Metropolitan Research Institute

Metropolitan Research Institute, Budapest

Urban development

Győr: How to compete with capital cities (2018-2019)

Client: European Investment Bank – City, transformed

Duration: June 2018 – February 2019

Located between three European capital cities, Győr has to work hard to attract investment and jobs. The Hungarian city has set itself up to attract innovative companies, creating new urban values such as education-based innovation, a high-quality urban environment and a lively cultural sphere. Here’s how a “secondary city” builds on its industrial past even as it breaks away from its dependence on it.

European Investment Bank (EIB) contracted MRI to elaborate a study on the development pathway of Győr in the last decades, and the role EIB played in it. The study pointed out that Győr is located in between three major cities (Vienna, Bratislava, and Budapest), consequently it had limited potential to attract a mix of large companies and investors. Nonetheless, it had the potential to deploy smart specialisation – and it succeeded in doing so. Győr has been known for its highly qualified work force: before the regime change and economic restructuring, one of the largest state-owned companies (RÁBA machinery) was located here. After the transition, the decreased relevance of RÁBA was compensated by the newly settled Audi Hungaria plant, which has come to employ as much work force as RÁBA did in its heyday. In addition, this considerable manufacturing capacity attracted numerous smaller companies to join the value chain.

The operation of Audi Hungaria is one of the economic engines of the second-tier city. However, it also runs the risk of mono-functionality and high dependence on car industry trends. In order to diversify the local economic structure, a new cooperation is currently being established between the local university (Széchenyi István University), the municipality, and local economic actors. This already resulted in new developments, like the Higher Education and Industrial Cooperation Centre (FIEK in Hungarian).

Győr’s recent development has been strongly supported by European funds (similarly to all Hungarian cities), in which national co-financing was secured by EIB loans. The majority of these funds was absorbed by the private sector, although large scale public developments were also implemented, like the two-stage renovation of the inner city, and the social rehabilitation of Győr-Újváros. In addition, EIB provided loans to commercial banks for various purposes, among others for the renovation of privately owned residential buildings in ESCO schemes (the RaabSol project).

The study is available on EIB’s website in English, German, French, and Hungarian; and was also promoted on the EIB’s blog and social media.

Győr: How to compete with capital cities

European Investment Bank assigned Metropolitan Research Institute with the preparation of a study on the urban development of Győr, a thriving economic hub in Western Hungary – at the same time, a “secondary city” in the vicinity of three dynamic metropolises, which has to compete for workforce and other resources. The study, elaborated by senior experts Iván Tosics and Éva Gerőházi, also takesi nto account EIB’s role in the city’s outcomes.

Located between three European capital cities, Vienna, Bratislava, and Budapest, Győr has to work hard to attract investment and jobs. The Hungarian city has set itself up to attract innovative companies, creating new urban values such as education-based innovation, a high-quality urban environment and a lively cultural sphere. Yet the three capital cities attract most of the development potential in the area, making it difficult for smaller cities such as Győr to attract the headquarters of international companies or to develop large-scale new urban areas.

Győr’s response has been to focus on “smart specialisation” in line with its broader innovation-based development concept. The city’s industrial heritage helped attract investment, especially a major AUDI plant, which has become a definitive player in the local urban economy. Yet this runs the risk of resulting in a monofunctional local economic development direction, and make the city vulnerable to economic cycles. To prevent this, the municipality has long been focusing on diversifying the local economy, relying among others on EU funding (for which national co-financing was advanced in the form of an EIB loan). A flagship pole in these diversification effort is the cooperation between Széchenyi István University, the public sector, and market actors. This is manifested in the Center for University-Industry Cooperation, permitting the implementation of the future Technopolis vision. In addition, EU funding supported the improvement of urban environment and alleviating spatial segregation in Győr. 

The study authored by Tosics and Gerőházi is available in English, German, French, and Hungarian on EIB’s website.

The housing paradox: more financing, less affordability?

Iván Tosics, managing director of Metropolitan Research Institute, has a long standing tradition of greeting the new year with a photo essay of issues he learned about in the old one. His photo essay for 2018 treats the issue of the “housing paradox”: how more financing seemingly curbs the affordability of housing across the globe – and no longer only in the so-called “hegde-cities”.