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New World Order

The European Union will soon be a bigger cash cow.

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This story appears in the April 2004 issue of Entrepreneur. Subscribe »

In recent months, most American companies have focused on China, now the world's biggest recipient of foreign investment. Those looking elsewhere have considered Southeast Asia and Iraq, where U.S. firms will be rebuilding the country. But these entrepreneurs are overlooking a potentially better market: the 10 nations of central and eastern Europe that will join the European Union (EU) in May.

The new EU 10-Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia-doesn't provide manual labor as cheaply as China, but they do have more educated work forces that are less expensive than in western Europe or the United States; wages in most industries are more than 25 percent less than they would be in a western European country. "There is an extremely high [level of skilled] labor," says Lindsay Lloyd, regional program director for Europe at the International Republican Institute, a think tank in Washington, DC. Joel Ranck, a PR entrepreneur who has worked extensively in eastern Europe, says the Czech Republic's labor force has become so skilled in English that it now competes with Ireland for call-center jobs. What's more, once the EU 10 officially become member states, companies will be able to move goods across their borders and into older EU member states with essentially no customs controls or charges. (The countries will not start using the euro common currency in 2004, however.) Most of the 10 EU nations have also posted strong economic growth rates recently, signs they are solid long-term bets.

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