Case Studies   Vilnius Old Town: Užupis – Paupys Area Case study

5.2. Economic strategy

On the basis of and regarding:

1. above described trends and prospects of Užupis and Paupys area’s economic development,

2. Vilnius city’s economic development strategy described in such documents as “Vilnius City Official Plan 1998-2005”, “Strategic Action Plan of Vilnius City Municipality: 2002-2004”, and “Vilnius City Strategic Plan: 2002-2011”,

3. and experience of Entrust cities target neighbourhoods’

economic development, There could be defined the strategies of Užupis and Paupys area’s economic development. Most economic development actions can be classified into four main types of economic strategies for Užupis and Paupys area, namely:

1) Business/investment attraction

The approach involves the attempt to attract the relocation of economic activities from outside to within the community or to attract a new investment from outside the community. This approach requires the community to compete with other communities, including city’s other neighbourhoods involved in the same activity. In this context, it should be taken into account that branch plant profits leave the community and are invested elsewhere, whereas profits from locally owned operations are frequently reinvested locally. Furthermore, locally owned operations tend to seek out local suppliers, whereas non-locally (outside) owned operations tend to purchase a greater quantity of supplies from outside. That is why there is a greater sense of commitment to the local community to the local business. However, there are several advantages of encouraging outside (including foreign) investments, for instance access to capital not otherwise available, access to foreign technologies, access to modern business management practices and processes.

Activities/means:

1. Marketing

2. Advertisement

3. Trade show

4. Travel activities

2) Business retention and expansion

The strategy should be aimed at retaining the more mature enterprises that could potentially relocate elsewhere, and expansion of existing economic activities within the community. The main stress in the strategy should be on local businesses, as the opinion of local businesspersons with respect to the local business environment frequently weighs heavily in the decision of outside investors.

Activities/means:

1. Programs of regular business visitation to ensure that local businesses have an opportunity to have their concerns heard and dealt with.

2. Programs assisting in identifying and developing ideas for business expansion or diversification.

3. Assistance programs to access financial capital.

3) New business development entrepreneurship development

This approach aims to create an environment, which assists people in the development of entrepreneurial skills, and provides the tools and encouragement necessary to assist entrepreneurs in the “incubation” of new business. The identification and marketing of new business opportunities is also an important component.

Activities/means:

1. Creation and use of business incubators.

2. Establishment of a small business centre, which should provide business information, business counselling, information seminars and other services that respond to the local business leadership needs.

4) Sectoral development

Strategies are most successful when they are targeted to specific markets, specific sectors and to specific firms to achieve clearly defined objectives or results. In this context it is very important for Užupis and Paupys area to develop its sectoral development strategy. Sectoral development may combine strategies from the above three strategies to provide a comprehensive approach to the development of specific economic sectors of the Užupis and Paupys area such as tourism, entertainment industry, possibly IT, and others.

It is possible that in the future the need for more feeding places - cafes, restaurants, bars -will increase. There should be established more grocery and provision shops. One of the most important project could be establishment of a Market. Because of the specific character of the area, it may be possible to sell art works in the Market. It would be good to discuss possibility to establish business incubator here for the encouragement of local business (first of all specific business according character of the area).

It is important to have an Entertainment Centre here too. It is possible to plan the establishment of such a centre in the former "Skaiteks" factory. After the possible bankrupt of "Skaiteks" factory the other production factory probably will be not established. Užupis is not attractive for larger factories because of there is no enough space for parking places, storing and the accessibility to the area is not comfortable.

Industrial plants “Skaiteks” and “Vilija” with the Bernardines graveyard on the right

Establishment of new hotels would not be purposeful in Užupis/Paupys area because there is a big concentration of other hotels in nearby areas (Narutis, Radisson SAS, Stikliai, Mabre, Shakespeare, City Park, Europa hotels, etc). The need for other accommodation places like guesthouses and bed&breakfast may be increase.

Office development will have no big perspectives in Užupis because of similar problems: high costs of renovation, purchase or rent, accesibility problems (shortage of parking and public transport)

Activities/means:

1. Programs on development of economic sectors of Užupis and Paupys area that are identified as “engines of growth” of the area.

5.1. Neighbourhood consolidation    5.3. Empowerment of initiative groups