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top SECTORS

 

IN Latvia

Top Sectors 

ICT & Start-Up & Engineering

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  • Latvia ranks among the top ten countries globally by average measured internet connection speed

  • ICT sector comprises about 4.1 % of the GDP of Latvia, its importance goes well beyond

  • In 2017, there were more than 6 500 companies operating within the ICT sector, where:

    • About 120 of them were producing ICT equipment

    • 550 were operating in the telecommunications industry

    • More than 5 000 companies specialized in other ICT services

  • In 2017, the number of employees in the ICT sector was almost 34 000, providing a turnover exceeding 3.6 billion Euros, with 50% labelled for exports

  • The sector also generates around ¼ of a billion Euro profit, while providing for 7% of total governmental tax revenues

  • With the impressive success of the Latvian ITC industry, a need for additional workforce for the sector was needed; hence, Latvian private industry (ITC and GBS companies) in partnership with universities and the government has started a project to create a centre for quality Computer Science Higher Education in Latvia:

    • The aim is to arrive at additional 3 000 graduates (both undergrads and postgrads) per year from Latvia, the region and the CIS countries to support the local labour pool

    • Providing such solution by initiating strategic partnerships between international and local universities in developing dual education programmes, while exploiting existing high-class infrastructure established in Latvia, developed also via EU funding

    • And the government providing additional support in marginally expanding infrastructure and assisting in marketing of the partnerships

  • The main trade partners of ICT service sector were Sweden, the USA and Ireland

    • Procuring services in traditional ICT subsectors, but also in smart mobility, artificial intelligence and blockchain

  • Business process support functions are a rapidly growing niche industry

    • Key functional coverage includes fields of finance & control, IT and customer service / help-desk, secondary functions include procurement, HR, CRM and market research services

    • There are 24 SSCs and around 30 BPOs operating in Latvia, mostly in Riga

    • Sector employs about 8 700 employees, which translates into 1.3 % of people living in Riga, so new entrants are welcome without significant impact to existing players

    • Sector is highly innovative in Latvia – 55% of companies are getting ready for automation, while remaining have either introduced simple automation (35%) or RPA to AI level (10%) automation

    • Low level of sector saturation – about 1% of working population

  • Latvia and Riga provide excellent start-up infrastructure:

    • Infrastructure – both internet speed (TOP 10 in the world) and flight connections (Riga International Airport servicing close to 50% of all the Baltic flights)

      • Latvian companies are also global pioneers in 5G development

    • Start-up law and other exceptional normative regulations for innovation

      • Including “start-up visas”, 45% employment cost government co-financing and innovation support programmes

    • Latvia and Riga provide excellent living and leisure conditions – cities are smart yet liveable, more than half of Latvia is covered with forests and wilderness, and one of the longest beach coastlines in the region also can be found here

    • Today around 400 start-up companies, mainly operating in fintech, deeptech, drones and SaaS

  • Metalworking, electronics & engineering traditions is one of the main reasons why Latvia has become a prominent deeptech start-up location

  • In Latvia, metalworking accounts on average for 18% to 20% of added-value output

  • Around 1/3 of total Latvian exports is comprised by various engineering products

  • According to Eurostat, Latvia has the highest wage adjusted labour productivity in the Central and Eastern European region in metalworking industry

  • Main activities of the industry are centred around export-oriented contract manufacturing (for automotive and electronics industries) and metal processing

 

Additional information:

Transport and Logistics

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  • The transport sector is one of the strongest industrial sectors in Latvia and largest in services, contributing 9% to 10% of GDP

  • Nearly 90 % of turnover in Latvian ports, more than 80 % of rail cargo, and the major proportion of oil and oil products transported via trunk pipeline systems is transit

  • More than 8 % of Latvia's labour force are engaged in the transport sector and servicing of transit cargo – about 75 000 to 80 000 people

  • Railways link Latvia with Russia, CIS, the neighbouring Baltic States, and through Poland with rest of Europe

  • Currently state-owned operator Latvian Railways functions mostly as a transit trunk-line with as much as 80 % of total freight volumes being transit connected to Latvian ports

    • About 30 % of freight rolling-stock being tanker wagons.

  • At present, the east-west railway corridor has the capacity to transport 50 million tonnes of cargo annually and reconstruction plans to substantially increase this figure have been approved

  • To improve the rail connection between Central and Northern Europe and Germany, the Rail Baltica project has been launched envisioning railway connection between Tallinn and Warsaw (235 km in Latvia)

  • As a gigantic infrastructure project for the region, Rail Baltica will essentially affect the Baltic construction market, with the total estimated cost of the project 5.8 billion Euros in all three countries. Estimated commissioning in 2026

    • Feasibility, planning and consulting was carried out by AECOM (US based, but European operations from the UK)

    • While infrastructure management model is assessed by Atkins (UK), part of SNC-Lavalin group (Canada)

  • Latvia also has three major ice-free ports - Riga, Ventspils and Liepaja, with total handling capacity of 120 million tons per year

    • The three major ports have been accorded favourable incentive schemes to help attract new business (80-100 % relief on direct taxes and significant discounts on indirect taxes (VAT, Excise))

    • Ventspils and Riga Ports are Free Ports whereas the entire city and port of Liepaja comprise a Special Economic Zone

    • Available area of 500+ ha for port infrastructure and logistics development in Riga alone

  • Riga International Airport is the largest international aviation company in the Baltic states and the main air traffic centre in this region

    • The RIGA International Airport renders both aviation (airplane, passenger and cargo attendance) and non-aviation services (lease, parking spaces, VIP centre services, etc.)

    • The construction of the Rail Baltica will provide even further regional advantages, providing efficient and fast connections from regional centres to the central hub of Baltic and Northern European air traffic

    • It attends both national and international airlines becoming one of the few European airports that attends both full service and low costs airlines

    • It serves more than 60 destinations in winter and 90 in summer season

    • In 2018, Riga international Airport serviced slightly more than 7 million passengers (16 % more than 2017) and it is by far the largest airport in the Baltic States, servicing nearly half of all the Baltic passengers

    • Particularly interesting is that Riga – London is the busiest route in the Baltic region, servicing more than 600 000 passengers annually (2018);

    • AirBaltic TOP10 airline in the Europe

 

Additional information:

Meetings, Incentives, Conferencing And Exhibitions Tourism

 

  • Due to several infrastructure, quality of life and productivity unique advantages, the tourism field of “meetings, incentives, conferencing and exhibitions” or MICE in Latvia has grown ever so popular among foreign businesses;

  • Riga and Latvia as a location is well connected, affordable, reliable and safe

    • 100+ direct destinations from Riga International Airport

    • For example, room rates for centrally located Radisson Blu hotels from 20% to 50% lower than other Scandinavian cities (Tallinn, Stockholm, Helsinki and Copenhagen)

    • More than 80 hotels, 13 500 beds and several historical manor and palace venues

  • Similarly, Latvia brings world-class gastronomy, with Riga considered the gastronomic capital of the Baltics

  • Diverse cultural scene and historical heritage, contributing to the development of service industry in Riga region

  • As well as numerous cultural and incentive activities, which is highlighted by both the fact that Riga has been the European capital of culture and success of Latvian culture on international stage

    • I.e. Andris Nelsons multiple Grammy winner and the conductor of the New Year Wiener Philharmoniker concert 2020

 

Additional information:

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