The long-term priority “Development of entrepreneurship” of the Sustainable Development Strategy of Daugavpils local government and Augšdaugava municipality until 2030 covers the possibilities of the Daugavpils to promote business development and cooperation both between entrepreneurs and the municipality. The development of the tourism environment and wider cooperation in this field play an important role.
Daugavpils' potential in the fields of business and education, multinational society and geographical location, as well as its special role in promoting East-West cooperation is a precondition for the growth of Daugavpils as a multicultural, multiethnic and multifunctional city, cross-border economic development and service center. The significance of Daugavpils goes beyond the borders of the region and the country, giving Daugavpils the role of a crossroads of transit directions of international significance. (Sustainable Development Strategy of Latvia until 2030)
Dimension “Economic growth and accessibility” of the CITY VISION 2030
The territory is the propulsion of the Latgale region, industrial, job, trade, educational and science, health, tourism, sports, cultural and art center. Daugavpils is a driving force for the economic development of the Eastern Baltic, promoting the economic growth of the region together with Augšdaugava municipality, which is an important functional area of the city and a strong rural area.
The area in the future is characterized by an integrated cooperation area with modern industrial, logistics and scientific areas, secure border, competitive economy, developed education, culture and sports life, qualitative living environment both in the city and in the countryside, attractive natural and cultural recreation, business greening and digitalization.
Citizens have unrestricted access to various modes of transport, of which public transport plays an important role. Alternatives for sustainable mobility have been gradually developed - pedestrian traffic, cycling and electromobility, for which appropriate infrastructure is being developed. The area has developed environmentally friendly and integrated mobility, which is easily and quickly accessible at the regional and international level.
Daugavpils is an important business logistics and tourism center in Eastern Europe, with a high level of mobility at the regional, national and transnational levels.
Main advantages of the city of Daugavpils
The most important business directions in the manufacturing industry in the city of Daugavpils are metalworking and mechanical engineering, woodworking and furniture production, textile and clothing production, food and beverage production, production of non-metallic mineral products, chemicals and chemical products, as well as paper, rubber and plastic production. Mostly, the companies of these sectors export their products abroad. The largest commercial companies of the city of Daugavpils export their products to more than 40 countries.
The structure of the manufacturing industry in Daugavpils in 2022, % (by turnover)
(data source: Development Department of Daugavpils City Municipality)
The most important manufacturing industry in Daugavpils is the production of fabricated metal products and mechanical engineering, where the city's largest companies accounted for 40.2% of the total output of Daugavpils' largest manufacturing companies in 2022, which amounted to around EUR 403 million in the year 2022.
Overall, in 2022 the output of the largest manufacturing enterprises in Daugavpils was 17.3% higher than in 2021. This was due to an increase in the production of vehicles, machinery, plant and machinery, chemicals and their products, computers, electronic and optical equipment. In contrast, the production of food products and beverages fell by 1.2%, the production of ready-mixed concrete by 0.5%, the production of rubber, plastic packaging and textiles by 0.4% and the production of other electronic and electric wires and cables by 0.3%.
The development of the manufacturing industry in the year under review was affected by the consequences of the war in Ukraine, resulting in disruptions in the supply chains of raw materials. Companies were also affected by high energy costs, high raw material costs and a slowdown in external demand. Companies linked to the markets of the countries involved in the conflict had to look for new supply options and outlets for their goods.
DAUGAVPILS' ECONOMIC FEATURES
In the last years, new trends have emerged in the field of Information Technology (IT), companies engaged in computer programming, software testing services and development of testing products have started operating in the city. In total, 65 companies are already actively operating in the sphere of computer programming (the number of companies has increased by 44% in five years), 22 – in the provision of other information technology and computer services, 20 – in data processing, maintenance and related activities, 13 – in information services not elsewhere classified.
According to the Lursoft database, 165 companies represent the field of information and communications technologies (ICT) and telecommunications industries (compared to 2021, the number of companies remained at the same level).
Manufacturing companies in the city of Daugavpils successfully operate and develop in a planned manner, expanding and reconstructing manufacturing facilities, introducing modern technologies, expanding the volumes of products sold both in Latvia and abroad.
According to the Lursoft database, 208 new enterprises were registered in Daugavpils in 2022.
Daugavpils industrial zones
There is a large enough number of industrial zones, manufacturing areas and unused buildings in Daugavpils that can be offered to potential investors. For the promotion and development of entrepreneurship there are several industrial zones in Daugavpils, which can be used for the location of new manufacturing companies.
In 2022, projects for the renewal of infrastructure in industrial areas were completed in order to improve the infrastructure in industrial areas in the city and to create new jobs in the future in different industrial areas of the city. Within the framework of the SAM 5.6.2 project "Development of public infrastructure of the Northern industrial zone of Daugavpils city, Phase III", a degraded area of 6.08 ha was revitalized and 9 new jobs were created, attracting private investments of around EUR 165 806. Also, the SAM 5.6.2 project "Promotion of regeneration and improvement of accessibility of the industrial area of the Fortress Warehousing Zone" was completed in the reporting year. Through the implementation of projects under ERDF funding and in accordance with the provisions of SAM 5.6.2 and SAM 3.3.1, which foresaw investments by entrepreneurs in their fixed assets and the creation of new jobs, a total of around 900 new jobs have been and will be created in the period 2016-2023.
Since 2014, the grant program “Impulss” of Daugavpils City Municipality has been implemented to support young entrepreneurs. A total of 270 business ideas have been submitted and 93 companies operating in various manufacturing and service sectors – mainly tourism, healthcare, cleaning, repair and entertainment services, electronics, IT services, etc. – have been supported. The total amount of the grant during this time reached around 505 thousand euros, various new products and services were created in Daugavpils.
Last year Daugavpils City Municipality continued cooperation with Daugavpils Business Incubator of the Investment and Development Agency of Latvia (LIAA), which supports start-ups, newly established entrepreneurs and their development. In 2022 35 pre-incubation support program contracts and 5 incubation support program contracts were signed. The disbursed financial support in grants in the reporting year is 259,3 thousand euros.
The Latgale Special Economic Zone (LSEZ) operates in the territory of the city of Daugavpils with an area of 2500 ha of manufacturing areas where the city's manufacturing companies can apply for support in the form of direct tax relief. There were already 13 (thirteen) companies registered in Daugavpils operating in LSEZ in 2022.