Bacau Partner Profile

Bacau is in the North East of Romania and sits on the Bistrita River. Despite huge job losses in heavy industry during the 1990’s, employment in manufacturing is growing and accounts for 28% of employment.

About The City

• The city has a population of 144,307 with a rapid decrease from 1992 to 2011 of around 42%. The city has an ageing population and the unemployment rate is between 6 and 7%. It is home to around 6000 university students.
• 99.75% of all companies are small and medium sized enterprises (SMEs) and these account for 62% of employment.
• In 2015, the top 10 economic actors contributed over 50% of the city’s total turnover.
• Services / the tertiary sector account for over 40% employment.
• Other key local employment sectors include wholesale and retail trade and manufacturing, particularly in metal construction materials, food and transport / aeronautics / aerospace manufacturing (including Aerostar, one of the country’s top companies)
• Tech, manufacturing and financial, business and professional services are seen to be important economic sectors for future economic growth economic growth

About the policy context

The good practice will be transferred within the following policy contexts:

• At national level, Bacau is one of 13 ‘development poles’ alongside 7 ‘growth poles’.
• Interestingly software engineers do not have to pay income tax, a policy which aims to keep talent from leaving for other countries.
• At regional level, the Regional Development Plan 2015-2020 includes priorities around improving the competitiveness of SME’s.
• At local level Tech Revolution is aligned with Integrated Urban Development Strategy for 2014-2023 which includes priorities around talent, innovation, R&D and entrepreneurship.

Strengths and Weaknesses

Strengths

• Growing manufacturing sector and strong food, textile, aeronautics / aerospace sectors
• Located on a strategy transport corridor (former TEN-T IX corridor) and major logistics hub

Weaknesses

• 1 single and poorly equipped business incubator located outside the city centre
• Low level of entrepreneurial activity
• Poor development of tourism sector
• No direct road links with important nearby urban centres and under-developed city centre
• Under developed infrastructure
• Low salaries alongside reasonably high cost of living

Opportunities and Threats

Threats

• Labour / talent shortage due to demographic change and shrinking population caused by out migration
• Competition from nearby Suceava
• Globalisation could theaten the city’s identity
• Despite the tourism potential of Bacau City, it still cannot compete with the main regional tourism centres (Iasi, Suceava, Piatra Neamt)

Opportunities

• 2014-2020 funding programmes include priorities around improving SME competitiveness
• Exhibition and Business Centre in Bacau provides opportunity to strengthen the economic position
• HIT Industrial Park is an opportunity for the development of the business environment
• Workforce development programmes are emerging which will support adaptation of skills towards digital economy
• Modernisation of airport offers potential for tourism as does construction of Trans Regio TR61 (2021-2023) and DX5A expressways and the Brasov – Bacau highway by 2030.

A description of the Good Practice challenge

With the challenge of transforming the city into a digital city, Bacau municipality wants to learn from expertise and experience from other cities in order to better prepare its citizens (young and old) for the challenges of the digital economy. It wants to diversify its economy and sees supporting entrepreneurship as a prerequisite for successful economic growth. It also wants to develop new and better business support infrastructure and sees international links and collaboration as an essential element of this work.

The URBACT Local Group (ULG)

The ULG will spin out of an Innovation Consortium and will:

• Having a collective approach to the development and delivery of actions based on learning from Barnsley.
• Acting as an advisory group during the development and delivery of the Youth Hub – reviewing progress, supporting the municipality to manage the operator and feeding learning from TechRevolution into delivery.

ULG membership will include: the Municipality, Local Development Agency, School Inspectorate, University, Romanian Smart City and Mobility Association, Rubikhub (co working space from neighbouring town), businesses (TELEKOM, Orange, Vodafone), Local Environment agency, Chamber of Commerce, Industry and Agriculture

Assets for, and barriers to, transfer

In 2017 Bacau was Youth Capital of Romania which created an energy and momentum around the potential of entrepreneurship for young people. Bacau has a Business Centre which is currently used predominantly for public events, is out of town and under used. It is in the process of developing the ‘Youth Hub – Cinema Horizon’, a business incubator in a landmark city centre location, with €4.5m from ERDF.

The overall aim is to create sustainable hub for innovative SME’s, helping them to survive and thrive in the vulnerable early years. Ultimately this project aims to have economic impact at regional level and includes objectives around the creation of high value knowledge-based jobs, innovation in creative and digital sectors, creating a network of mentors, increasing the numbers of digital and creative start-ups (particularly those founded by women and minority groups) and creating meaningful links with knowledge exchange and innovation partners.

The city is in the process of finalising an ERDF grant agreement which will enable it to transform an unused cinema- 5 minutes walk from the city’s 2 universities – into an incubation and acceleration space.

In addition, in 2017, Bacau organised a City Hackathon, which aimed to increase the number of citizens that use civic applications in order to report or contribute to solving different city challenges. Stimulating partnerships that reduce the gap between public administration and the digital environment are seen as key.

However, the city lacks an entrepreneurial or start-up culture and perceives its geographical location as somewhat of a challenge, not being close to any other business centres. In addition:

• There is a sense that whilst the solutions, and the resources / people to deliver them are available, the stakeholders don’t always don’t know how to connect them to reach the end goal.
• After procurement, contracting and construction, the plan is to launch the hub by September 2019. Early transfer will therefore focus on what is useful in advance of the physical hub being available i.e. demand stimulation and pipeline development.
• The city has already decided which operator it will use to run the hub. The opportunities to influence development and delivery will have to be developed outside the procurement and contracting framework.
• Working relationships between the ULG stakeholders are still relatively new. Experience shows that these hubs require an entrepreneurial approach. It may be difficult to achieve this within a public institutional context in Romania. It will be important to be creative about future governance structures so that hub management can be entrepreneurial, take informed risks and act quickly where necessary
• The city has a big problem with outmigration of young people. The Youth Hub is one of many planned activities which aim to get young people to stay in Bacau & Romania. It will be important to generate some energy, enthusiasm and support for the hub from the target population.
• Linked to this, young people don’t generally consider entrepreneurship / business start-up as a viable career option

Practical steps to transfer

Bacau is interested in using the following techniques to transfer the good practice:

• Deep dive into the Barnsley good practice to really unpick success and failure factors
• Job shadowing the Barnsley DMC and Enterprising Barnsley team on key issues of interest e.g. community engagement, external networks and connections etc.
• Participation in events, making contacts with other hubs in the partner cities.
• Ongoing consultancy-type support from Barnsley, maybe through online tools as well as face to face at network level meetings and events.

Useful Links

• Bacau.NET
• University of Bacău
• Rubikhub
• Nest Hub Community & Coworking
• Bacau Municipality
• Bacau Local Development Agency
• Geoge Bacovia University
• North-East Development Agency
• Romanian SmartCity Assocition
• Exhibition and Business Center
• Bacau Blog