trust culture and what’s called paying forward. The idea that default mode is to be helpful, helpful to strangers. In the U.K., whether it’s property, law, accounting or banking, the old professions, they don’t help people. They don’t help people by default. They expect an introduction fee. You scratch my back, I scratch yours, is as good as it gets. The idea that someone as successful as one of our previous interviewees Piotr Wilam, who has made a significant fortune, shows up and he’s ready to give time to people of 18, 20, 16, 22 just to talk through their business idea. This is standard for the startup community and I think it’s spreading across other sectors. One of the nice things, not the best thing but a very positive thing about Poland, people of Poland want to modernize the country. Even if they’re from an old profession, they like the idea of Poland raising itself to what you might call global standards. There’s a slight opportunity here to make the the global standard, as Andrew has done in the ASPIRE community, our standard is we help each other, we talk to each other. It’s not an illegal collaboration, it’s simply sharing our problems and looking for common solutions.
I would agree. I’d even go so far as to say the kind of collaboration we see with ASPIRE is quite unique. It’s not just unique to Poland, it’s unique. We’ve actually developed a model. Certainly there’s some thought leadership about what business services is that’s emerging out of Krakow.
The great thing is sometimes we’re ahead here, compared to what’s going on back at headquarters. For example, I think it’s Intel has roll up in the T Mobile-funded hub:raum coworking space in Krakow. These guys are competitors in other parts of the world. Here in Krakow they’re coworking. Google [inaudible 34:17] was cooperating happily with hub:raum. I’m not sure that Google and T Mobile would exactly hang out together in other … Maybe I’m wrong. Maybe I’m wrong, but I think there’s an opportunity to slightly beyond normal boundaries here. We’re not the center of the world, right?
I think part of this is there’s an excitement about creating something. That’s why you get together. You think, “What could we actually create?” There’s a tremendous freedom around that. We’re not working in an incredibly structured environment.
“There’s an excitement about creating something. That’s why you get together.”
One of the interesting topics is the changing role of senior Polish business executives. I won’t say businessmen, because fortunately Polish business life isn’t totally dominated by men. Fifteen, twenty years ago there was this stereotype that companies were all run by foreigners, and the badly paid jobs are done by Poles. How far do you think that period is categorically over, because you have a lot of experience with quite big budget organizations. I don’t know what the budget of a typical service center here in Krakow is. This are significant entities, aren’t they?
Yes, very significant. Employing anything up to three thousand people. It’s not over. Partly, the industry is young. I suppose people now have been working in it for ten to fifteen years, and there are some really, really forward thinking Polish managers leading centers. I’m not saying everyone’s like that, but some of the best are people who’ve grown up with the industry here, that have a pride in the fact that the industry is here, and a vision of what the industry can achieve here. There’s that group, there are ex-patriots, and in a sense there always will be. That’s not because the talent isn’t here, that’s because of it’s simply essential to have that relationship between the business, the head office, and the remote center for outsourcing to work. You will get ex-patriots because you’ll have people that have been working within that corporation for fifteen or twenty years. Of course, now we’ll starting to get Polish people that have worked within the corporation … They’re moving from the shared service environment into the corporate environment.
Take a company like Philip Morris, where the senior people in Europe are actually Polish now. There’s a reverse engineering going on there. I don’t think we should be aiming at a situation where we even see where the people are local or not local. I don’t think we should be aiming at a situation where all the top jobs are occupied by Polish people. I think what we’re aiming at is a multinational environment, and it doesn’t really matter what nationality they are. They could be Polish, or they could be British, or they could be Vietnamese.
Earlier in the conversation you used the word diversity and I think that’s exactly right, and it’s particularly important. It’s certainly worth [inaudible 37:07] I believe in this podcast. We do have a line on internationalism and diversity that although you’re not Polish, you’ve lived here for the majority of your adult life, as have I. We see the future of this city being internationalist, which means that you have great opportunities for Poles and great opportunities for foreigners. One of the reasons why foreigners are happy to come and work in Krakow is because it’s not a monoethnic, monocultural place. You meet people from all over the world here, which is not to criticize locals, just to feel that you have a choice. If you move to Aarhus to the North of Copenhagen, I’m not sure Our Aarhus listeners can make a demonstration outside the Polish embassy in Copenhagen. Aarhus is a bad choice because there’s a British subsidiary, and there’s Lego, which I guess has some foreign employees. The point I’m trying to make is we have diversity here. I appreciate we’re under time pressure, Sam, is there anything else you want to ask Andrew while we’ve got him?
Andrew, one quick thing. You talked about some of the multinationals that are scarcity minded, where they feel threatened by not only other multinationals but startups. It seems like the movement you’re trying to lead is evolving towards much higher end, much more complex creative business companies that actually come in and embrace a community. Inevitably, Poland is on an upward march economically in Europe to ten to fifteen years from now possibly … The goal of the government, and I think of all the Polish people is to get some kind of wage parity. Where do you see your movement long term going, and what do you see ASPIRE’s ultimate mission is as Poland really catches up with Europe. I think that moment’s inevitable, I don’t know how long it’s going to take. Based on all the talent here, I think it’s coming. What’s the next step in the ecosystem for Krakow.
Maybe it’s inevitable. Maybe will overtake. If we focus on the cost arbitrage, then we would say at the point we reach parity, then everything will disappear from here. In fact, it’s a much more dynamic landscape than that. In terms of more complex processes arriving here, in fact what’s happening is locations move up the value chain. It’s locations that move up the value chain, not companies. Companies will choose to put different services in different places depending on the capability of that place. The ability of the place to go up the value chain, and Krakow’s the perfect example of this, is driven by multinational organizations. The other stuff that we can talk about which is really exciting and startup creativity et cetera, I don’t think any of that would be happening without the wealth that the multinational corporate sector is generating in Krakow.
This is the perfect point. In the old days of big pharma, where they had unlimited budgets for R and D, the R and D centers happened to be in the nicest places in the world, in Switzerland, on the West coast of the United States, nice bits of Asia. They would build their campuses in places that people would love to work. Money was no object. Obviously we’re probably not going to get to money is no object anytime soon, but there are people who live here not because they have to but because they want to. Those people don’t stretch into the tens of thousands, they’re into the hundreds of thousands of people. The other thing is, the concept of business process outsourcing or business process automation, actually, it makes sense to centralize, automate, and streamline your processes anyway, wherever you do them. You can do that within France and it still makes sense. At the moment, due to the wages, it makes sense to move that center from Toulouse or Marseilles to Krakow, or for that matter to Bratislava or Rzeszów. Those arguments are stable, but there’s such a critical mass here. The other thing is, you come here, and you will find people who are already here. You don’t have that critical mass issue.
You’ll find people, but we’re the change here. We’re driving the company to move more complex processes in. It’s a bit of push and pull, obviously. There are budgetary reasons for wanting to move higher value staff. At the same time, you’ve got to believe in the capability of the place you’re going to locate them. Krakow has won that trust. Once you’ve got this proof of concept, then bit by bit you will move more complex process.
Cisco, as Ramon said, I think they’re looking for 2,000 R and D jobs, 2,000 engineering jobs. The stereotype they call it “praca z słuchawki”, “work with headphones.” The old stereotype of the call center. There is that stereotype, it may be the starting point, but it’s no the destination.
We can accommodate that. It’s very important to understand that we can accommodate that in Krakow. Those are the jobs actually that are going to disappear. Those will be automated jobs wherever, they will be automated jobs. It’s actually the presence of the companies which is important. These are like shifting sands. Work is being migrated out of Krakow all the time, and has been over the last ten, fifteen years. At the same time, work is being migrated into Krakow. We have that overall growth in headcount, and an overall moving up the value chain. To your question, yes ASPIRE exists to help our members capture value. Where will it end? It will end with Krakow having captured that value. There isn’t an end for ASPIRE. This is a very long path to take for Krakow itself to move up the value chain.
“ASPIRE exists to help our members capture value. Where will it end? It will end with Krakow having captured that value.”
It’s not like when New York City became one of the most expensive cities in the world, many of the multinationals left. You’re seeing that in all the great tech cities. Andrew, I just wanted to wrap this up here by telling you, I’ve heard so much about you in Krakow. Every time I talk to other people, you’re really leading up the multinational side of things. I think the most impressive thing here for listeners to understand, is there’s not an either/or between startup and multinationals. There’s not an either/or between multinationals and other multinationals. If everyone focuses on growing the pie, which is Krakow, and even within Poland, Warsaw is moving up quickly because of Google Campus and other stuff. That’s just going to make Krakow step up it’s game more. Ultimately, it’s not a zero sum game, economics, although some political candidates these days say it is. I think that just seeing the leadership you guys have provided in the community, Richard in the startup community and Andrew in the multinational, seeing how this relationship has really facilitated breaking down some of those barriers is really great to see. Congratulations to you Andrew. Thanks for coming on the show. You too, Richard, my co-host. Congratulations on cooperating.
Congratulations to you too, Sam, finding the time to do this from Warsaw. Well done, Sam. Also, just as always, please do leave a positive review of this on itunes if you like the show. If you can’t stand it, do send Sam a quiet email.
Also please take the time to like us on Facebook and sign up for our email list where you’ll get announcements for future shows as they come out. Subscribe to us on your iphone or on Stitcher or on an andoid device so that your next episode is delivered while you sleep, and you can wake up and listen to it while you’re walking around Krakow or any other beautiful city in the world.
If we’re doing a plug, can I say move to Krakow. We will create 12,000 new jobs in our industry this year. Interesting jobs. If you speak your own language, we’ve almost certainly got a job for you.
“Move to Krakow. We will create 12,000 new jobs in our industry this year. If you speak your own language, we’ve almost certainly got a job for you.”
To clarify, this year means 2016. If you’re listening in 3016, there is this website called Google where you can check these things and I imagine you’ll be aware of an alternative.
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