The Work Geography of Timișoara

Co-author of the ‘Economy in Timișoara: Territorial distribution of the economy in the Timișoara Metropolitan Area’ report, Norbert Petrovici discusses how Timișoara’s historical spatial design and economic factors produce its ways of working, commuting, and designing.

In order to understand design’s significance in Timișoara, Bright Cityscapes needed to understand how the city’s economic systems produce its everyday life. Norbert Petrovici was invited to conduct original research that investigates the economy of Timișoara using data-driven and anthropological research. The study aimed to identify the main forces shaping the city's economy, including worker movements, employment trends, turnover, ownership, and the impact of foreign and local investments. This research provided valuable insights into the city's industrial heritage and its current economic sectors.

The resulting report — ‘Economy in Timișoara: Territorial distribution of the economy in the Timișoara Metropolitan Area’ — draws on statistical and archival research to delve into the forces that shape employment, worker movements, and the overall dynamics within the city. It considers how the city’s current economy and identity is impacted by the historical legacies of the interwar economy of 1918-1948, socialist economy of 1950-1989 and the economic restructuring of 1990-2021. Closer analysis into the current economic system within Timișoara particularly focuses on labour migration and commuting, and ownership networks.

With a background in urban studies, economic sociology, and social statistics, Petrovici brings a wealth of expertise to the analysis of Timișoara’s economy. Currently affiliated with the Department of Sociology at Babeş-Bolyai University, he specialises in urban/regional sociology and social theory, focusing on the political economy of the socialist city. He co-authored the report with Vlad Alexe and Vlad Bejinariu of the Interdisciplinary Center for Data Science, which Petrovici heads. In this interview, Petrovici discusses some of the key outtakes of the report.

The ‘Economy in Timișoara’ report plays the crucial role of situating the design research of the Bright Cityscapes project within the complexities of the geography and everyday functioning of the city. How did you go about this significant body of original research?

I collaborated with a team, including an historian and anthropologist. To explore Timișoara’s history, we primarily drew on archival research. While the historian studied the interwar and pre-World War I periods, my focus was on socialism. Further, to gain a comprehensive understanding of the economy, I leveraged my existing research working with statistical data, as well as doing new analyses of official data from the National Institute of Statistics, including microdata, to uncover the local, regional, and global dynamics of the economy. Additionally, we conducted 50 interviews with workers and managers, which are currently being analysed.

Contrary to my expectations, the historical research in particular received significant recognition and garnered interest from a broader audience. This highlights the importance of the historical aspect in shaping Timișoara’s identity, particularly in relation to its economy. The historical context also provides valuable insights into divergent stages of the city’s development, particularly notable were 2002 and 2011, when other Romanian cities outperformed Timișoara by attracting advanced value-added businesses.

The report especially considers the spatial dynamics of the labour market and in relation to the socio-economic characteristics of Timișoara. What were some of your key insights regarding Timișoara’s geography of work?

I examined immigration patterns in Timișoara based on individual census data from 2011. While I lacked specific data on daily commuting, I found that Romanian companies, particularly in manufacturing, rely on labour arbitrage. However, Timișoara and Romania are experiencing a demographic decline that poses challenges to continuing to find cheap labor in order to sustain its export-oriented business model. What is also significant, is that in Romania and Bulgaria, low-wage labourers from rural areas are typically able to supplement their income with agricultural resources. In the case of Timiș County and Timișoara, there are some differences. While cities like Cluj have a similar number of blue-collar workers, most of them are located in greenfield areas outside the city. In Timișoara, most of the manufacturing sector is within the city, which is a distinct characteristic of its development.

This means that in Timișoara, approximately half of the blue-collar workers commute daily from rural areas to work. This commuting pattern is unique compared to other parts of Romania, where rural-to-rural commuting or commuting from second and third-tier cities to rural areas is more common. In Timișoara, the labor force from rural areas commutes to the city for work. In contrast, in the business service sector, which consists of highly educated white-collar workers, they also work in the city but tend to live in nearby green localities. So, you have this interesting suburban dynamic where workers who are not strictly rural live in suburban houses or flats but work in the city in business services.

The report also analyses the impact of socialism on the economy of Timișoara, which is also your personal specialisation. How has socialism in particular affected Timișoara’s economy?

Based on my prior research, my argument is that socialism had two pillars for economic development. Firstly, it focused on investing in local production chains and creating shorter chains. This means that they when a factory was developed or planned in a region, there was also a focus on ensuring that the necessary raw materials were available in that region.  There were also were centrally located factories that aimed to cover the entire national state space, but their primary goal was exporting. Timișoara played a significant role in this context, particularly because during the interwar period, it had a strong foreign economic influence due to its history as part of the Austro-Hungarian Empire before World War I. In the interwar period, Timișoara had the highest number of workers employed by foreign direct investment companies. During socialism, investments were made to connect these companies after nationalisation and create new factories that formed interconnected short production chains. This process began in the 1950s and 1960s when various multinational companies in Timișoara were nationalised. Notably, there was a specific focus on specialisation in textiles, art chemicals (such as painting), and leather industries, which were linked to beekeeping, animal husbandry, and agriculture in Timiș County.

Secondly, with these industries thriving during socialism, from the 1970s onward, the strategy shifted towards adding value to global production chains. The chemical sector became particularly important in the 1970s, coinciding with Romania’s entry into the International Monetary Fund. Timișoara benefited significantly from this sector, as did other regions in Romania. However, I find it especially intriguing because it originated from the textile sector, which received increasing investments to transform into the chemical industry during the 1970s and 1980s. Another sector that received more investments during socialism was non-ferrous metallurgy, which became part of the machinery production chain. Notably, Timișoara was the first city in Romania to have a factory investing in computer production.

During the 1990s, these production chains underwent significant transformations. The successful factories were either returned to their former private owners before socialism, which was the case in Timișoara. Consequently, Timișoara became the first city to attract substantial foreign investments during the 1990s, far surpassing others.

Foreign investments have significantly contributed to shaping the city’s economic landscape over time. What were some key factors that attracted foreign investments to Timișoara?

In addition to the restitution of factories, Timișoara benefited from two other important factors. Firstly, Timișoara, as part of the Habsburg Empire, had strong connections and a diverse ethnic background that left during socialism and returned later, resulting in the presence of influential Italian and especially German communities, along with other parts of Romania.

Secondly, Timișoara, specifically Timiș County, received substantial funding during socialism, leading to significant advancements in agriculture, particularly in terms of technology and large-scale farms. The agricultural sector was highly developed and had strong ties to factories through efficient short production chains for raw materials. In the 1990s and 2000s, Italy specialised in agricultural exports, particularly in the southern region. This presented excellent opportunities due to Timișoara’s high level of mechanisation and vast land resources.

Consequently, the Italian community initially benefited from the local value chains in the agricultural sector and became the most significant investment community in Romania, especially in Timișoara. They were followed by the German expatriate community, who also established organised interests and invested in industry. The German capital primarily focused on the automotive sector, while the Italian investors played a crucial role in industries such as textiles, which were closely linked to agriculture, particularly wool, and the chemical sector.

What role does design play in the Timișoara economy?

One specific aspect of Timișoara and other second-tier cities is that they have managed to negotiate a somewhat better technological upgrade after integrating into the European Union. Timișoara, in particular, has experienced a remarkable boom in engineering. There is a company employing 5,000 white-collar workers, 95% of whom have higher education degrees. However, they are not designers in the traditional sense. There are plenty of jobs available, but the field of design, especially object design, is not well-developed. In many cases, design tasks are performed by engineers within the companies, resulting in a slightly different approach to design. This often involves UI design for web pages or various forms of user experience (UX) design. However, classical object design in Timișoara is not yet fully integrated into global value chains. While it is an appreciated field, it has not reached the same level of development as other aspects of the city’s industry.

One key point is that Timișoara focuses on exporting intermediate products rather than final goods. We don’t make the final products here; instead, we produce capital goods or intermediate products used in the final assembly, which often takes place in countries like Germany or Italy. It is highly unlikely for Timișoara to have the entire design process within its boundaries unless there is a complete transformation of global value chains. In that case, the semi-peripheral regions like Romania could handle the final assembly work while keeping marketing and other aspects elsewhere. Alternatively, Timișoara could participate in the offshoring of business processing. This scenario involves having designers working in offices that serve as call centers, effectively offshore or externalised operations. However, this would mean that either Timișoara can capture highly value-added processes, or it becomes a destination for degraded value-added work shifted from countries like Germany, Austria, Netherlands, or Italy to Eastern Europe.

You’ve mentioned the chemical, farming, and engineering industries is key in shaping Timișoara. Are there any others that have significantly contributed to the economic development of Timișoara and the region?

Certainly, the automotive industry is a key sector for Romania and Timiș County. It is closely linked to Timișoara’s economic growth and will be discussed in detail in an upcoming addition to the report. In the 1990s Romania was able to secure favourable deals with global businesses, particularly in the automotive sector, through privatisation and negotiation efforts that — unlike other sectors — preserved the entire local national production chain. Timișoara was already part of the local production chain, with companies like Elba producing components for car manufacturers like Dacia. Major players like Continental and Bosch have established offices and engineering teams in Timișoara, contributing to its economic growth. The engineering sector, classified as manufacturing, encompasses design, engineering processes, and business processing outsourcing services within companies, ranging from accounting to engineering design.

How has Romania’s membership in the European Union impacted the industries you have studied in Timișoara?

Eastern European countries, including Romania, have become significant manufacturing hubs since joining the European Union. The business service sector has also experienced substantial growth, particularly in cities like Prague, Warsaw, Bucharest, Sofia, and a few second-tier cities such as Brno, Cluj, and Timișoara. Each city has its own specialisation, such as engineering in Timișoara and ITC in Cluj. Since joining the EU 15 years ago, the manufacturing sector has grown to become one-third of Romania’s GDP. What is strange is that the number of employees in manufacturing has not seen a significant increase. This can be attributed to increased productivity and technology. What is also noteworthy is that as the EU has outsourced to Romania, its manufacturing has downsized and pollution has decreased. Meanwhile, Romania is now experiencing a significant increase in pollution due to the outsourced manufacturing. While it has made the European Union greener as a whole, the impact on the local economy and employment is complex and requires further examination.

What do you think are the challenges and opportunities facing the economy of Timișoara in the future?

The report does not specifically look to the future, but based on the findings, I believe Timișoara’s capacity to diversify its economy lies in smart specialisation within its existing sectors. Instead of trying to mimic Cluj, which is seen as a more developed second-tier city focusing on the ICT sector, it would be more beneficial to prioritise the development of the engineering sector. This could involve areas such as automation, robotics, and advanced capital goods for production. Balancing policies to support both the startup sector and attracting foreign direct investment (FDI) is important, but relying solely on labor arbitrage and cheap labor is not a sustainable approach. It would require significant investments in public transportation to facilitate commuting, which can be costly. Instead, Timișoara should focus on attracting foreign companies in the technological field, particularly those specialising in mobile robotics and automation. However, I still need more time for reflection and discussion with others to provide a more concrete recommendation.

Significantly, the report has led to discussions with Vice Mayor of Timișoara Ruben Lațcău and managers, revealing the critical role of collaboration in advanced technological sectors, such as manufacturing, engineering, and design, for the city’s multinational manufacturing sector. However, Timișoara currently lacks the necessary expertise in these areas. To shape Timișoara's future, it is crucial to bridge the gap between the startup sector and foreign direct investment (FDI) by establishing connections between the technological and FDI sectors. While some former managers and owners have invested in the tech sector, there remains a disconnect between technology-driven initiatives and FDI.

In addition to this report, you are also still processing additional research. What will this cover?

There are a number of articles still under development. The first is based on 50 interviews with workers and managers. These are based on the observation that in other areas of Romania rural commuters are able to rely on agricultural resources to supplement their income. However, in Timișoara this is less possible due to the particular urbanisation of the Timiș area. Particularly the systematic arrangement of city blocks and shared yards by the Austro-Hungarians resulted in the aggregation of agricultural land for industrial production, with a strong orientation towards export. As a result, the rural areas of Timiș, although they may appear rural, are highly urbanised and function as neighborhoods of Timișoara.